Primary surplus misses its target as revenues decline

Finance Ministry concerned over 1.2-billion-euro hole in takings

Budget revenues in the first 10 months of the year posted a 1.2-billion-euro shortfall, while debts to the state rose by 119 million euros in September, causing major concern at the Finance Ministry.

These developments have led the country’s creditors to express doubts regarding the fiscal targets for 2015, and even some concerns for this year’s targets.

However the ministry still expects the primary surplus target of 1.5 percent of gross domestic product to be met by the end of the year, with Alternate Minister Christos Staikouras arguing that the figures to date point to a primary surplus that will be even greater.

According to data presented by Staikouras yesterday, the primary budget surplus in the first 10 months of the year came to 2.4 billion euros, missing its target by just 44 million euros.

He attributed the 1.2-billion-euro hole in the state budget revenues to tax rebates being 270 million euros higher than planned; to the collection of just two instead of four installments of the single property tax (ENFIA), which missed its target by 885 million euros and will be collected later in the year after 1.2 billion euros was cashed in by end-October; and to taxpayers with ex- pired debts waiting for the new favorable framework for their settlement to be announced before making their move.

Spending cuts came to the rescue once again, as primary spending was contained by 1.5 billion euros in the year to end-October, with total budget expenditure being 2.1 billion euros lower than planned.

The surplus in the social security funds’ revenue-spending balance is gradually evaporating, although expenditure on pensions has been reduced by 2.2 percent. With state funding reduced by 29.1 percent from last year, revenues from social security contributions have also shrunk by 1.7 percent, or 241 million euros.