Budget with a 6,5% deficit for 2012

According to the draft of the state budget which the government is submitting tomorrow, the deficit is closing at 8,1% of this year’s GDP, moving the target of 6,5% to the end of 2012.

According to reports, Venizelos agreed with the Troika that despite additional measures, the deficit will have to close at 8,1% (instead of 7,6% initially), because the GDP has decreased drastically due to higher recession than expected, and therefore will be larger as a percentage, although in absolute terms the deficit will not exceed the estimates (18-19 billion this year).

This data shows that the dramatic recession has negated sacrifices of 1 billion euros, since if the GDP had not dropped, the deficit would have been 7,6% with the new measures, with no need for additional ones.

Starting at 8,1% for the next year, the draft that will be presented by Venizelos to the cabinet on Sunday will be slightly adjusted to the new data and will be calculated at 2,0% -2,5% of the GDP for 2012. However, nothing seems able to stop the negative decline records, which have reached 7% in the second quarter of 2011 and are now looking at a possible10%. Thus, to reduce the deficit to 15 billion euro from about 18 billion this year, it will take almost twice the measures implemented so far and even greater sacrifices.