Greek Jan-April primary budget deficit comes in wider than expected

Greece’s central government posted a wider-than-expected primary budget deficit of 6.21 billion euros ($7.54 billion) in the first four months of the year due to lower tax revenues, finance ministry data showed on Monday.

The government was targeting a primary budget gap, which excludes debt-servicing costs, of 5.24 billion euros for the January-April period.

“The budget had not taken into account protracted, months-long lockdowns for 2021, so the shortfall has been expected and largely limited,” Deputy Finance Minister Theodore Skylakakis told a briefing.

Greece has extended Covid-19 restrictions several times since last year to curb the spread of the Covid-19 pandemic, which hurt its economy shortly after it had emerged from a decade-long debt crisis.

The data for the first four months of 2021 showed total budget revenues reached 15 billion euros, 477 million euros, or 3% below the government’s target. In April, tax revenues fell by an annual 8%.

The government expects a primary budget shortfall of 7% of gross domestic product this year due to fiscal support extended to mitigate the economic toll of the pandemic.

However, the country forecasts the deficit to zero next year, as state support is due to be gradually withdrawn while the economy rebounds and funds flow from a multi-billion European Union recovery package.

Greece expects its economy to grow by 3.6% this year after a 8.2% slump last year, with growth picking up pace to 6.2% in 2022.

[Reuters]