Goals in 09 budget look shaky

The government may soon be lowering the ambitious goals set out in its 2009 budget draft plan, as the global financial and credit crisis deepens, harming revenue collection efforts. Just one week ago, National Economy and Finance Minister Giorgos Alogoskoufis unveiled Greece’s budget plans, which were based on targeted economic growth of 3 percent, down from 3.4 percent this year. The Bank of Greece, the country’s central bank, said it also sees the economy expanding at about the same pace. However, some more conservative economists see the figure as being closer to the 2 percent mark. «There is no reason to change the budget goals at this time,» Alogoskoufis said while in Washington over the weekend, but the attainment of revenues is looking increasingly difficult against the backdrop of worsening economic conditions. The 2009 budget, which plans to lower the deficit to 1.8 percent of gross domestic product from 2.3 percent this year, is aiming to raise 61.5 billion euros in revenues, an increase of some 13 percent over this year. Turmoil on international markets, rising interest rates and high inflation are hurting consumers and investors, along with their ability to pay taxes. Figures show that out of the additional 7.39 billion euros targeted for 2009, 4.13 billion will come from direct taxes and 3.26 billion from indirect taxes. The budget was submitted to Parliament last week and is expected to be approved by the end of the year. A possible revision could take place by November 20, when the draft bill is set to be finalized.

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