Battered Greece saw its budget deficit fall to 9.1 percent of gross output last year as severe austerity required to secure international aid bit into spending.

Athens managed a 1.2 percentage point fiscal improvement compared with 2010 but its primary budget balance -- which excludes debt servicing costs -- has yet to move into surplus as a deep economic slump continues.

Greece's economy is in its fifth year of recession and could contract by more than 4.8 percent this year. Unemployment is also a record high, hitting tax receipts and requiring more spending on jobless benefits.

"According to provisional data, the deficit of the general government, as measured under the excessive deficit procedure (EDP) is estimated at 19.6 billion euros or 9.1 percent of GDP,» the statistics agency ELSTAT said on Monday.

Fiscal austerity measures including income and property tax increases, a rise in value-added tax rates and cuts in wages and pensions, has helped Athens shrink the budget gap from 15.6 percent of GDP in 2009.

Greece, which is set for a national election on May 6, aims for a budget gap of 6.7 percent this year and a primary deficit of 0.

After two years of austerity to tackle its debt crisis, the country is suffering major economic upheaval. Unemployment is at a record 21.8 percent with joblessness among youth at a rate where more are out of work than in.

It is not about to get any easier.

Whoever wins the election will have to agree additional spending cuts of 5.5 percent of GDP or about 11 billion euros ($14.5 billion) for 2013-2014 and gather about another 3 billion euros from better tax collection to keep getting aid, the IMF has said.

The European Union and International Monetary Fund have place strict conditions on Greece receiving bailout money to help it settle its massive debt requirements.

ELSTAT said gross public debt rose to 165.3 percent of GDP last year from 145 percent in 2010. [Reuters]