ECONOMY

Greek 2011 deficit seen at 8.9 pct

The European Commission?s forecast for this year?s Greek deficit is expected to come to 8.9 percent of gross domestic product when it publishes its report on the European economy on Thursday, according to Finance Ministry sources.

This figure will then be included in the draft budget to be tabled in Parliament on Monday or Tuesday next week. It appears that the budget will not include any new measures besides those already approved last month.

The deficit target that the preliminary budget, drafted in early October, contained was 8.5 percent of GDP, but even then it was certain to be revised. Sources say the troika had expected the deficit to run up to 9 or 9.1 percent of GDP and that the October measures were based on that estimate.

With the deficit at 8.9 percent, there should be no new measures required to ensure the reduction of the budget deficit to 6.8 percent of GDP in 2012.

?The deficit is close to 9 percent, but no new measures will be needed,? a Finance Ministry source said. Notably, the original target for this year?s deficit had been 7.6 percent.

There are still some people who brand the 8.9 percent estimate as ?too optimistic,? given the disappointing level of state revenues, and expect the deficit to end the year at between 9 and 9.5 percent instead. The state does not expect to cash in more than 8-9 billion euros in the last couple of months of the year, instead of the 12.4 billion required to meet its original target for 2011.

In any case, the picture only will become clear when the preliminary deficit figures are issued in April by the Hellenic Statistical Authority (ELSTAT) and Eurostat.

However, some good news is provided by export figures for September, which returned to impressive levels after a brief intermission in August. ELSTAT announced that exports posted an annual increase of 30.7 percent, but this is partly due to the comparison with September 2010, when exports were hampered by industrial action on the part of truck owners. Exports to non-European Union countries posted a spectacular 55.6 percent rise, against 20.9 percent growth in exports within the EU.