Bloomberg News

Greek Four-Month State Budget Deficit Widens, Beats Target

May 11, 2012

Greece’s state budget deficit in the first four months of 2012 beat a target set out under the country’s loan accords with the European Union and the International Monetary Fund.

The shortfall, which excludes spending by state-owned institutions and companies, was 9.1 billion euros ($11.8 billion) compared with a target of 11 billion euros, according to an e-mailed statement from the Athens-based Finance Ministry. The January-through-April deficit in 2011 was 7.4 billion euros, the ministry said.

Greece’s political party leaders are in a fifth day of talks to form a government after inconclusive May 6 elections gave no party a parliamentary majority. Under the terms of its second bailout in March, Greece must detail savings of 11 billion euros next month.

The primary deficit in the first four months narrowed to 1.68 billion euros from 3.56 billion euros a year earlier. Ordinary budget revenue was 14.7 billion euros, compared with a target of 15 billion euros, while ordinary spending was 24.3 billion euros compared with a target of 25.8 billion euros, the ministry said.

Greece’s general budget gap will widen to 8.4 percent of gross domestic product in 2013 from a projected 7.3 percent this year if a new government doesn’t pass additional spending cuts of 3.8 percent of GDP in the coming months, the European Commission said in a report today.

The central government’s cash deficit narrowed to 3.1 billion euros in the first four months from 6.8 billion euros in the same period in 2011, the Bank of Greece said in a separate statement.

To contact the reporters on this story: Marcus Bensasson in Athens at mbensasson@bloomberg.net; Natalie Weeks in Athens at nweeks2@bloomberg.net

To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net


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