BUSINESS

Budget shows primary surplus for 2012

In the first 11 months of last year, general government revenues outpaced expenditure by 2.3 bln euros By Sotiris Nikas

The general government budget showed a primary surplus of 2.3 billion euros in the first 11 months of 2012, the General State Accounting Office announced on Wednesday, compared with a primary deficit of 3.6 billion euros in the same period in 2011, a very positive sign for the fiscal state of Greece. Nevertheless state debts to the private sector soared to 9.3 billion euros, from 6.7 billion in the first 11 months of 2011.

Referring to the course of the budget, Finance Minister Yannis Stournaras stated on Wednesday that “we are within the targets,” as in December “the target for a deficit of 1.5 percent of gross domestic product will be achieved and we may actually fare even better than that, but I will remain a little reserved until we get to see the actual figures.”

There was only a small primary deficit of 353 million euros in the state budget (strictly concerning central government revenues and spending) in the same period.

The achievement of a primary surplus in the year to November is attributed to the major containment of general government spending. In the January-November period expenditure amounted to 89.9 billion euros, down from 100.7 billion in the same period in 2011. Revenues meanwhile grew from 92.3 billion to 97 billion within a year.

“These positive developments regarding the execution of the budget illustrate that the effort for fiscal sanitization, adjustment and discipline is bearing fruit,” Alternate Finance Minister Christos Staikouras said in a statement.

He added that conditions are in place “for the gradual restarting of the economy so that the country can leap out of the deficit cycle into one of sustainable development on solid ground.”

Still, the positive course of the budget has clearly been achieved at the expense of third parties as the state has seen its debts to the private sector grow by 2.6 billion euros within a year. The biggest share of that (4.4 billion euros) concerns debts of the social security funds.

“With the [bailout] tranche we have received we will be able to repay these debts in the first half of 2013, provided of course that the ministries submit specific data,” said Stournaras.

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