13/10/2003 08:23
According to Finance Ministry latest data, the fiscal deficit for January-June 2003 soared to £187 million, which is almost double than the deficit of the corresponding period of 2002. This is mostly attributable to the increase of 22% in the public expenditure, which outbalanced the increase of 14% in public revenues. The fiscal deficit for the first half of 2003 is the highest in the past five years.
During the first half of 2003, the government spent an additional amount of £221 million compared to the corresponding period of 2002. This sum overbalanced the increase in revenues (£131mln), expanding the deficit by £90 million.
The increase in public expenditure is mostly attributable to the increased salaries of the civil servants (+19%) and to increased subsidies (+176%).
VAT
The increased expenditure has overweighed the increase of £131 million in the state revenues, derived from the Value Added Tax. The VAT ratio increase from 10% to 15% increased the VAT revenues by 38% or £67 million, which offset the losses of 21% or £40 million from the income tax.
The non-tax revenues have increased by 48% or £61 million.
Deficit of £358 million for 2003
The increase in deficit was anticipated after the upward revision of the Finance Ministry’s initial estimates. Specifically, the Ministry anticipates that deficit will reach 5.4% of the GDP or £358 million by the end of the year. The deficit of £187 million for January-June corresponds to 2.8% of the GDP.
The Budget 2004 estimates that the deficit will drop to £260 million or 3.7%, while government anticipates that by 2006 the deficit will stand at 2.2% of GDP.
During the first half of 2003, the government spent an additional amount of £221 million compared to the corresponding period of 2002. This sum overbalanced the increase in revenues (£131mln), expanding the deficit by £90 million.
The increase in public expenditure is mostly attributable to the increased salaries of the civil servants (+19%) and to increased subsidies (+176%).
VAT
The increased expenditure has overweighed the increase of £131 million in the state revenues, derived from the Value Added Tax. The VAT ratio increase from 10% to 15% increased the VAT revenues by 38% or £67 million, which offset the losses of 21% or £40 million from the income tax.
The non-tax revenues have increased by 48% or £61 million.
Deficit of £358 million for 2003
The increase in deficit was anticipated after the upward revision of the Finance Ministry’s initial estimates. Specifically, the Ministry anticipates that deficit will reach 5.4% of the GDP or £358 million by the end of the year. The deficit of £187 million for January-June corresponds to 2.8% of the GDP.
The Budget 2004 estimates that the deficit will drop to £260 million or 3.7%, while government anticipates that by 2006 the deficit will stand at 2.2% of GDP.
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