BUSINESS

Revenue exceeds government target in first seven months

EIRINI CHRYSOLORA

TAGS: Economy

Revenues for the first seven months of the year have exceeded targets, and there is an excess surplus, making the government optimistic that it will reach the primary surplus budget target of 3.5 percent of gross domestic product.

This, in turn, will help the government in its difficult negotiations with the country’s creditors over the 2020 budget, aimed at convincing them to approve tax cut plans, as well as in terms of Greece’s request that the surplus target be lowered starting in 2021.

Net budget revenues in January-July 2019 came to 28.605 billion euros, or 8.1 percent higher than the set target of 26.455 billion. Also, tax revenues were 26.248 billion, 2.1 percent higher than the 25.715-billion target.

July net budget revenues exceeded the target by 209 million euros, reversing June’s performance, when the target was not met.

According to Finance Ministry sources, revenues are going well this month too, exceeding the target by 100 million over the first 10 days of August.

Also, higher revenues were largely due to the 1.119 billion euros representing the amount (minus value-added tax) the Athens Airport shareholders paid to the state for extending the lease.

This amount was supposed to be paid in 2018 and, therefore, will not count toward this year’s primary surplus.

Another unexpected source was the 644 million euros distributed to the Bank of Greece by the European Central Bank in May through the Agreement on Net Financial Assets.

This also does not count toward the primary surplus, although this is being negotiated.

A lid was also kept on spending, which rose to 30.456 billion in the first seven months of the year, compared to a target of 31.083 billion.

Still, spending was about 1.4 billion higher than during the same period in 2018, and would have been even higher had the Public Investment Program not been underfunded and if the government hadn’t postponed payments of 277 million for weapons systems.

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