Budget revenues shrink

Budget revenues showed a worrying decline in May, forcing the Economy and Finance Ministry to begin consultations with the monitoring mechanisms so that checks intensify from now until the end of the year. Last month revenues came to -4,523 million, against -4,848 million in May 2006, which is a decline of -325 million or 6.7 percent. Although the ministry suggests the decline is coincidental due to the abolition of the tax discount of 1.5 percent with payment of income tax in a lump sum, revenues from value-added tax also show signs of fatigue, as do revenues from dividends that the state receives. The statement by the ministry explained that revenues from income tax declined by -681 million last month as many people will pay all their taxes later in the year now that the discount has been waived. In the January-May period, budget revenues grew by 3.1 percent, against a target of 5.5 percent for the year’s first five months. On the inflation front, which in May closed at 2.6 percent, Development Minister Dimitris Sioufas and Deputy Minister Yiannis Papathanassiou stressed yesterday that only once in the last 35 years has Greece enjoyed a lower rate than that in May. They added that this development is also confirmed by the monthly survey by the Institute for Economic and Industrial Research (IOBE) which showed consumers’ expectations for their households’ finances are significantly higher than those a year earlier. Also yesterday the National Statistics Service (NSS) announced that the general index of industrial output in April this year posted a 0.2 percent rise from the same month in 2006, mainly thanks to a rise in the mining, energy and water production indices. In the first four months of the year, the mean index of industrial output posted a 2.2 percent year-on-year increase.

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