ECONOMY

Olympics send public debt on a steep rise

Greek public debt is on a steep rise, according to the latest figures of the General Accounting Office released yesterday. The total central government debt rose 9.8 percent in the second quarter of 2004 to 195.73 billion euros, compared with 178.18 billion during the same period in 2003, mainly due to higher borrowing requirements needed to finance the staging of the Olympic Games. The debt of the central government amounted to 177.81 billion euros at the beginning of 2004 and its rapid increase during the first half of the year is expected to lead to an increase in general government debt, which includes the surpluses of pension funds and publicly controlled institutions. According to the Finance Ministry, general government debt will rise to 105 percent of the country’s gross domestic product (GDP) by the end of the year, compared to 103 percent of GDP a year earlier. The projections are based upon the revised figures according to the review of public finances undertaken by the new government elected in March. The projections of the general government deficit are grimmer. According to recent estimates by the National Statistics Service, revisions concerning defense spending add 0.8 percent of GDP to the projected public deficit for 2003 and for 2004. The government said recently public debt may rise to as much as 4 percent of GDP this year.