General government cash primary surplus at €967m in Q1’13 – Arrears dropped 8% m-o-m in March

MoF data show that general government (gg) primary cash balance recorded a surplus of €967m in Q1 ’13 from €2,382m in Q1’12 down 59.4% y-o-y. According to MoF, reported figure is on a non consolidated basis and consolidated primary balance is expected to be smaller by €825m.

Furthermore, general government cash surplus narrowed by 78.9% y-o-y to €982m in Q1 ’13 from €4,662m last year. The sharp drop is mainly attributed to last year’s one-off interest payments related to PSI. In particular, gg interest payments stood at €1,949m in Q1’13 from €7,045m in Q1’12.

Current period data incorporate:

  • State budget deficit of €2,638m in Q1’13 from €6,197m last year down 57.4%, with primary balance showing a deficit of €764m from surplus of €749m in Q1’12.
  • Extrabudgetary funds’ (i.e. legal entities) surplus of €79m in Q1’13 from €182m in the corresponding period last year.
  • Local governments’ surplus of €482m, up 29.2% y-o-y.
  • Social security funds’ surplus of €1,095m, up 11.8% from last year’s surplus of €979m.

Released data imply an improvement m-o-m of general government balance, which recorded a deficit of €1,054m in March from €1,453m in February, while primary balance remained flat m-o-m showing a deficit of €408m in March from €409m in February.

March bottom-line (deficit of €1,054m) reflects a negative contribution (i.e. deficit) from state budget (€1,631m) more than offsetting extrabudgetary funds, social security funds and local governments’ surpluses of €288m, €230m and €58m respectively.

MoF also disclosed the general government arrears (> 90 days), including tax refunds, which dropped by €713m or 8.0% m-o-m and by €670m or 7.6% y-t-d to €8,148m at the end of March from €8,861m at the end of February and €8,818m at the end of December. It is reminded that arrears had peaked to €9,545m in October easing thereafter until January ‘13.

The bulk of general government arrears stems from social security funds (€4.10bn – 50.3% of total) and hospitals (€1.90bn – 23.3%), while local authorities’ arrears stand at €1.04bn (12.8%), state budget arrears at €0.52bn (6.4%), extrabudgetary funds’ arrears at €0.34bn (4.2%) and tax refunds at €0.25bn (3.0%).

MoF also noted that payments of arrears to the private sector incl. tax refunds amounted to €2,225m over the Dec ’12 – Apr ’13 period with a material acceleration in the last two months. In particular, payments amounted to €199m in Dec, €334m in Jan and €198m in February significantly rising to €759m in March and €736m in April.

It is pointed that arrears to the private sector dropped by €1,319m over the Dec ’12 –Mar ’13 period, while the respective payments stood at €1,489m, implying that arrears of €170m were created over the same period.

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