Sunday, November 14, 2010

Greek Budget Review: October 2010

The October Budget Execution Bulletin (in Greek, here) shows little change from the figures presented in September 2010. Revenues for the year until October were up 3.7% versus 3.6% in September – a modest improvement but still shy of the 8.7% target in place since September 2010. Expenditures remained 7% down versus last year, but are still short of a (revised) target of 7.8%.

Overall, the deficit is down 29.9%, which is one percentage point below the September 2010 figure (30.9%), and a full seven percentage points below the target of 36.9%. What is more, the budget balance reduction is the smallest that has been accomplished so far in the year, pointing to further difficulties in reaching the targets.

In other words, the story that has been shaping in the past few months remains: revenues are under-performing, with the state being unable to raise as much as it needs (see here for more details); expenditures are falling as much as forecasted, and often more – leading to higher targets; and the budget deficit is declining by slightly less than is forecasted, and the reduction in the deficit is getting smaller as time goes on.

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