MoF preliminary data (on a modified cash basis) on Greek budget execution depicted a worse performance in December compared to that in November or October, attributed to seasonal (PIB) and one-off effects (debt buyback) along with a top-line pressure and a stall in cost cutting. Nevertheless, both 2012 budget deficit and primary deficit outperformed targets mainly due to the stronger fiscal performance particularly in the Aug-Oct period.
Revenues (excl. tax refunds) retained a negative trend for second consecutive month at an accelerating pace retreating by 14.5% y-o-y in December after falling 7.6% in November. As a result, 12-month figure eased 5.3% y-o-y (11M’12: -4.0%) to €51.4bn, in line with target. Tax refunds were contained at lower levels (-37.1% vs target of -30.2%) resulting in a relatively better performance of net revenues, which fell 4.1% y-o-y to €48.1bn.
After ten consecutive months of significant cost cutting, primary expenditure remained flat y-o-y in December, following a drop of 18.3% in November and 4.6% in October, bringing the 12-month figure down 8.6% y-o-y to €47.1bn, 0.9% better than target.
Interest payments retreated 25.2% y-o-y (vs target of 28.2%) to €12.2bn. It is noteworthy that December figure (€790m) was affected by the one-off cost of debt buyback, while almost half of 2012 interest payments (€6.1bn) was recorded in March and was related to the implementation of the PSI agreement. Overall, total expenditure dropped 12.3% y-o-y to €61.5bn slightly (0.6%) outperforming target.
2012 budget deficit narrowed by 30.1% y-o-y to €15.9bn (8.2% of GDP) from €22.8bn last year (10.9% of GDP), with December recording a deficit of €3.06bn from €0.59bn in November and surplus of €0.46bn in October. It should be pointed out that Public Investment Budget (PIB) had a (relative) negative impact on December bottom-line contributing a deficit of €1.85bn, while its y-t-d amount stood at just €0.67bn until 11M’12. Excluding PIB, 2012 budget would have dropped 33.0% compared to the reported 30.1%. Furthermore, 2012 reported figure (€15.9bn) bettered target by €0.4bn or 2.5%, mainly reflecting the stronger fiscal performance evident over the Aug-Oct period.
Primary balance remained negative in December recording a deficit of €2.27bn significantly worse than the figures reported in November and October (deficit of €0.3bn and surplus of €0.9bn respectively). Nevertheless, 2012 primary deficit narrowed 42.7% y-o-y to €3.68bn, corresponding to 1.9% of GDP from 3.1% last year, significantly beating target by €0.9bn or 19.5%.
Independent Insight Views 
Perhaps you could write a post one day explaining the difference between state and government budget; what the significance of that difference is; what numbers the Troika looks at and why; etc.
Also, I am always confused by the different numbers various Greek authorities publish about the same items. According to ELSTAT, for example, Greece is running a primary surplus already. Or: the export/import figures vary greatly between the BoG and ELSTAT.
Thanks in advance.
Thank you for your suggestion.
There is a big discussion on the topics you mentioned, yet the answers are not always clear, while the reconciliation among the different accounting standards is really a hard – if not impossible – task, especially for someone outside the public accounting offices.
From what I have seen up to now, the figures reported by MoF in the monthly budget execution bulletins, which are on a ‘modified cash basis’ and refer to the central government, match with the central government cash figures reported by BoG evry month as well as the central government figures reported by MoF in its general government monthly bulletin.
In any case, my effort is to provide a more insight on the trends of several budget lines, compared to targets, previous month, previous year etc regardless of: a) the accounting standards and b) the comparability of bottom-line relative to targets under other accounting standards. I hope that all relevant authorities will enrich sometime their reporting making our task less difficult.