Deficit of 2012 to be 0.5 pct of GDP less than forecast

Deficit of 2012 to be 0.5 pct of GDP less than forecast
The 2012 budget will close “slightly better” than expected, according to a top Finance Ministry official, which creates a small cushion for this year and sends a message to the country’s creditors that Greece is on the right path.

According to sources, the state budget will show a deficit that is smaller than forecast by about 0.5 percent of gross domestic product, or almost 1 billion euros. A clearer picture will emerge in the second half of January, while the financial year will conclude at end-February when the last tax revenues for 2012 will be cashed in.

This positive development is exclusively attributed to the considerable drop in state spending, as revenues are actually smaller than in 2011. Nevertheless there are still some issues regarding the expenditure side, which mostly concern covering the needs of social security funds.

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