General government primary cash surplus at €434m in 2012

MoF data show that general government primary cash balance recorded a surplus of €434m from deficit of €3,499m in 2011. According to MoF, reported figure is on a non consolidated basis and consolidated primary balance is expected to be smaller by €538m. Furthermore, general government cash deficit narrowed by 39.3% y-o-y to €12,531m in 2012 from €20,646m last year, outperforming target of €14,949m by €2,418m or 16.2%.

It is noteworthy that even including the incremental general government arrears of €1.7bn, 2012 adjusted cash deficit is €0.7bn better than target.

Current period data incorporate:

  • A drop of state budget deficit by 31.0% y-o-y to €15,934m from €23,090m last year with primary deficit shrinking 45.0% to €3,711m from €6,742m in 2011.
  • Extrabudgetary funds’ (i.e. legal entities) surplus of €2,703m up 8.5% y-o-y.
  • Local governments’ surplus of €502m down 31.2% y-o-y.
  • Social security funds’ surplus of €198m from deficit of €779m in 2011.

Released data imply a m-o-m deterioration of general government balance, which recorded a deficit of €2,875m in December from €273m in November compared to surplus in each of the past three months (Oct: €306m, Sep: €200m, Aug: €720m). Furthermore, primary balance turned negative in December showing a deficit of €1,880m from surplus of €2m in November and €1,063m in October.

December bottom-line (deficit of €2,875m) reflects a negative contribution (i.e. deficit) from state budget (€4,148m) and – to a lesser extent – social security funds (€518m) more than offsetting extrabudgetary funds’ and local governments’ surpluses of €1,484m and €307m respectively.

MoF also disclosed the general government arrears (> 90 days), including tax refunds, which rose by €1,701m or 24.0% y-t-d to €8,774m at the end of December. More importantly, arrears which had peaked to €9,545m in October, eased thereafter to €9,467m in November and €8,774m in December.

The bulk of general government arrears stems from social security funds (€4.4bn – 51% of total) and hospitals (€1.8bn – 20%), while local authorities’ arrears stand at €0.95bn (10.8%), state budget arrears at €0.52bn (6%), tax refunds at €0.72bn (8.2%) and other legal entities’ arrears at €0.37bn (4.3%).

It is pointed out that MoF targets to repay arrears of €3.5bn in Q1’13, while Alternate FinMin Christos Staikouras has recently stated that requests for arrears’ payment of €1bn have already been completed and total requests for arrears’ payments of €3bn are expected to be completed by the end of February.

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