Greece Exceeds Primary Surplus Target with €8.7 Billion Surplus in First Nine Months of 2024

This represents a substantial increase from the €5.99 billion surplus recorded during the same period in 2023, according to preliminary data released by the Ministry of Economy and Finance on Wednesday.

The state budget balance for this period also presented a notable turnaround, achieving a surplus of €1.57 billion. This is a marked improvement over the targeted deficit of €1.44 billion outlined in the 2024 Budget report, as well as the €397 million deficit recorded during the same period last year.

The Ministry attributed part of the surplus to higher-than-expected tax revenues, which exceeded targets by €647 million, though it noted that some of this difference is accounted for in the 2023 fiscal results. Despite factors such as delayed transfers to social security funds and military procurement expenses totaling €2.58 billion, which did not affect fiscal calculations, the state still posted an overperformance of €216 million in its primary balance.

In a statement, the Ministry highlighted that the reported primary surplus refers solely to the Central Administration’s performance and does not include the broader fiscal activities of local governments and other public sector entities.

Tax and Revenue Performance

State budget net revenues for the nine-month period amounted to €50.91 billion, a slight decrease of €1.23 billion, or 2.36%, against the target. This shortfall was largely due to delays in funds from the Recovery and Resilience Facility (RRF) and a pending payment related to the concession of the Egnatia Motorway, both of which are expected to be received in the coming months.

Nevertheless, net revenues showed a significant overperformance of €3.61 billion, or 7.7%, compared to revised targets. This increase was primarily driven by higher tax revenues, which exceeded projections by €2.6 billion. The Ministry cited better-than-expected collections from income taxes and strong performance in current-year tax collections.

Tax refunds for the period also surpassed expectations, amounting to €5.47 billion, €533 million more than anticipated.

State Budget Expenditures

Total expenditures for January to September 2024 reached €49.33 billion, €4.25 billion below the target of €53.58 billion. However, this marked a €637 million increase compared to the same period in 2023, largely due to higher interest payments on government debt.

Ordinary budget payments were €3.58 billion lower than targeted, partially due to delayed transfers to social security funds and military procurement expenses. Increased spending was reported in areas such as interest payments and grants for emergency relief and health services.

Investment expenditures amounted to €7.24 billion, falling short of the target by €672 million.

Despite some fluctuations in expected revenues and expenditures, the Ministry’s data indicates that Greece’s fiscal position remains robust, with strong tax performance and controlled spending contributing to the surplus. The government is expected to adjust its fiscal targets for 2025, reflecting the latest economic realities.

(Source: Amna)