No worries over primary deficit in 2021

The country’s primary budget deficit in the year’s first seven months was some 3 billion euros higher than in the same period last year, according to data processed by the Parliamentary Budget Office.

In its quarterly report the PBO noted that the primary deficit amounted to about €10.5 billion, against €7.5 billion in January-July 2020, reflecting the burden from the extraordinary fiscal interventions for tackling the effects of the pandemic.

However, according to the estimate by the office and its coordinator Franciscos Koutentakis, the primary deficit is not projected to exceed the target set by the midterm fiscal plan in April, as any overshoot will be offset by the higher gross domestic product.

However, as of 2022, the uncertainties are plenty, the report noted. They are related to the attitude of the European Central Bank regarding the extraordinary bond-buying program (PEPP) and the review of the rules of the Stability Pact, which will determine the range the Greek economy will move in. It added that regardless of the external conditions, the country must prepare for its return to fiscal balance so as to absorb any medium-term shocks from the pandemic.