Financial News: Budget deficit widened to 12.781 billion euros in H1

Greece’s state budget deficit totaled 12.781 billion euros in the first half of the year, surpassing a budget target for a deficit of 10.374 billion euros and up from 9.997 billion euros in the same period last year, the Finance ministry said on Monday. In a report, the ministry attributed this negative development to a significant shortfall in budget revenues of more than 3.0 billion euros.
Budget revenues missed budget targets by 3.051 billion euros, while total spending was lower by 644 million euros in the January-June period. Net regular budget revenues totaled 21.814 billion euros, down 8.3 pct compared with the same period last year. The Finance ministry attributed the lower budget revenue figures to a deep recession, lower revenues from withholding tax revenue, lower incomes and higher tax returns.
The Public Investment Program’s revenues were 79.6 pct higher in the January-June period.
The Finance ministry expects the problem with lower revenues to improve in the second half, boosted by the performance of tax measures included in the Mid-term Fiscal Strategy Program for 2011-2015.
Budget spending grew 8.8 pct, reflecting higher payments for state hospitals’ existing debt and higher interest payments (1.277 billion euros). Primary spending grew 4.5 pct reflecting higher payments on social insurance funds. The Public Investment Program’s spending dropped 42.3 pct in the first half of the year.

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