ECONOMY

Gov’t sees no problems with budget, despite cost of pensions

Economy and Finance Minister Nikos Christodoulakis said yesterday the execution of the 2002 budget was generally proceeding well, despite divergences from the targets which were perfectly normal given the global economic recession and unforeseen expenses. «Revenues are doing well, growing at rates slightly higher than those set,» he told a parliamentary committee, adding that expenditure in the January-September period was up 9 percent, against a target of 6 percent. Christodoulakis attributed the overruns to a number of events, such as bad weather, which necessitated the disbursement of 200 million euros in compensation to farmers, higher interest payments by 250 million euros, and 450 million euros for additional requests from ministries. There will also be a 330-million-euro overrun in tax rebates, he said. Christodoulakis said the overruns were not excessive, and year targets will on the whole be attained. «Greek GDP is mainly affected by domestic factors and has greater resistance to any negative developments… The public investment program continues at rapid rates, despite delays in the inflow of EU investment subsidies. This proves that growth rates are only to a small degree due to EU funds. Our growth rate was not affected by the economic recession at EU level and was actually better than forecast in the first half,» he said. Social budget Labor and Social Security Minister Dimitris Reppas said expenditure on social protection – which includes social security, health and welfare – was up 10.95 percent over last year to 29.47 billion euros, which represents 21.09 percent of the country’s GDP. The cost of pensions, which accounts for most social security expenditure, increased 10.23 percent to 13.2 billion euros, while spending on health and welfare rose from 10.6 billion to 12 billion euros. Reppas said social budget expenditure increased by more than 14 percent between 1993 and 2002. He said social security funds will show a surplus of more than 600 million over expenditure of 19.2 billion euros this year. According to the social budget, the total value of the assets of social security funds at the end of last year was 16.67 billion euros from 16.11 billion a year earlier. The draft 2003 budget, unveiled on September 25, provides for an 18.9 -percent increase in funds to the Labor and Social Security Ministry. The worsening ratio between those at work and pensioners, which now stands at 1.79 for main pension funds and 2.39 for auxiliary funds, has necessitated increasing support from the budget in recent years.