Greece Will Make a Primary Surplus in 2013 as “Summer Season” Keeps its Promises

After beating significantly budget targets in Jan-July period with a a primary budget surplus of about 2.5 billion euros against an interim target for a deficit of 3.1 billion for the period, a report coming from Kathimerini suggests that August revenues give reason for gov’t hope to achieve a primary surplus in 2013.


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Budget revenues were up by about 120 million euros, or 11 percent, in the first 20 days of August, compared to the same period last year, giving the government cause for optimism.
As the monthly target is 3.9 billion euros, when 4.8 billion was collected in August 2012, ministers believe that at the same rate of collection the monthly target will be overshot by 300-400 million.
The encouraging signs this month are that income tax inflows are 50 percent higher than last year, taxes on deposit interest are up 41 percent, VAT is also up – mostly due to heightened activity in tourism – and car sales are markedly higher.


As a consequence, Greece should make a primary surplus in 2013 and will get at least a third aid program in 2014. We can also expect a debate on a potential haircut after the German election (September 22nd).