The government will table the first draft of the 2018 budget on Monday, projecting that gross domestic product will grow 2.4 percent and the 2017 primary surplus will beat its target by 0.3 percent of GDP, reaching 2.2 percent against 1.9 percent. It will also set the 2018 primary surplus target at 3.53 percent of GDP.
Although it has not been discussed in detail with the country’s creditors (this is expected to take place in the context of the third bailout review by November 21), the draft budget contains a number of discrepancies on various points compared with the midterm fiscal plan that cleared Parliament just five months ago.
The first concession the new budget makes is that the target to collect 21.5 billion euros through direct taxes in 2017 will not be met, which should also bring down the target for next year. Without even waiting for the data from tax payments in September, the State General Accounting Office acknowledges that the upward revision of direct tax revenues by 1 billion euros for this year was wrong.
The draft will also admit that the forecast for tax rebates of 3.324 billion euros in 2017 was too conservative, and will be revised both for this year and next. The new estimate for 2017 will be near 4 billion. The budget will also record that the primary result of social security entities was better than forecast.