Budget measures off target

Recent government measures to raise taxes and cut state spending in a bid to meet fiscal goals are off target, according to a report released yesterday. Alpha Bank’s weekly economic report said tax hikes announced in March and June do not combat tax evasion, while announcing that spending cuts do not appear to be resulting in a drop in primary government expenditures. «The above measures will of course limit the budget deficit in 2009, but it is still likely to exceed 4 percent of GDP,» the report said. The Greek government is aiming for a budget deficit of 3.7 percent of gross domestic product this year, in order to lower it to below 3 percent next year, in line with European Union requirements. The Economy and Finance Ministry said in June it will raise an additional 1.8 billion euros by upping levies on products and services such as mobile telephony and fuels, while in March it slapped a one-off tax levy on high income earners and froze pay hikes for public servants.