Budget deficit contained, while exports are growing

Fiscal and external trade figures produced some encouraging signs on Monday, with the budget deficit contained in November and Greek exports increasing considerably in October, while inflation might have been negative had it not been for the tax hike on heating oil.

After several revisions, it now appears that the 2012 budget will not only be within target, but its cash deficit will likely be smaller than forecast. According to data for the first 11 months of the year released yesterday by the Finance Ministry, the state budget deficit amounted to 12.9 billion euros while the primary deficit came to 1.48 billion, considerably lower than the 11-month targets of 15 billion euros and 3.59 billion respectively.

After a long time, even the revenues have almost made the target, as they amounted to 45.79 billion against a target for the period of 45.82 billion euros. Public expenditure in the year to November came to 58.7 billion, which was 2.15 billion euros less than the target set by the budget.

“The course of the execution of the budget in the first 11 months of the year is considered satisfactory and much better than forecast, illustrating that the government is steadily heading, step by step, toward reaching the fiscal targets,” Alternate Finance Minister Christos Staikouras commented on Monday.

He added that this is pointing toward a primary surplus for the 2013 budget.

Meanwhile Hellenic Statistical Authority (ELSTAT) data showed on Monday that exports in October (not including oil products) climbed 13.8 percent year-on-year to 1.53 billion euros, from 1.34 billion in October 2011. Even more encouraging is the 10.9 percent increase in exports to fellow European Union countries, as they absorb the bulk (60.6 percent) of Greek exports, while third countries reported an 18.5 percent rise in Greek product absorption.

Consequently exports are heading for a annual increase of 6.8 percent for the whole year, above earlier estimates by the Panhellenic Exporters Association for growth of 4 to 6 percent.

There was also an increase in imports in October despite the massive decline in consumption. ELSTAT data put their annual rise at 10.1 percent to 2.73 billion euros, from 2.48 billion in October 2011.

ELSTAT also announced November inflation data on Monday that saw the consumer price index climb 1 percent, against 1.6 percent in October. The index was heavily affected by the 39.4 percent rise in the price of heating oil due to the hike in the special consumption tax applied.

There was also a notable increase of 12.3 percent in the price of potatoes. The prices of fresh vegetables and cereals declined by 11.9 percent and 1 percent.

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