More revenue due to stronger growth and higher inflation
Irini Chrysoloras
From 2022, the balance of the general government passed into positive territory, with a primary surplus of 0 .1% of GDP or 273 million euros, against the forecast of the 2023 budget for a deficit of 1.6% of GDP or 3.4 billion euros, according to the data released by ELSTAT and Eurostat, in the context of excessive deficit process.
This impressive improvement, compared to the forecast, is the result of statistical adjustments made by Eurostat (revenues from ANFAs and SMPs were calculated in 2022, while the expenditure for the increase of Attica Bank's share capital was transferred to 2023), but also of the overperformance of the revenues , due to higher growth (it was 5.9% against a forecast of 5.6%) as well as the underperformance of some expenditures.
In any case, it sends a positive signal to markets and sets the stage for a solid performance this year as well, as revenue outperformance continues, although Eurostat adjustments and pre-election benefit packages will weigh on this year's result.
In the stability program that the government will submit on April 30 to the E.U. will hold roughly steady the target of a primary surplus of 0.7% of GDP this year and rise to 2% of GDP in 2024 and beyond.
Greece also had the largest reduction in debt as a percentage of GDP, among EU countries, in 2022 compared to 2021. Specifically, the debt decreased by 23.3 percentage points and reached 171.3% of GDP , which remains, of course, the highest by far in the EU. According to the recent IMF Fiscal Monitor report, this reduction is the result, almost equally, of both growth and high inflation.
In absolute terms, after all, the debt increased: it was 356.25 billion euros, against 353.48 billion euros in 2021. The GDP exceeded 200 billion euros, reaching 208.030 billion euros from 181.67 billion in 2021.
There was also a significant reduction in the deficit, including interest: It was held at 2.3% of GDP from 7.1% of GDP in 2021 and from 9.7% of GDP in 2020. It should be noted that the excessive deficit limit under the Stability Pact is 3% of GDP. Greece, with the performance of 2.3% of GDP, is in the 13th lowest position in the EU.
The average deficit in the Eurozone was 3.6% of GDP and in the E.U. 3.4% of GDP. According to ELSTAT data, spending as a percentage of GDP has been steadily decreasing since 2020, when it jumped due to the coronavirus, although in absolute terms it continued its upward trend. On the contrary, revenues are maintained at approximately stable levels as a percentage of GDP from 2020, but also increase in absolute terms.
Commenting on the publication of the results by ELSTAT, Finance Minister Christos Staikouras stated: “Today, official statistics confirm that Greece managed to bring the budget deficit to zero in 2022, even recording a small primary surplus. We thus achieved, all together, households, businesses, state and government, the largest – pan-European – fiscal improvement, despite the fact that the social support measures were among the most generous in Europe. In the same year, the country's GDP increased by 26 billion euros. And public debt fell by 23% of GDP. The Greek economy has turned the page. He returned, powerfully, to the European scene”.
