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2014 fiscal balance improved by €900 m.

11/02/2015 06:03
The fiscal balance recorded a surplus of € 68 million in 2014 versus € 844 million deficit in 2013, despite the unfavorable macroeconomic environment.

New figures announced by the Ministry of Finance show that the budget balance improved by € 911,6 million compared to last year due to increased revenues and reduced costs.

The fiscal balance recorded a surplus of € 68,1 m or 0.39% of GDP against a deficit of € 843,6 m or 4.66% last year 2013.

The improvement in the budget balance exceeded estimates of the Ministry of Finance that this year's deficit would amount to 2.5% of GDP. Despite the economic downturn state revenues improved significantly recording an increase of 3.8% or €238,6 m reaching € 6529,1 million from € 6290,5 million.

Tax revenues increased by € 215,7 million while € 115,3 million came from indirect taxes, € 42,7 m from direct taxes and €57,6 m where contributions to the SSF.

VAT revenues increased by € 84,5 m while non-tax revenues increased by € 22,9 million.

Cost cutting contributed significantly to the improvement of the fiscal balance.

Public spending fell by9.6% or € 702,4 million to € 6593,0 million from € 7295,4 m in 2013.

Current transfers recorded a fall of € 345,2 million while spending on debt service fell by € 107,2 m. The decrease in current transfers is largely due to the 2013 extraordinary expenses for compensation of provident funds.

Spending on salaries also decreased by € 71,8 million while expenditure on purchases of goods and services fell by € 55,9 m.

The primary surplus, that is surplus without the cost of debt servicing, amounted to € 534,4 m compared to a deficit of € 270 m in 2013.

According to the program’s fiscal targets, this year the primary fiscal deficit should be reduced to € 210 million or 1.3% of GDP.

Troika’s estimate after the fifth evaluation of the program was that the deficit would reach 4.7% of GDP, while IMF’s October forecast referred to a deficit of 4.4% of GDP.