Major shortfall in January budget takings

Major shortfall in January budget takings

The extension of the coronavirus restrictions cost the budget an additional deficit of more than 500 million euros last month, compared to what had been projected two months earlier. This deterioration is expected to continue this month, given the strict lockdown in the capital and other regions.

The provisional budget data in January showed a deficit of €1.561 billion against a target for €1.091 billion. The primary deficit came to €1.473 billion, compared to a target for €1.031 billion.

The decline is largely attributed to the drop in state revenues. The net budget revenues amounted to €3.848 billion, €812 million or 17.4% below the budget estimate. Tax takings were actually 7.4% or €295 million below the target.

That is why Alternate Finance Minister Thodoros Skylakakis commented that “the reduction is due to the effects of the lockdown, which has lasted longer than expected when the budget was drafted; however, it reflects the maintenance of a satisfactory level of payment culture by taxpayers, which constitutes a positive springboard for public finances when the economy begins to rebound.”

The takings of the public investments program were €615 million less than projected. In contrast, the program’s spending beat its target by €597 million, as it was decided that a part of the cheap state loans project known as Deposit To Be Returned – would be covered by the investments program funds.

In January the state disbursed support funds of €1.3 billion. Finance Ministry data show that the bulk of that – i.e. €907 million – concerns the Deposit To Be Returned, another €386 million went toward the special-purpose compensation for workers, and €19 million to landlords forced to take losses on their rent revenues.

For the time being the ministry is proceeding on the assumption the pandemic will not last any longer than anticipated – i.e. that the worst will be over by end-March or mid-April: There will be restrictions up to April and then the picture will become clearer,” a ministry source told Kathimerini, not ruling out any more support measures in May either. Still, the extent of the restrictions and support measures is already greater than originally thought.

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