Strong primary surplus 1.86% of GDP for 2023 against a target of 1.15% announced ELSTAT, confirming the information of “H” and what the central banker Giannis Stournaras had said at the 9th Economic Forum of Delphi the other day.
As announced by the Hellenic Statistical Authority, the primary result of general government for 2023 amounted to 1.86% of GDPagainst a target of 1.15% of GDP that was included in its Advisory Report Budget.
It is recalled that on Friday, April 12, G. Stournaras, speaking at the 9th Economic Forum of Delphi, revealed that “we had a very good fiscal result, a positive surprise. The primary surplus, instead of 1% of GDP in 2023, was finally close to 2%”, said the Governor at the time, while “H” transmitted information, on the same day and also to the “Pulse of the Delphi Forum” the next day, that the final surplus will be close to 1.7% to 1.8%.
Where is the surprise surplus due to?
As reported by the Ministry of National Economy and Finance, in relation to the objectives of the 2024 Budget, the following was observed:
- excess of net tax revenue of 292 million euros the last quarter of 2023 and
- amounting to 647 million euros in the period January-February 2024which are fiscally recorded in the year 2023, while
- was observed cost containment of the general Government bodies amounting to 602 million euros.
In total, the excess exceeds 1 billion euros. “The resilience of the Greek economy and the stable fiscal policy led to the achievement of the fiscal targets for the year 2023. This positive result proves the dynamics of the Greek economy, but also the gradual benefits from the reduction of tax evasion“, comments the Ministry of Finance.
It is indicative that in the months of January and February 2024, 397 million euros out of the 647 million euros that exceeded the targets, came from the payment of corporate income tax.
What does it mean for the Greek economy?
Exceeding the primary surplus target is reflected in 4 areas:
- First, in the faster reduction of the public debt. Based on the above result, the Debt to GDP ratio decreased from 172.7% in 2022 to 161.9% in 2023.
- Second, in creating a better starting point for achieving the 2024 fiscal targetsdespite the international turmoil and the slowdown in international and European growth rates,
- Third, in creating more flexibility regarding the country’s 4-year fiscal planning due to debt containment.
- Fourth, this result sends a strong signal to international markets that the Greek economy is strengthening and growing beyond the targets, despite the difficulties and extraordinary events faced by the country (natural disasters, international crises, dual national elections, etc.) in the previous year.
The fiscal impact of bank support
According to ELSTAT, from 2020 to 2023 the public expenditure for the support of financial institutions was greater than the related income and ranged from 0.2% to 0.45% of GDP per year.
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