ECONOMY

Disastrous April eliminates surplus

The primary result of the general government accounts swung from a surplus to a deficit within just one month in April, while the state?s outstanding debts remained at 6.2 billion euros, according to official data released on Tuesday by the Finance Ministry.

The budget surplus of 2.3 billion euros secured in the first three months of the year evaporated in April, at the end of which there was also a deficit of 18 million euros.

This is attributed to two main factors: The deterioration of the state budget, with public spending growing faster than tax revenues, while the surplus of social security funds and hospitals has decreased.

The primary deficit of the state budget soared from 333 million at the end of March to 1.7 billion euros at end-April. Public expenditure (not including interest) grew by 4.7 billion euros, while tax revenues expanded by 3.3 billion euros.

At the same time the primary surplus of social security funds declined by 633 million euros, dropping from 930 million in the first quarter to 297 million on May 1. State corporations had a primary surplus of 274 million euros at the end of March that dropped to 67 million euros at end-April. Local authorities also saw their primary surplus contract in April from 377 million euros to 289 million.

Nevertheless, officials at the Finance Ministry are expressing optimism as far as the course of the state budget is concerned, saying that although revenues have lagged expectations, the ministry has gone ahead with an extra reduction in expenditure in a bid to rein in the deficit. The government?s cash deficit (including interest) amounted to 7.6 billion euros in the year?s first four months.

The state?s outstanding debts to third parties — suppliers, construction companies etc — rose marginally from 6.23 billion euros to 6.27 billion. The biggest portion of state debt was to social security funds, at over 2.8 billion euros in the January-April period, followed by hospital debts (1.58 billion euros). Worse, the debt problem is expected to deteriorate, given that the bailout installment that was originally due this month has now been postponed.