Primary surplus overrun born out of stifling state investment

Primary surplus overrun born out of stifling state investment

The state budget recorded a primary surplus overrun of 2.33 billion euros in the first four months of the year, against a target of just 374 million euros, State General Accounting Office figures showed on Monday. This was achieved with the incomplete execution of the Public Investments Program (PIP) and above-target budget revenues.

The figures were published just days before negotiations begin with the creditors’ representatives, and suggest – for now at least – that the target set for the primary surplus to come to 3.5 percent of gross domestic product this year will be achieved. For that reason, the implementation of the tax discount reduction from January 2019, a year earlier than planned, is likely to be avoided.

The provisional data showed that net state budget revenues amounted to 15.515 billion euros, beating their target by 1.2 billion euros, or 8.4 percent. This is attributed to the increased takings from value-added tax, as self-employed professionals paid their VAT for the year’s first quarter in April.

Rebates amounted to 1.2 billion euros, 210 million above target, while PIP revenues reached 1.09 billion, beating their target by 516 million euros.

On the expenditure side, there was a 751-million-euro shortfall in project execution: Budget spending in the January-April period came to 15.322 billion euros, against a target for 16.073 billion. The shortfall mainly derived from the 294-million-euro drop in health sector spending while PIP investments came to just 504 million, missing their target by a considerable 556 million euros.

In April alone, net revenues reached 3.357 billion, 269 million euros above target, while expenditure amounted to 3.618 billion, missing the target by 416 million euros. PIP spending in particular was 224 million below target.

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