According to the preliminary data available for the execution of the State Budget for the nine months January – September, on a fiscal basis, the deficit amounts to 19,163 million Euros compared to the new target of 19,242 million Euros set in the Preliminary Draft Budget submitted in the Parliament for 2012. During the same period in 2010, the State Budget deficit amounted to 16,650 million Euros.

On State Budget (Ordinary and Public Investment Budget), expenditures are lower than the new target by 74 million Euros while State Budget total revenues (Ordinary and Investment Budget) are increased by 5 million Euros.

In particular, on a nine month basis (January – September), net revenues amounted to 34,980 million Euros and they are declining by 4.2% comparing to the respective period of 2010 and restricting the shortfall (5.3%) in the first eight months of 2011. The revenue shortfall can be mainly attributed to the larger than projected recession – during the period when the Budget was being prepared – in the last quarter of 2010, the reduced receipts from withholding personal income tax in 2011 due to the more favourable tax treatment of personal income as a result of the new tax law and the income reduction, and finally, the increased tax refunds due to the clearing of past years’ obligations.

The revenues from the Public Investment Budget increased by 39.2% or 529 million Euros vis-à-vis the nine months of 2010.

It is noted that the current revenue shortfall is expected to be tackled during the next three months, based on the anticipated performance of the tax regulations included in the implementing Law of the Medium Term Financial Strategy 2011-2015.

Furthermore, It should be noted that the report on the execution of the State Budget provides revenue data for the nine months of 2011 on a cash basis. The total level of revenues for 2011, on a national account basis however, is calculated based on the course of revenues in the first two months of 2012 also, while part of the revenues for the first months of 2011 contribute to the calculation of 2010 revenues on a national accounts basis.

Ordinary budget expenditures increased by 7.0% compared to the same period of 2010. This increase is mainly due to:

  • the increased interest expenditures by 2,381 million Euros,
  • the increased grants to Social Security Funds as a result of the reduced receipts from social security contributions by 1,862 million euros,
  • the increased grant to Employment Agency (OAED) for the payment of unemployment benefits by 306 million Euros and
  • to hospitals by 834 million euros (700 million euros for the year’s 2011 procurements expenditure and 134 million euros for the settlement of past years obligations from procurement).

In particular, primary expenditures increased by 2,9% or 1.050 million Euros during the same period, mainly due to the increased grants to Social Security Funds (primary to the Agricultural Insurance Organization – OGA by 471 million Euros and to the Wage Earners Fund – IKA by 1,307 million Euros), to OAED by 306 million Euros and to hospitals by 700 million Euros.

Moreover, Public Investment Budget (P.I.B.) expenditures declined by 35.1% or 1,906 million Euros.

It should be noted that the above data correspond to the execution only of the State Budget and thus do not reflect all fiscal data that are taken into account when measuring the General Government deficit according to the ESA95 (Eurostat’s) classification, which is the benchmark for the assessment of the Economic Policy Programme.