Financial News: Budget deficit up to 15.513 billion euro in Jan-July

The Greek state budget deficit widened to 15.513 billion euros in the seven months from January-July 2011, lower than the revised target of 16.465 billion euro under the Medium-Term Fiscal Strategy, the finance ministry said on Wednesday.
The deficit continues to be higher than the budget deficit for the same period in 2010, however, when it was 12.449 billion euro.
The figures were given in a finance ministry report on the execution of the budget adapted to the new requirements of the Medium-term programme, which called for measures to make up a considerable shortfall in budget revenues before it was passed by Parliament in July.
They showed that total budget revenues, from both regular sources and the Public Investment Programme, fell short of the revised budget target by 87 million euro. Total spending was also reduced by 1,049 million euro.
Net budget revenues totaled 26.847 billion euros, down 6.4 pct from the same period in 2010, reflecting a larger than expected economic recession in the country and non-repeat of 2010 revenues, as well as lower income tax revenues as a result of more favourable tax laws and lower incomes, as well as bigger tax refunds. The Public Investments Program’s revenues were down 8.1 pct or by 103 million euros in the January-July period.
The finance ministry, in a statement said a shortfall in revenues was expected to be effectively dealt with in the remaining five months with the performance of tax measures included in laws executing the Medium-term Fiscal Strategy.
Regular budget spending rose 7.1 pct from 2010, reflecting higher interest payments, increased subsidies to pension funds, higher payments for unemployment benefits and higher payments for state hospital debt.
Primary spending rose 4.7 pct, or by 1.350 billion euros, while Public Investments Program spending fell by 37.6 pct or 1.581 billion euro.

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