Greek first-half budget deficit down 46 pct y/y

By IBTimes Staff Reporter | July 12 2010 10:43 AM

Greece almost halved its central government budget deficit in the first six months of the year as drastic spending cuts outweighed weaker than expected tax revenues, the finance ministry said on Monday.

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The deficit, which does not include spending by local government and social security organisations, stood at 9.65 billion euros ($12.16 billion) from 17.9 billion euros in the same period in 2009, the ministry said in a statement.

(The deficit) shrank 46 percent compared with an annual target of 39.5 percent, the statement said.

Greece managed to cut spending by 12.8 percent, beating an annual target for a 5.5 percent cut. Public investment was slashed by 40 percent to 3.7 billion euros.

By contrast, net budget revenues fell short of an annual 13.7 percent increase target, rising by just 7.2 percent.

The figures refer to the central government deficit, not the general government shortfall measured under euro zone rules, and therefore do not offer a complete picture.

The general government deficit includes hefty spending areas such as welfare and pension payments. Greece has pledged to slash the general government deficit to 8.1 percent of GDP from 13.6l percent last year as part of a 110 billion euro bailout from the European Union and the International Monetary Fund. (Reporting by Harry Papachristou; Editing by Ingrid Melander and Stephen Nisbet)