ECONOMY

Budget deficit well off target

Greece’s budget deficit for 2008 is expected to come in three times higher than the original target set by the government, according to data sent to Eurostat by the Economy and Finance Ministry. The ministry, along with the National Statistics Service, sent figures to Brussels on March 31 showing that the deficit last year hit 4.8 percent of gross domestic product, about 11.3 billion euros. The initial target set for the 2008 budget by the government was a forecast deficit of 1.6 percent of GDP, or 3.8 billion euros, but has since been gradually revised higher. Last week, Economy and Finance Minister Yiannis Papathanassiou admitted the deficit may have exceeded the government’s 3.7 percent of GDP estimate, but he did not give any further information. The council of eurozone finance ministers,known as the Eurogroup, has issued a clear recommendation to Greece, Ireland, Spain and France that they should take immediate measures to contain their deficits. Ministry officials also said Eurostat is continuing to seek clarification of Greece’s figures, which means its final decision may result in an even higher budget deficit figure. The dispute has to do with the accounting treatment of European Union-related inflows and funds in the country’s social security system, according to ministry sources. Eurostat is scheduled to make public its announcements on Greece’s budget data on April 23. Tax revenues are dropping as the economy slows under the weight of the global crisis. The European Commission expects the Greek economy to expand by just 0.2 percent this year but is likely to revise the estimate lower next month in its spring forecast. Greece’s Economy and Finance Ministry has predicted economic growth of around 1 percent for this year.