ECONOMY

Deficit fell by 36.5 pct in 2010

The government managed to contain the budget deficit in 2010 to 19.6 billion euros, not through collecting the revenues it had hoped for but via extensive cuts in salaries, pensions and other spending, official data showed yesterday. The Finance Ministry announced that the 2010 deficit was actually 1 billion euros smaller than that used as a starting point for the 2011 budget. It went down by 36.5 percent from 2009 to 19,603 million euros, against a forecast for a 33.2 percent decline. The deficit in 2009 had stood at 30,871, according to the conclusive figures issued a few weeks ago by the European Union’s statistics office, Eurostat. Crucially, the ministry announced that the amount of 433 million euros paid out to local authorities did not burden the 2010 figures but was included in the 2009 deficit, which immediately signified an improvement on 2009 by over 850 million euros. Defense spending was another factor that helped bring the budget deficit down, as it shrank by a significant 470 million euros last year. Primary expenditure fell by 10.7 percent, against a 9 percent target, while net revenues expanded by 5.5 percent against a 6 percent target. The figures serve to boost hopes for a better execution of this year’s budget, with the ministry turning its attention to improving the performance of tax collection mechanisms. Separately, the Hellenic Statistical Authority (ELSTAT) announced yesterday that industrial output declined by 7.6 percent in November compared with the same month in 2009. The monthly decline from October 2010 amounted to 2.8 percent. In the first 11 months of last year industrial output shrank by no less than 5.7 percent, with manufacturing faring slightly better, dropping by 4.9 percent on a yearly basis. ELSTAT added that the trade balance deficit dropped significantly by 40 percent year-on-year in November thanks to the major fall in imports that is attributed to the decline in consumption. Imports fell by 17.1 percent from November 2009 to end at 3.3 billion euros. On the other hand, exports grew by 39.8 percent to reach 1.6 billion euros, as the main markets for Greek products are emerging from the crisis.