ECONOMY

In Brief

Budget deficit down 26 percent Greece’s ordinary budget deficit fell 26 percent in 2006 compared to a year earlier, the Finance Ministry said yesterday, boding well for the country’s effort to shrink its fiscal gap below the European Union’s limit. The ordinary budget plus the government’s public investment program make up the central government budget, a subset of the general government budget, whose deficit must be brought below an EU ceiling of 3 percent of GDP for Athens to avoid sanctions. The general government budget comprises the central government budget plus defense spending, transfers to the social security system and other public entity surpluses. The ministry said the drop in the ordinary budget shortfall to -8.37 billion came as ordinary budget revenues rose 8.8 percent year-on-year, slightly above the government’s 8.6 percent annual target. It said primary spending rose 5.3 percent last year while total ordinary budget outlays increased 3.1 percent, below a 3.5 government estimate. Debt servicing costs fell 1.9 percent. (Reuters) Morgan Stanley report boosts Postal Savings Bank Shares in Greece’s Postal Savings Bank gained 7.40 percent yesterday, closing at -20.90, after Morgan Stanley initiated coverage with an «overweight» recommendation and a -25.00 price target. Morgan Stanley said Postal Savings Bank offers the most upside potential in its Greek bank coverage. «Postal Savings Bank is adopting an aggressive pricing strategy in Greece. This may be hurting sector profitability overall, but it is allowing (the bank) to transform its -6 billion of idle deposits into retail lending,» the report said. «We forecast 8 percent market share by 2008.» (Reuters) Acquisition Insurer Aspis Pronia’s Cypriot unit agreed to buy a majority stake in Albanian insurer Interalbanian, as part of its plans to expand in the region, it announced yesterday. Aspis Pronia’s MFS Holdings subsidiary signed a deal to buy 51 percent of Interalbanian for -2.2 million, and plans to expand into Kosovo, the Former Yugoslav Republic of Macedonia and Montenegro, it said in a bourse filing. Interalbanian is the sixth-largest general insurer in Albania with a 7.2 percent market share, Aspis said. Aspis and affiliate Commercial Value on Wednesday jointly issued a public cash offer for a controlling stake in Universal Bank, a small Cypriot bank. (Reuters) Inflation Turkey’s inflation for January, announced yesterday, was higher than expected, endangering an ambitious year-end 4 percent target and pushing the lira currency back from eight-month highs. The consumer price index (CPI) rose 1.00 percent month-on-month last month. It stood 9.93 percent higher than a year earlier. The lira, which traded at its eight-month high before the inflation data, dropped back to 1.4050 against the dollar. The yield on the benchmark November 26, 2008, bond rose to 19.55 percent in Monday-dated trade from 19.45 percent. (Reuters)