According to the final data for 6M’12 budget execution released by MoF, revenues (excl. tax refunds) rebounded in June (up 3.0% y-o-y), after easing by 14.9% and 12.8% in the previous two months, bringing the 6-month figure down 4.4% y-o-y to €23.5bn. Nevertheless, 6M’12 revenues continued falling short of targets by €1.0bn or 4.1%, mainly reflecting lower-than-anticipated income tax revenues and transactions taxes, also attributed to the election period. Furthermore, primary expenditure continued heading south for fifth month in a row easing by 14.1% in June, following a drop of 16.6% in May and 12.5% in April, bringing the 6-month figure down 7.1% y-o-y to €23.8bn and beating 6-month target by €1.5bn or 5.9%.

Overall, 6-month budget deficit dropped 5.0% y-o-y – for the first time so far in 2012 – to €12.5bn in 6M’12. Note that bottom-line was supported by the significant positive contribution of Public Investment Budget (PIB), which exhibited a deficit of €0.5bn in 6M’12 from €1.4bn last year. Furthermore, 6-month reported figure materially bettered 6-month target by €2.4bn or 16.1%, a quite impressive performance providing a cushion for the fiscal adjustment efforts in the coming months.

Primary balance remained negative for fourth consecutive month with 6-month primary deficit at €3.3bn (down 45.8% y-o-y) significantly beating 6-month target by €1.95bn or 37.0% and implying a primary deficit of €1.0bn in June from €0.6bn in May and €1.4bn in April.