Government misses budget revenue target

European concerns about the measures Athens has taken appear to be confirmed by budget data on the first two months of the year, as the Finance Ministry announced yesterday that revenues in the January-February period grew at an annual rate of 7.8 percent against a target of 9.2 percent. Ministry officials attribute the government’s missing the target to the industrial action by tax and customs employees. However, the last three weeks of this period have also seen a rise in the special consumption tax on fuel, tobacco and alcohol. The same officials express optimism that state revenues will grow in March as the new value-added tax rates come into force this Monday, while the second rise in tax on fuel, cigarettes and alcoholic beverages has already been factored in. There was better news from the expenditure side, as spending dropped by 9.6 percent in the first two months of the year against a targeted reduction of just 2.8 percent. Spending on the Public Investment Program remains meager, dropping by 58.2 percent relative to the same period in 2009, while the program’s revenues grew by 5 million euros.

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