ECONOMY

Drys: 2002 budget will be affected by attacks in US

The execution of this year’s budget will not be affected by the repercussions of the events of September 11 in the US, but there will be effects on the 2002 budget, along with a slowing down in the rate of economic growth and growth in public revenues, Deputy Finance Minister Giorgos Drys said yesterday. Speaking at a press briefing, he said the basic indicators of the 2001 budget were well within target in the first eight months (January-August), with revenues up 9 percent against a growth target of 7.9 percent. In addition to the draft budget for 2002 which the government will present on Monday, and which was prepared before the recent events, the government will submit an alternative scenario with revised figures, Drys said. These will include cutbacks in public consumption to offset the projected shortfall in revenue. According to sources, the alternative scenario will provide for a 4-percent economic growth rate instead of the initial 4.6 percent, but the budget figures will not be finalized before November when the final draft is tabled in Parliament. For 2001, the National Economy Ministry has revised its forecast of the growth rate from 4.6 percent to 4.3 percent. In the eight months, public spending grew 2.5 percent, compared to the same period last year, to 9,296 billion drachmas, against a 5.7-percent annual target. Of this amount, 61 percent concerned primary spending, 25 percent interest payments and 14 percent the Public Investment Program (PID). Just over half of primary expenses, or 51 percent, represented wages, pensions, hospital bills and additional benefits for public servants, and 23 percent were subsidies to social insurance funds. Interest payments were on the same level as last year, while PID spending was below target, largely attributed to new stricter regulations for the EU-subsidized 2001-2006 investment plan (CSF III). In the meantime, Greece will be cushioned from the worst of the predicted global recession, unlike the major eurozone member states.