–Adds Detail On Government Revenues and Expenditures
ATHENS (MNI) – Greece’s government deficit shrank 32.3% in the
first eight months of this year compared to the January-August period of
2009, the Greek Finance Ministry announced Monday.
The ministry said this magnitude of deficit reduction outpaced the
target in its fiscal austerity plan, which calls for a 26.5% reduction
in red ink over the first eight months of the year. For all of 2010, the
government is seeking to reduce the deficit by 39.5% compared with 2009.
In euro terms, the January-August deficit was E14.49 billion, down
from E21.38 billion in the same period last year.
The ministry said that while the government was ahead of schedule
in expenditure reduction, it was lagging in revenue collection. Net
revenues in the ordinary budget were up 3.4% over the first eight months
of this year, well below the targeted increase of 13.7%. The ministry
noted that the revenue result for the first eight months only partially
captures an increase in the VAT rate by two percentage points, which
took effect July 1.
Ordinary expenditures dropped 7.6% in the January-August period,
somewhat ahead of the government’s targeted decrease of 5.5%. Primary
expenditures plunged 12.1%, far outpacing the target of -5.8%. This was
due mainly to cuts in health and social security spending as well as
lower spending on salaries and pensions in the public sector.
On the other hand, the government’s interest payments increase
6.6%, more than the 5.6% it was hoping for. Spending on public
investment declined 32.8% in the period, the ministry said.
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