BUSINESS

Primary budget surplus target was missed in 2018

PROKOPIS HATZINIKOLAOU

TAGS: Finance

The official data on the execution of the 2018 budget show a higher deficit and a lower primary surplus compared to the targets the government had set.

This is cause for concern over the course of this year’s budget, given the fatigue recorded in the payment of taxes last year, which is expected to continue this year: With a general election looming large, the tendency will be for taxpayers to take a wait-and-see stance while entrepreneurs hold off on their business plans and the state mechanisms carry out fewer inspections.

The 2018 budget shortfalls are certain to grab the attention of the country’s creditors, whose representatives are arriving in Athens next Monday for the second post-program inspection, with plenty of issues still open.

According to the data released on Monday by the State General Accounting Office, the 2018 primary budget surplus amounted to 3.16 billion euros, against a target for 3.6 billion euros; there is also a deficit in the budget balance amounting to 2.392 billion euros, against the target of 1.911 billion.

The containment of public expenditure was not enough to reverse last year’s negative picture. At the same time, one can see that a significant share of the handouts to citizens has been funded by the reduction of the Public Investment Program’s spending by 513 million euros; tax rebates missed their target by some 963 million for the same purposes.

Finance Ministry officials argue that the shortfalls recorded are to a great extent due to the fact that the amount of 1.115 billion euros concerning the extension of the lease contract for Athens International Airport has not yet been received: The fee that concerns the period from 2026 to 2046 will be collected this month instead of December 2018, as last year’s budget had provided for. This will have no fiscal impact on the current year as it concerns revenues for future years.

Data also showed that the net revenues of the 2018 budget lagged their target by 1.56 billion euros, and tax rebates amounted to 3.68 billion euros, compared to a targeted 4.64 billion.

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