Health crisis pokes €6.4 bln hole in budget

Health crisis pokes €6.4 bln hole in budget

The health crisis has widened the hole in the Greek budget to 6.4 billion euros in the six-month period stretching from January to June, according to data published on Monday by the General Accounting Office of the State, which showed a primary deficit of €6.1 billion.

Under normal circumstances, the budget should have recorded a primary surplus of €313 million as foreseen in initial projections.

The figures showed that revenue losses (mainly from value-added tax and excise taxes) of €3.9 billion and inflated pandemic-related spending derailed the budget.

According to the data, the lockdown due to the coronavirus pandemic had a devastating impact, sinking receipts from VAT and excise taxes to the tune of around €1.7 billion – a course of affairs that is expected to continue in the coming months.

Referring to the plummeting revenues, an official of the Finance Ministry staff pointed out that they will be significantly affected at least through September due to the situation in the struggling tourism sectors, a mainstay of the Greek economy.

He said that July will be an extremely difficult month in terms of revenues, as expectations for growth are not confirmed by bookings.

The data from the State General Accounting Office showed that the amount of net revenues of the state budget amounted to €18.996 billion, showing a decrease of €3.903 billion, or 17% compared to the target set in the 2020 budget report – again mainly due to the reduction of economic activity due to the health crisis, as well as the impact of measures taken to deal with it.

Revenues from taxes amounted to €18.262 billion, down €2.794 billion against targets.  

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