Fatigue seen in primary surplus in Jan-Feb.

The excessive containment of state expenditure and the central bank dividend led to the budget posting a primary surplus of 2.1 billion euros on top of the target of 846 million euros in the January-February period, although this was below the figure seen in the same period last year (2.85 billion euros), according to data released om Tuesday by the State General Accounting Office.

The state is depriving the real economy of vital liquidity by not paying public entities, the main reason being that many hospitals have not yet submitted their budgets to the State General Accounting Office. The other main factor is the new automatic fiscal monitoring mechanism, which delays the disbursement of budget credit until expenditure has been fully probed. This results in an increase in expired debts to the private sector. In January payments were kept down to a minimum even though the cash reserves of the state amounted to 2.8 billion euros. Consequently, the market has already been starved of cash since the second month of the year.

At the same time, the momentum of budget revenues appears to have been curbed, but their figure remained high thanks to the dividend of the Bank of Greece, which was considerably higher than what the Finance Ministry had calculated.

The net revenues of the budget came to 7.98 billion euros in the year to end-February, 409 million or 5.4 percent higher than the budget target. This is to a great extent attributed to the higher BoG dividend and not the collection of more taxes. The dividend collected was 334 million euros above target (734 million euros).

State expenditure reached 7.91 billion euros, 1.03 billion euros less than the target of 8.94 billion in the first couple of months this year. In February, public spending came to 4.58 billion, while the expenditure of the Public Investments Program failed to meet its target for another month: It came to just 174 million against a target for 370 million euros, data showed.