ECONOMY

Finance Ministry expects higher budget deficit

finance-ministry-expects-higher-budget-deficit

Greek Ministry of Finance officials are now certain that, with much of economic activity suspended, the 2021 budget deficit will be greater than originally expected.

“Our deficit will be higher,” a top ministry official told Kathimerini, adding that European Union authorities had been briefed.

The 2021 budget estimated primary deficit for the year – excluding payments on Greece’s debt – at 3.9% of the country’s GDP, down from 7.2% in 2020.

The ministry officials estimate that each month under lockdown burdens public finances to the tune of €3-€3.5 billion. Half of this is foregone tax revenue and the other half is increased spending on relief of individuals and businesses hit by the pandemic.

The government had already planned for partly shut retail trade with restaurants and cafés fully shut during the first quarter. It’s greatest concern right now is tourism prospects.