By T. Tsiros
[email protected]
The second half of 2018, as expected, will in large part determine the success in executing the year’s state budget, as figures from the first half of the year – announced on Monday – show that the primary budget surplus target (as a percentage of GDP) is revised to 1.769 billion euros, down from a much more ambitious 4.257 billion euros. The latter was cited in the 2018 budget, which was ratified last year by Parliament.
The revision was announced in the updated Medium-term Fiscal Strategy (MTFS).
As such, for the Tsipras government to achieve a primary budget surplus goal for 2018 – the now revised 3.56 percent, down from 3.82 percent – the finance ministry must now also revise forecasts for other general government indices, especially those involving the fiscal performances of wider state sector entities, municipalities and, to a lesser extent, pension funds.
Specifically, in order to fulfill the annual target, revenues in the second half of the year (July-December) must exceed 30.86 billion euros, up from 21.96 billion in the first half.
In terms of Monday’s announced figures for the primary budget surplus, the sum reached 617 million euros, significantly up from a forecast deficit of 465 million euros, whereby exceeding the target by 1.082 billion euros in H1.
The over-performance, however, is mostly attributed to less spending, especially by cutting back the already shrinking public investment program. Revenues, on the other hand, exceeded the target by 131 million euros in the first half of 2018, compared with the forecast.
