Greece: Budgetary targets missed even before COVID-19

Greece: Budgetary targets missed even before COVID-19

Budget revenue fell by € 468 million in the first two months of the year. This means that Greece was off its fiscal targets even before the coronavirus spread began, in fact even before the first outbreak was confirmed.

According to official data, a 831 million-euro primary budget surplus was recorded in February against the target of 929 million euros and 822 million in the first two months of last year.

Net government revenue declined to € 7,557 million, € 468 million or 5.8% below target mainly due to reduced PIB revenue, while total revenue decreased to € 8,280 million, € 390 million or 4.5% below the target.

The categories of reductions

Specifically, during this two-month period, revenue dropped below the target in the following key categories:

* VAT on petroleum and petroleum-derived products by € 17 million or 5.4%,

* VAT on other products and services by € 13 million or 0.5%,

* Excise duties on energy products by € 23 million or 3.2%,

* Excise duties on tobacco products by € 15 million or 4.9%;

* Excise duties on other products by €12 million or 12.9%,

* Regular real estate taxes by € 26 million or 7.3%, of which: ENFIA by € 26 million or 7.7%,

* Personal income taxes by € 164 million or 9.5%,

* Other income taxes by € 14 million or 5.8%,

* Transfers by € 298 million or 39.9%.

Revenue amounted to € 723 million, € 78 million above the target (€ 645 million).

ΡIΒ revenue plummeted to 431 million euros, 342 million below target, due to a shortfall in the co-financed arm.

Reduced expenditure

Government spending for the two months amounted to € 8,664 million, € 175 million below target (€8,839 million) mainly as a result of:

* under-execution of transfers by € 143 million and

* underperformance in other major expenditure categories that were fed by partial consumption of the reserve.

Interest payments followed an opposite trajectory by € 196 million (increased expenditure over target). /ibna