31/12/2014 06:11
The fiscal surplus in the general government accounts was maintained up to the end of November raising hopes that this year's deficit will be lower than even the revised target of the ministry of finance.
According to the official figures released by the ministry of finance the fiscal balance for the first eleven months of 2014 showed an improvement of €850,3 mil compared to last year's corresponding period.
The achieved surplus of €223,6 mil represents 1,28% of GDP compared with a deficit of 3.46% or €626.7 mil in 2013.
The substantial improvement in fiscal balance enhances the belief that this year's fiscal deficit will be limited to below MoF's expectation of 2,5% of GDP compared to last year's 4,7% and Troika's estimation for 2014 of 5,7%.
The ministry expects to achieve in 2014 a primary surplus of 0,5%, 2 years earlier than Troika's expectation.
The MoF insists that its target remains the same as December always presents the biggest deficit due to the increased salaries to be paid.
In December 2013 there was a deficit of €250 mil. while in the same month of 2012 the deficit reached €130 mil.
The considerable reversal of the fiscal balance in 2014 was the result of an increase in public revenues by 4,32% (from 5,6 bil to 5,84 bil) and a decrease in public spending by 9,78% (from 6,22 bil to 5,62 bil).
With the exemption of income tax revenues which decreased as a result of the deceleration of the economy all other revenue categories increased with the V.A.T. revenues getting a major boost due to the higher VAT rate imposed at the beginning of the year.
Main contributors to the decline in public expenditures were the 4,4% decrease in salaries and wages as well as the 12,6% reduction in purchases of goods and services.
Interest payments recorded a decline of 15.94% reaching €450 mil from €535 mil in 2013.
A €300 mil decrease in expenditures is attributed to last year's extraordinary payments for covering provident funds that had deposits in Cyprus Popular Bank.
The primary balance (excluding debt servicing expenditure) for the first 11 months reached €673.4 mil, compared with -€91,7 mil in 2013.
According to the program the expected fiscal deficit for 2014 is €210 mil. or 1,3% of GDP.
The IMF projects a 3,2% fiscal deficit.
According to the official figures released by the ministry of finance the fiscal balance for the first eleven months of 2014 showed an improvement of €850,3 mil compared to last year's corresponding period.
The achieved surplus of €223,6 mil represents 1,28% of GDP compared with a deficit of 3.46% or €626.7 mil in 2013.
The substantial improvement in fiscal balance enhances the belief that this year's fiscal deficit will be limited to below MoF's expectation of 2,5% of GDP compared to last year's 4,7% and Troika's estimation for 2014 of 5,7%.
The ministry expects to achieve in 2014 a primary surplus of 0,5%, 2 years earlier than Troika's expectation.
The MoF insists that its target remains the same as December always presents the biggest deficit due to the increased salaries to be paid.
In December 2013 there was a deficit of €250 mil. while in the same month of 2012 the deficit reached €130 mil.The considerable reversal of the fiscal balance in 2014 was the result of an increase in public revenues by 4,32% (from 5,6 bil to 5,84 bil) and a decrease in public spending by 9,78% (from 6,22 bil to 5,62 bil).
With the exemption of income tax revenues which decreased as a result of the deceleration of the economy all other revenue categories increased with the V.A.T. revenues getting a major boost due to the higher VAT rate imposed at the beginning of the year.
Main contributors to the decline in public expenditures were the 4,4% decrease in salaries and wages as well as the 12,6% reduction in purchases of goods and services.
Interest payments recorded a decline of 15.94% reaching €450 mil from €535 mil in 2013.
A €300 mil decrease in expenditures is attributed to last year's extraordinary payments for covering provident funds that had deposits in Cyprus Popular Bank.
The primary balance (excluding debt servicing expenditure) for the first 11 months reached €673.4 mil, compared with -€91,7 mil in 2013.
According to the program the expected fiscal deficit for 2014 is €210 mil. or 1,3% of GDP.
The IMF projects a 3,2% fiscal deficit.
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