Public debt balloons in third quarter

Greece’s public debt grew by 20 billion euros within three months and by 39 billion euros year-on-year, according to data released by the state’s General Accounting Office yesterday. At the end of September, central government debt reached 336.8 billion euros, amounting to 145.2 percent of gross domestic product, from 316.9 billion at the end of the second quarter and from 297.9 billion euros in the third quarter of 2009. The 2011 draft budget is based on the government’s assumption that this year’s debt will come to 343.2 billion euros, which would require that there be a relatively small increase of 6.3 billion for the last quarter of the year. The budget deficit has lagged the target set for the first 10 months of the year, as it has contracted by 30.2 percent instead of the 33.2 percent decline seen in the 2011 budget, government data showed yesterday. The deficit came to 17.334 billion euros, from 24.833 billion euros in the January-October 2009 period. The Finance Ministry released the data along with a statement that the drop in the deficit is mostly due to the drastic cuts in spending and the increase in revenues from last year: Expenditures declined by 7.1 percent year-on-year, while net revenues expanded by 3.7 percent. But these figures still lag the original targets set. The increase in net revenues to 3.7 percent from 3.6 percent in the first nine months of the year is attributed to the rise in inflows from value-added tax by 15 percent in October. The ministry is also offering Greeks with deposits abroad another chance to repatriate their capital without scrutinizing its origin by extending the deadline to December 31. The previous deadline had been October 15, up until which time some 130 million euros had been repatriated. The regulation concerns people or corporations taxed in Greece with major deposits abroad.