Yesterday’s final details of its execution budget the first quarter confirmed that the country’s fiscal course this year is much better than budget forecasts, having already provided primary surplus €2.443 billion against the original deficit target of €869 million.

Thus, the chances of its creation are now high. fiscal space at the end of the year, which the government can either distribute through support measures or use to increase the surplus and thus reduce debt more quickly. The European Commission, however, in its previous recommendations to Greece implicitly invited it to choose the second solution.

It is noted that government set a primary surplus target for this year of 0.7% of GDP, although it subsequently projected a surplus of 1.1% of GDP in the Stability Program.

OUR commission, again, in his spring forecasts he reported a surplus of 1.9% of GDP. If the latter holds true and the government sticks to the surplus target of 0.7% of GDP, then the difference of about 2.5 billion euros can be channeled into additional support measures. Some will be needed to cover the cost of the elections and some pre-election measures announced by the government that are applicable this year, such as the youth pass, while information indicates that the increase in health care costs has already occurred.

V Ministry of Finance, however, argue that it is too early to predict if there will be fiscal space and how big it will be. For now, the earnings trajectory seems to be in line with Stability programbut the final result will be judged by the figures of July-August, when the most tax revenues will be collected from income tax and tourism.

In any case, whether it decides to make a “Christmas present” or run a larger surplus, the government appears to have met the country’s financial targets and fit seamlessly into the new framework of the Stability Pact. which is likely to take effect from 2025. For 2024, growth in net primary spending will need to be capped at 2.6% year-on-year. What is within the framework of the Stability Program, according to sources in the Ministry of Finance.

In particular, according to the budget execution data, tax revenue in the first quarter was 17,803 million euros, an increase of 1,567 million euros or 9.7% compared to the target included in the 2023 budget report. Part of this The increase, amounting to approximately 470 million euros, relates to the extension of the deadline for payment of traffic fees until the end of February 2023, while it was expected that this amount would be collected during the month of December 2022. The remaining overpayment comes from the best performance of personal and corporate income taxes for the previous year, collected in installments until the end of February 2023, as well as from the best VAT performance of the current year.

In particular, for the main taxes of this category, the following are observed:

• VAT revenue of €7,574 million, an increase of €481 million compared to plan.

• EFC revenue was €2,032 million, down €80 million from plan.

• Real estate tax revenue of €353 million, €42 million less than planned.

• Income tax revenue of €4,991 million is €473 million above target.