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Greece seeks to reassure about poor revenue collection in July

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In response to claims by the main opposition that there is high risk the budget may get derailed following the cEUR315m revenue miss in July, govt sources sought to give a reassuring message about budget execution.

 

Note that sources from the Finance Ministry cautioned against extrapolating the July data to the rest of the year, while pointing out that ordinary revenue collection year-to-date remains cEUR420m ahead of the targeted amount.

 

This is despite cEUR220m higher-than-budgeted tax returns, pointing to a cEUR730m outperformance of underlying ordinary revenues before tax refunds.

 

In any case, the 2016 budget is tax-heavy, with revenue collection skewed to the second half (cEUR23bn expected in the remainder of the year vs. EUR21.7bn in the same period of 2015), which will determine the extent to which Greece will comply with program targets without having to resort to the automatic fiscal adjustment mechanism.

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