Growth to fuel rise in rev­enues

Bud­get pro­vides for 2.9 pct GDP ex­pan­sion and 3 pct pri­mary sur­plus de­spite so­cial se­cu­rity co­nun­drum

Kathimerini English - - Front Page - BY PROKOPIS HATZINIKOLAOU & SOTIRIS NIKAS

Fi­nance Min­is­ter Gikas Har­dou­velis yes­ter­day tabled in Par­lia­ment the fi­nal draft of the 2015 bud­get which is in line with the tar­gets of the coun­try’s bailout agree­ment with its cred­i­tors and will be put to a vote on De­cem­ber 7, one day be­fore the cru­cial Eurogroup meet­ing.

De­spite the dif­fer­ing views of the troika, com­pris­ing the in­spec­tors of the Euro­pean Cen­tral Bank, the Euro­pean Com­mis­sion and the In­ter­na­tional Mon­e­tary Fund, the gov­ern­ment has stuck to its po­si­tion and is ex­pect­ing a pri­mary sur­plus of 3 per­cent of gross do­mes­tic prod­uct for next year, lead­ing to a fully bal­anced bud­get for the first time in the coun­try’s post­war his­tory. How­ever the big­gest ob­sta­cle in the bud­get’s ex­e­cu­tion is the so­cial se­cu­rity sys­tem hole, es­ti­mat- ed at 1.2 bil­lion euros.

The main fac­tor in at­tain­ing the pri­mary sur­plus tar­get will be a 1.4bil­lion-euro in­crease in tax rev­enues through the sig­nif­i­cant im­prove­ment ex­pected in eco­nomic ac­tiv­ity. The Fi­nance Min­istry ar­gues that the econ­omy will ex­pand by 2.9 per­cent next year, while Al­ter­nate Min­is­ter Chris­tos Staik­ouras re­it­er­ated yes­ter­day that the tar­get for 0.6 per­cent growth, “if not con­ser­va­tive, is at least re­alis- tic.” He went on to stress that in or­der for that not to hap­pen, the cur­rent quar­ter would have to post a 0.8 per­cent con­trac­tion, which ap­pears highly un­likely, while min­istry of­fi­cials say that that way, the tar­get for 2015 is also very much at­tain­able.

Bud­get pro­vi­sions in­clude: un­em­ploy­ment drop­ping to 22.6 per­cent, from 24.8 per­cent this year and 254.5 per­cent in 2013; in­fla­tion re­vert­ing to pos­i­tive ter­ri­tory (0.3 per­cent) from a neg­a­tive 1 per­cent this year; pri­vate con­sump­tion grow­ing 1.6 per­cent from just 0.2 per­cent this year and a 2 per­cent con­trac­tion in 2013; pri­mary ex­pen­di­ture ex­pand­ing by 456 mil­lion euros; and the na­tional debt fall­ing to 316.9 bil­lion euros, or 171 per­cent of GDP, from 174 per­cent this year.

The min­istry also ex­pects to is­sue seven- and 10-year bonds next year.

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