State Deficit Out Of Control
There is a gap of 4.586 billion Euros in the execution of state budget during January-August period. As result of differences, the budget deficit has raised to 18.1 billion Euros, against 14.8 billion in the corresponding period last year.
Moreover, the Greek Finance Ministry announced:
According to the preliminary data available for the execution of the State Budget for the eight months January – August 2011, on a fiscal basis, the deficit amounts to 18,101 million Euros compared to the new target of 18,974 million Euros set in the 2011 MTFS. During the same period in 2010, the State Budget deficit amounted to 14,813 million Euros.
On State Budget (Ordinary and Public Investment Budget), expenditures are lower than the new target by 762 million Euros while State Budget total revenues (Ordinary and Investment Budget) are increased by 110 million Euros.
In particular, on a eight seven month basis (January – August), net revenues amounted to 30,679 million Euros and they are declining by 5.3% comparing to the respective period of 2010 and restricting the shortfall (6.4%) in the first seven months of 2011. The revenue shortfall can be mainly attributed to the larger than projected recession – during the period when the Budget was being prepared – in the last quarter of 2010, lower receipts from vehicle’s circulation fees by 393 million Euros in January 2011 (because the due date for payment was not extended into January 2011, as in 2010), the reduced receipts from withholding personal income tax in 2011 due to the more favourable tax treatment of personal income as a result of the new tax law and the income reduction, and finally, the increased tax refunds due to the clearing of past years’ obligations.
The revenues from the Public Investment Budget increased by 43.4% or 568 million Euros vis-à-vis the eight months of 2010.
It is noted that the current revenue shortfall is expected to be tackled during the next four months, based on the anticipated performance of the tax regulations included in the implementing Law of the Medium Term Financial Strategy 2011-2015 as well as the recent Government decisions.
Furthermore, It should be noted that the report on the execution of the State Budget provides revenue data for the eight months of 2011 on a cash basis. The total level of revenues for 2011, on a national account basis however, is calculated based on the course of revenues in the first two months of 2012 also, while part of the revenues for the first months of 2011 contribute to the calculation of 2010 revenues on a national accounts basis.
Ordinary budget expenditures increased by 8.1% compared to the same period of 2010. This increase is mainly due to:
the increased interest expenditures by 2,067 million Euros,
the increased grants to Social Security Funds as a result of the reduced receipts from social security contributions by 1,701 million euros,
the increased grant to Employment Agency (OAED) for the payment of unemployment benefits by 322 million Euros and
to hospitals by 853 million euros (649 million euros for the year’s 2011 procurements expenditure and 204 million euros for the settlement of past years obligations from procurement).
In particular, primary expenditures increased by 4.5% or 1.452 million Euros during the same period, mainly due to the increased grants to Social Security Funds (primary to the Agricultural Insurance Organization – OGA by 452 million Euros and to the Wage Earners Fund – IKA by 1,078 million Euros), to OAED by 322 million Euros and to hospitals by 649 million Euros.
Moreover, Public Investment Budget (P.I.B.) expenditures declined by 30.3% or 1,416 million Euros.
It should be noted that the above data correspond to the execution only of the State Budget and thus do not reflect all fiscal data that are taken into account when measuring the General Government deficit according to the ESA95 (Eurostat’s) classification, which is the benchmark for the assessment of the Economic Policy Programme of Greece.
(capital.gr)
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