ΒοG Chief Stournaras: State Budget to Record Primary Surplus of 3.5 pct of GDP in 2019

FILE - Bank of Greece Governor Yannis Stournaras gives a speech at the annual meeting of the bank's shareholders in Athens, on Monday, April 1, 2019. (AP Photo/Petros Giannakouris)

The Greek state budget will record a primary surplus of 3.5 pct of GDP this year, based on general government fiscal data for the first quarter of 2019, but it will be unable to exceed this goal if the current trend prevails during the rest of the year, Bank of Greece governor Yannis Stournaras said on Wednesday.

In comments to the Athens-Macedonian News Agency (ANA), the central governor said: “The first quarter figures reported by the General Accounting Office, which almost coincide with figures released by the Bank of Greece, showed that the state budget will not record a primary surplus in excess of a 3.5 pct goal for the year. This means that if the prevailing trend cannot be reversed for this year, there will be not be fiscal space for additional benefits beyond those included in the 2019 state budget”. He added that a nervous climate prevailing in the Greek state bond market in the last few days reflected, up to a point, the investors’ concern over fiscal developments in the country. He underlined that “not achieving the target for a 3.5 pct primary surplus could lead to the imposition of new measures, such as spending cuts and reducing the Public Investment Programme, which could have a negative impact on economic growth.”

The central bank envisages that the country’s GDP will grow by 1.9 pct this year, down from a 2.3 pct growth rate envisaged by the finance ministry. The central banker noted “there is no reason, for the time being, to revise this forecast”.

Stournaras added that: “I have strongly supported the need to lower the primary surplus target to 2.5 pct of GDP in order to boost the recovery of the Greek economy. However, any change in agreed goals should be made in agreement with the institutions”.

1 Comment

  1. This does not include interest on 326 billion euros ($365.49 billion) in three bailouts, the cost of running cities and towns, state enterprises, social security, some military expenditures and was built as well by delaying payments to people and individuals owed money by the state. It’s like saying if you make $50,000 a year and don’t pay any bills that you have a $50,000 primary surplus.

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