Greek state budget showed primary surplus of 2.751 bln euros in January-February

The Greek state budget showed a primary surplus of 2.751 billion euros in the first two months of the year, up from a budget target for a surplus of 1.307 billion and a primary surplus of 2.135 billion euros in the same period in 2017.

The state budget showed a surplus of 1.542 billion euros on an amended cash basis in the January-February period, up from a budget target for a surplus of 98 million and a surplus of 434 million in the same period last year.

State budget net revenue was 8.975 billion euros, up 14.5 pct from targets, while regular budget net revenue was 8.299 billion euros, up 8.9 pct from targets. In the January-February period, revenue exceeded targets in the categories of: income taxes (6.4 pct), corporate taxes (123.9 pct), property taxes (15.5 pct), direct taxes (14.9 pct), VAT (1.4 pct), special consumption taxes (2.6 pct), indirect taxes (37.1 pct), EU receipts (1,320.5 pct), other non-tax revenue (31.3 pct) and NATO revenue (up 34 million euros).

On the other hand, revenue fell short of targets in the categories of: special categories income taxes (-12.7 pct) and special consumption taxes on energy products (-7.9 pct).

Tax returns totaled 719 million euros in the two-month period, up 110 million euros from budget targets. Public Investment Programme revenue was 675 million euros, up 458 million from targets.

State budget spending was 7.433 billion euros in the January-February period, down 310 million from targets, while regular budget spending amounted to 7.246 billion euros, down 112 million from targets. State budget spending was down 476 million euros compared with the same period in 2017. Public Investment Programme spending was 187 million euros, down 198 million from targets.

In February, state budget net revenue was 4.222 billion euros, up 274 million from monthly targets, while regular budget net revenue was 4.151 billion euros, up 314 million from monthly targets. The February figures included dividend payments worth 614.2 million euros by the Bank of Greece. Public Investment Programme revenue was 71 million euros, down 40 million from monthly targets. Tax returns were 394 million euros in February, up 116 million from targets.

State budget spending totaled 4.257 billion euros in February, down 95 million from targets, while regular budget spending amounted to 4.154 billion, up 11 million from monthly targets. Public Investment Programme spending was 104 million euros, down 106 million from targets.

In addition, the Greek state budget will show a primary surplus of more than 3.5 pct of GDP in this year, from 3.3 pct in 2017, as the country continues its positive fiscal performance in 2018, the Hellenic Fiscal Council said in a report released on Monday.

The report underlined a significant decline in Greek state bond yields – they fell to record-low levels of 3.6 pct in January – as a result of a strengthening credibility of the Greek economy and an increase in GDP by 1.4 pct in 2017, the second year in which Greece’s GDP grew since 2008.

The report noted that the Greek budget showed higher surpluses this year and stressed that Public Investment Programme revenues grew significantly in the first month of 2018 compared with the same month last year and compared with budget targets. The Council said that, according to a government policy, borrowing from international capital markets will be aided by a cash buffer, offering more safety and confidence in the period after the end of the memorandum in August. The report noted that investments (gross fixed capital formation) grew by 9.6 pct, while capital investments grew 15.7 pct, having the biggest contribution to GDP growth, while private consumption had an almost zero contribution to GDP growth. The Council said that a recovery in private consumption was necessary to achieve even higher economic growth rates in the future.