Greek 2010 budget deficit drops more than targeted

The Greek budget deficit narrowed more than targeted last year, mainly led by a drop in government spending.

Budget deficit of debt-stricken Greece decreased by 36.5 percent in 2010 against the government’s target of 33.2 percent, the finance ministry said on Monday.

The state budget deficit stood at 19.6 billion euros ($25.37 billion) compared with 30.87 billion euros ($40 billion) in 2009.

The government’s ordinary expenditure decreased by 9 percent year-on-year compared with the original target of 7.5 percent. Also, revenues increased by around 7 percent.

“The deficit reduction during the period of January-December 2010 is mainly due to the significant reduction of expenditures,” the ministry said.

Budget deficit accounted for 13.6 percent of gross domestic product (GDP) of Greece in 2009 and the nation was on the verge of bankruptcy in spring 2010.

In May 2010, the eurozone member secured 110 billion euro ($147 billion) package from the IMF and European partners after promising drastic austerity measures to reduce its debt.

Athens had committed to reduce its budget deficit to the EU limit of 3 percent of GDP by 2014 from 13.6 percent in 2009.

“State budget execution data indicate that Greece remains well within the targets of the Economic Policy Program agreed with the EU and the International Monetary Fund,” the ministry said.