Central government cash deficit substantially improved in August

According to data released by BoG, central government cash deficit (i.e. net balance of the state budget including movements in public debt management accounts) stood at €6.4bn in the first eight months of the year from €18.6bn last year, down 65.8% y-o-y, while August recorded a surplus of €0.8bn from deficit of €3.6bn last year.

During Jan – Aug ‘12, ordinary budget revenues eased 1.6% y-o-y to €30.6bn, while August revenues soared by 21.4% y-o-y to €4.6bn. Expenditure retreated 23.0% y-o-y to €36.8bn, with August expenditure at €4.2bn, down 39.6% y-o-y. Furthermore, interest payments slipped 52.6% y-o-y to €6.0bn.

It is noteworthy that primary deficit of the state budget stood at just €0.3bn in 8M’12, down 92.3% y-o-y, with August primary balance recording a surplus of €1.75bn from deficit of €35m last year.

Although BoG figures are not comparable with those of MoF, I anticipate that they predispose a further positive evolution of budget execution in 8M’12, particularly on the revenue front.

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