According to the data available for the execution of the State Budget for the five months January – May 2011, on fiscal basis, the deficit amounts to 10,260 million euros compared to the target of 9,072 million euros set in the 2011 Budget.
During the same period in 2010, the State Budget deficit amounted to 9,100 million Euros, said the Finance Ministry in a statement.On State Budget for the first five months (Ordinary and Public Investment Budget), expenditures are lower than the budget target (30,027 mil. Euros) by 736 million euros while State Budget total revenues (Ordinary and Investment Budget) have a shortfall by 1,924 million euros compared to the budget target (20,955 mil. euros).
The five month revenue shortfall can be mainly attributed to the larger than projected recession – during the period when the Budget was being prepared – in the last quarter of 2010, lower receipts from vehicle’s circulation fees by 393 million Euros in January 2011 (because the due date for payment was not extended into January 2011, as in 2010), reduced receipts from withholding personal income tax in 2011 due to the more favourable tax treatment of personal income as a result of the new tax law and the increased tax refunds for the settlement of past years’ obligations. On the other hand, revenues from the Public Investment Budget increased by 117.5% or 363 million Euros vis-à-vis the five months of 2010.
On the other hand, May revenues are increased by 4.7% against May 2010 followed by an increase concerning net revenues by 1.3% despite increased revenue refunds by 151 million euros against May 2010. On a five month basis (January – May), net revenues amounted to 18,358 million Euros, restricting their shortfall to 7.1% comparing to the respective period of 2010 and to 9.1% against the four months (January – April).
It should be noted that the report on the execution of the State Budget provides revenue data for the five months of 2011 on a cash basis. The total level of revenues for 2011 on a national account basis, however, is calculated based on the course of revenues in the first two months of 2012 also, while part of the revenues for the first months of 2011 contribute to the calculation of 2010 revenues on a national accounts basis.
Ordinary budget expenditures increased by 6.4% compared to the same period of 2010. This increase mainly is due to the transfer of 375 million Euros to hospitals for the settlement of past debts and increased interest payments expenditures by 447 million euros. Primary expenditures increased by 4.3% or 872 million Euros during the same period, mainly due to the increased grants to Social Security Funds (Agricultural Insurance Organization -OGA, to Wage Earners Fund -IKA), to the Employment Agency (OAED) and to Hospitals for the settlement of their obligations from procurement.
Moreover, Public Investment Budget (P.I.B.) expenditures declined by 47.3% or 1,528 million euros.
It should be noted that the above data correspond to the execution only of the State Budget and thus do not reflect all fiscal data that are taken into account when measuring the General Government deficit according to the ESA95 (Eurostat’s) classification, which is the benchmark for the assessment of the Economic Policy Programme of Greece.
