Surprise primary surplus for 2022

Budget data for last year showed a positive result by some 273 million euros, or 0.1% of GDP

Surprise primary surplus for 2022

The balance of the general government eventually crossed into positive territory from as early as last year, with a primary surplus of 0.1% of gross domestic product or 273 million euros, against a forecast in the 2023 budget for a deficit of 1.6% of GDP or €3.4 billion, according to data published on Friday by ELSTAT and Eurostat, in the context of the European Union’s excessive deficit procedure.

This impressive improvement, compared to the forecast, is the result of statistical adjustments made by Eurostat (revenues from ANFAs and SMPs were calculated in 2022, while the expenditure for the increase of Attica Bank’s share capital was transferred to 2023), but also of the outperformance of revenues, thanks to higher growth (it was 5.9% against a forecast of 5.6%), as well as the under-execution of some expenditures.

In any case, it sends a positive signal to the markets and sets the stage for a solid performance this year as well, as revenue outperformance continues, although Eurostat adjustments and pre-election benefit packages will weigh on this year’s result.

In the stability program that the government will submit on April 30 to the European Commission it will maintain the primary surplus target of 0.7% of GDP roughly constant this year and rise to 2% of GDP in 2024 and beyond.

Greece also had the largest reduction in debt as a percentage of GDP, among EU countries, in 2022 compared to 2021. The debt decreased by 23.3 percentage points and reached 171.3% of GDP, which remains, of course, the highest by far in the EU. According to the recent IMF Fiscal Monitor report, this reduction is the result, almost equally, of both growth and high inflation.

In absolute terms, after all, the debt increased: it was €356.25 billion, against €353.48 billion in 2021. GDP exceeded €200 billion, reaching €208.03 billion, from €181.67 billion in 2021.

There was also a significant reduction in the deficit, including interest: It was held at 2.3% of GDP from 7.1% of GDP in 2021.

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