ECONOMY

Jan-March deficit widens but in line with target

Greece’s central government deficit widened 7.8 percent in the first three months of the year to 4.71 billion euros as revenues continued to lag, but within the first quarter target set out in the 2011 budget, according to the Finance Ministry.

The data refers to the state budget deficit which excludes local authorities and social security spending and do not coincide with the general government shortfall — the benchmark for the EU’s assessment of Greece’s fiscal progress.

The ministry said the main reason the deficit target was attained in the first quarter was the containment of spending as budget revenue was 776 million euros below target.

Net ordinary budget revenue fell 8.1 percent year-on-year to 11.14 billion euros, mainly due to a deeper-than-projected recession.

The ministry attributed the revenue shortfall to lower proceeds from an extraordinary tax on profits of large companies and reduced receipts from personal income tax withholdings.

Last week euro zone finance ministers warned Greece of the importance of controlling spending as the overborrowed country’s budget deficit likely exceeded 10 percent, topping an earlier 9.4 percent of GDP forecast.