ECONOMY

Debt grows to 160.5 pct of GDP

Greece’s debt soared to 160.5 percent of gross domestic product at the end of the year’s first quarter, according to Eurostat figures released on Monday in Brussels, while Athens is trying to plug a 1.6-billion-euro hole in budget revenues.

The Greek state debt grew by 3.7 percent from the last quarter of 2012 to reach 305.3 billion euros. It increased by 24.1 percent from the same period last year, which was the biggest rise in the European Union, data showed. That was despite the privately held bond buyback and the ensuing debt write-off last November.

In the meantime, the Finance Ministry is planning to increase checks across the economy and to fully activate the public revenue collection mechanism in order to cover the revenue shortfall. The ministry’s aim is to have the hole plugged by September so that when the inspectors from the country’s creditors arrive, talks can be held on a different basis.

The provisional data for the execution of the budget in the first half of the year show a primary deficit of just 1.5 billion euros against a target of 3.87 billion. Net revenues amounted to 20.8 billion euros, which was 901 million or 4.2 percent below target. Revenues before tax rebates were down by 1.6 billion euros.

State budget spending came to just 27.59 billion euros, some 2 billion less than expected, owing to the reduction of primary expenditure by 1.91 billion euros.

Another problem is the 550-million-euro shortfall in revenues anticipated from the new single property tax to apply from next year. In cooperation with Finance Ministry tax consultant Nikos Karavitis, technical experts from the International Monetary Fund are working to try to cover the lag in receipts from the property tax, as Greece’s creditors do not expect the collection of any more than 67.5 percent of the 3.2 billion euros tax owners will be asked to pay next year. The ministry expects the collection of 2.7 billion euros, but the creditors do not anticipate any more than 2.15 billion.