Greece’s 2012 Budget Deficit Narrows 30 Percent to Beat Target

Greece’s budget deficit narrowed 30 percent in 2012, beating a target set for the year as the country cut spending.

The budget gap, excluding spending by state-controlled enterprises, narrowed to 15.9 billion euros ($21 billion) from 22.8 billion euros in 2011, according to preliminary figures released today by the Athens-based Finance Ministry. The government target for the period was 16.3 billion euros.

In November, Greece’s coalition government approved new austerity measures to obtain aid under two bailouts from the European Union and the International Monetary Fund. The economy may have contracted as much as 6.5 percent in 2012, the fifth year of recession, according to forecasts in the 2013 budget.

“These positive indicators show that our efforts for fiscal consolidation, adjustment and discipline have started yielding results,” Alternate Finance Minister Christos Staikouras wrote in a separate e-mailed statement today. “However this satisfactory budget execution result doesn’t allow for celebration. The road that we must travel is a long and difficult one.”

The primary deficit, which excludes debt-service costs, was 3.7 billion euros compared with a goal of 4.6 billion euros. Net revenue fell 4.1 percent to 51.7 billion euros compared with a target of just under 52.4 billion euros. Spending dropped to 67.6 billion euros from 76.7 billion euros, beating a target of 68.7 billion euros.

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