The achievement of a primary surplus of 0.1% of GDP in 2022, against a target for a primary deficit of 1.6% of GDP, changes the facts in the Greek economy and as estimated by the staff of the Ministry of Finance, this fact certifies the dynamics in an environment which is anything but favorable.

In fact, the data from the execution of the budget in the first 3 months of the year create serious expectations for 2023 as well, as at least reported by the financial staff and authoritative analysts. The figures, if of course there is no serious adverse development, will move higher than the forecasts included in the Stability Program submitted to the Commission.

In addition to the results so far, there are two more factors that allow for greater optimism.

1. The first has to do with the significant de-escalation of energy costs, which if continued will give additional points to growth and consequently to revenues.

2. The positive prospects for Greek tourism, based on the data of the first two months of the year, but also those related to the number of flights and reservations. It should be noted that the budget has been drawn up with the forecast that the revenues will be approximately the same as in 2019. According to EOT sources, it will be approximately 2 billion more than what was achieved in the record year for Greek tourism.

This year the threshold is around 0.7% for the amount of the primary surplus and in 2024 at 2%. As announced a few days ago by the Ministry of Finance, the data from the execution of the budget for the period January – March 2023, show a significant overshoot, against the target in almost all basic figures.

Tax revenues are significantly above target, expenditure appears reduced and therefore a primary surplus of 3.07 billion euros has been created, against a target for a surplus of just 28 million euros.

In part, this result, as reported by sources from the Ministry of Finance, has technical characteristics and will disappear over time, but there are also real data that allow optimism in the financial staff.

And what are they, at least according to Ministry of Finance officials?

1. The VAT appears in the 3 months increased compared to the target by 417 million or by 8%, while compared to last year the corresponding period is increased by 712 million or by 14%. Specifically, between January and March 2023, the total VAT revenue amounts to 5.610 billion euros, compared to 5.193 billion euros which was the target and 4.898 billion euros which was the VAT revenue last year.

2. The increase in income tax revenue by 13% against the target and by 17% compared to last year. The total amount collected in the 3 months was 4.137 billion euros, against a revenue target of 3.650 billion euros and realized revenues in the same period last year of 3.525 billion euros.

3. Tax revenues amounted to 13.682 billion euros, increased by 1.508 billion euros or 12.4% against the target included in the introductory report of the 2023 Budget.

4. State Budget expenditures for the period January – March 2023 amounted to 16.622 billion euros and are presented reduced by 542 million euros compared to the target of 17.164 billion euros, which has been included in the introductory report of the 2023 Budget, while are presented increased, in relation to the corresponding period of 2022, by 775 million euros, mainly due to the increased transfers of the regular budget by 1.006 billion euros.

Finally, it should be noted that there are revenues, such as those from Traffic Fees, the last two installments of income tax, which change the real picture somewhat, but not dramatically.