Bloomberg News

Greek First-Half State Budget Gap Narrows, Beats Aid Target

July 10, 2012

Greece’s state budget deficit narrowed in the first half of the year, beating targets set under its bailout agreement with the European Union and the International Monetary Fund.

The shortfall, which excludes spending by state-owned institutions and companies, fell to 12.3 billion euros ($15.1 billion) from 13.1 billion euros a year earlier, according to preliminary figures from the Finance Ministry in Athens today. That was less than a target of 14.9 billion euros.

Ordinary budget revenue was 21.8 billion euros, in line with the year-earlier result and below a target of 22.8 billion euros. Revenue was damped by lower tax income, which the ministry said was due to slower domestic demand and an extension granted to individuals and companies to submit their taxes.

Greece, which has struggled to meet targets for narrowing its budget deficit while receiving aid pledges of 240 billion euros over the past two years, is racing to make up for time lost after the country held two elections in six weeks. Prime Minister Antonis Samaras is bidding for looser aid conditions from creditors amid a fifth year of recession that is hurting tax-collection efforts.

Ordinary spending was 33.6 billion euros in the first half, matching the year-earlier level, as the government clamped down on expenses including military spending, according to the statement. The target was 35.9 billion euros.

The primary deficit in the period, which excludes interest payments, was 3.2 billion euros, down from 6.1 billion euros a year earlier. The target was 5.3 billion euros.

To contact the reporter on this story: Maria Petrakis in Athens at mpetrakis@bloomberg.net

To contact the editor responsible for this story: Stephen Foxwell at sfoxwell@bloomberg.net


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