Primary surplus target edges closer after September figures

The government is increasingly optimistic that it will meet its target for a primary surplus of 344 million euros by the end of the year, as the data for the budget’s execution in the first nine months show a primary surplus of 1.1 billion euros. This is attributed to a reduction in expenditure rather than an increase in tax revenues, which missed the target by 455 million euros.

The data that the Finance Ministry presented on Tuesday showed a primary surplus of 2.657 billion euros at the end of September. However, this figure includes 1.5 billion euros in revenues from the profits the European Central Bank made on Greek bonds and returned to Athens.

This means that the primary surplus that Greece’s creditors will take into account after the year’s first three quarters amounts to just over 1.1 billion. That was against a budget target for a primary deficit of 8.732 billion euros.

The shortfall in revenues shrank from 727 million euros in the year to end-August to 455 million at end-September.

Direct taxes were 170 million euros off target, income taxpayers’ tax revenues fell short by 111 million euros and corporation income tax revenues posted a 208-million-euro shortfall.

In contrast, property tax revenues came in 55 million euros above target. Indirect taxes lagged by 285 million euros.

The improvement in September revenues is mostly due to the payment of direct taxes, which amounted to 2.31 billion euros – i.e. 454 million euros more than the monthly target. Income tax revenues from taxpayers beat the September target by 351 million to reach 1.12 billion euros.

Direct taxes from previous years beat their target by 96 million euros to reach 248 million euros. The other direct taxes collected last month amounted to 392 million euros – i.e. 48 million euros more than planned for September.

The expenditure side of the budget amounted to 38.62 billion euros in the first three quarters of 2013, which is 2 billion euros below target, mainly thanks to the reduction in primary spending by 1.62 billion euros compared with the budget target.

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