Bloomberg News

Greek State Budget Shortfall Widened 15% in First 9 Months

October 12, 2011

(Updates with analyst comment in fourth-paragraph.)

Oct. 12 (Bloomberg) -- Greece’s central-government deficit widened 15 percent in the first nine months of the year, meeting a target in the budget.

The shortfall, which excludes outlays by state-owned institutions and companies, rose to 19.2 billion euros ($26.5 billion) from 16.7 billion euros a year earlier, according to preliminary figures e-mailed today by the Finance Ministry in Athens. The new nine-month target was 19.2 billion euros, the statement said.

The government’s 2012 budget draft revised this year’s deficit target to 8.5 percent of gross domestic product. The draft was passed at the parliament committee level this week.

“The fact that the fourth-quarter of 2011 is seasonally soft on interest costs means that there is a good chance that we will see the overall budget in balance or even some surplus,” Athens-based Alpha Finance analyst Nikos Lianeris said in an e- mail today.

Spending and revenue performance in the period was in line with the new targets. Ordinary spending rose 7 percent from January through September to 52.5 billion euros, the ministry said. Net revenue decreased 4.2 percent to 35 billion euros.

The ministry blamed the revenue drop on a deeper-than- forecast recession and an increase in tax rebates. Final central-government data are due around Sept. 20.

--With assistance from Maria Petrakis in Athens. Editors: Jennifer M. Freedman, Colin Keatinge

To contact the reporter on this story: Natalie Weeks in Athens at nweeks2@bloomberg.net

To contact the editor responsible for this story: Angela Cullen at acullen8@bloomberg.net


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