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Friday, January 20, 2017

Primary Surplus 2016: Ministry of Finance vs. Bank of Greece

If the numbers below are too small to read, one has to follow this link.


The above is the preliminary budget execution bulletin for 2016, as published by the Ministry of Finance. Whenever there is a table with many numbers, the first questions are: Where is the bottom line? Where are the numbers that matter?

The bottom line is the second line from the bottom where it says "State Budget Primary Balance". One has to hasten to add that this is NOT the (in)famous "primary balance" which is always cause for contestation between Greece and its creditors. It is "only" the primary balance of the "state", not of the "general government". The figures for the general government have not yet been published (they include, in addition to the state, local governments, social security funds and other non-consolidated items). For 2016, it can be expected that the "general government" will look even better than the "state" alone.

The bottom line says that the "state" recorded a primary surplus of 4,4 BEUR in 2016. In the previous year, in 2015, the equivalent number was 2,2 BEUR. The target for 2016 had been a primary surplus of 2,0 BEUR.

In short: the Greek state doubled its primary surplus from 2015 to 2016! And it exceeded the target by 1,2 BEUR!

Assuming a GDP of about 180 BEUR, the state's primary surplus represented 2,4% in 2016. The percentage for the general government can be expected to be even higher.

All of this would be fine and dandy if the Bank of Greece had not come out with the following press release on January 19, 2017 (i. e. yesterday):

"In January-December 2016, the central government cash balance recorded a deficit of €3,569 million, compared to a deficit of €3,359 million in the same period in 2015. During this period, ordinary budget revenue amounted to €48,941 million, compared to €45,607 million in the corresponding period of last year. Revenue of €43 million regarding Securities Markets Programme (SMP) income transfers from the Bank of Greece is excluded. Ordinary budget expenditure, including expenditure of about €3,850 million for the repayment of arrears, amounted to €51,143 million, from €48,043 million in January-December 2015."

Here is the table published by the Bank of Greece which shows a primary surplus in the state budget for 2016 of 1.948 MEUR, compared with a comparative figure for 2015 of 3.490 MEUR.

I am sure that there are convincing explanations why there is, in actual fact, no discrepancy between the figures, only between reporting formats but it would certainly be helpful to be informed about what these discrepancies/explanations are.

22 comments:

  1. Hi Mr. Kastner,

    As i am bad with these balance sheets,so in general 2016 we will result in having a surplus higher than that which was budgeted.

    One question. The government owes about 7 billion euros to the private sector. When Samaras had brought this value down to 1 billion euros. Are these 7 billion euros accounted for as debt somewhere in the above report?

    Sincerely,
    V

    ReplyDelete
    Replies
    1. I suggest you follow the link to the Ministry of Finance. Somewhere in there, I am sure, are details about the arrears but from what I could determine, arrears have been brought down during 2016. Report back to us when you have found the answers...

      Delete
  2. If I would be the head at the State Bank of Greece or their chief statistician I would prepare to emigrate.
    Urs

    ReplyDelete
    Replies
    1. If you were the head of the central bank, I imagine that all of Greece would prepare to emigrate.

      Delete
    2. ROFL!!!

      Thanks. You guys made my day.

      Sincerely,
      V

      Delete
    3. Quote: "If you were the head of the central bank, I imagine that all of Greece would prepare to emigrate."

      Why should they? The head of the State Bank of Greece has no power.
      Urs

      Delete
  3. https://twitter.com/paulmasonnews/status/822149578694807552

    The German elite is getting ready to enforce Grexit in July.

    ReplyDelete
    Replies
    1. Relax, that’s just Paul Mason.
      Urs

      Delete
    2. And of course, he is wrong because he is a known Leftist. I do admire the organised stupidity of people in the financial services. it almost reaches the heights of idiots in politics.

      Delete
    3. @Anonymous at 11:17 PM
      1. I do no think that Paul Mason has deeper insights into the minds of "the German elite".
      2. On 1st. of August we will see whose stupidity "reaches the heights of idiots in politics."
      Urs

      Delete
    4. It has nothing to do with insights. I presume that he has access to leaked information -- which you and I do not have access to. Giving specific information does not suggest any insights at all: insights are formulated, as I also do, along the lines of "it is likely that ... within the next few years". Very different indeed.

      Delete
    5. @Anonymous at 8:29 PM:
      Quote: "It has nothing to do with insights. I presume that he has access to leaked information -- which you and I do not have access to."

      And then he uses these precious leaked information for a twitter tweet? ROTFL come on.
      Urs

      Delete
  4. The BOG is useless. Therefore the only numbers that count are from the Ministry of Finance.



    ReplyDelete
  5. Greek state budget recorded a primary surplus of 4.392 billion euros in 2016, surpassing a primary surplus of 2.270 billion in 2015 and a budget target for surplus of 1.983 billion euros, the Finance ministry said on Tuesday. Regular budget net revenue surpassed budget targets by 1.8 billion euros in the 12-month period, while Public Investment program spending totaled 2.8 billion euros in December, a significant increase compared with previous months. In December, tax returns surpassed targets by 180 million euros, money channeled to the real economy. (source: ana-mpa) - See more at: http://greece.greekreporter.com/2017/01/17/greek-budget-records-primary-surplus-of-4-392-bln-euros-in-2016/#sthash.MR54YI94.dpuf

    ReplyDelete
    Replies
    1. It seems to me that I had reported about this above. Or am I missing something?

      Delete
    2. You are missing that part of introducing nonsense so that you could spread false doubt and controversy.

      Delete
    3. I think if you could spread understandable comments, it would make it easier for others to understand them.

      Delete
  6. Statistics in Greece has long been back to the bad old days, every ministry make their own. I have worked for a company like that, all divisions had huge profits and the consolidated was a minus.

    ReplyDelete
    Replies
    1. Yes, this thing about individual divisions all being much more profitable than the whole is quite a common characteristic of corporate life!

      Delete
    2. Not everywhere. Whether in private, public or governance having such deviation, is attributed only to incompetence. If managed properly and budgeting is made properly the bottom line in the total should have no deviation of more than +/-0,5%. + is always welcomed if much more.

      Sincerely,
      V.

      Delete
  7. And after a year of la la economic reporting the divisions start calling in their preliminary la la economic reporting. Tourism first, because accounting (BoG) force their hand, a round billion less in revenue than 2015. I have a bad gut feeling, and we wont know all of it before mid 2017 where we will be at a new slimy slippery slope. Klaus, Although some of your inputs are a bit above my head and patience, they do not comfort me.
    Lennard.

    ReplyDelete
  8. @Lennard
    You have got it all wrong. Greece always succeed, she just change the objective. The head of SETE, Andreas Andreadis, this week said that Greek tourism outperformed in 2016, there were more tourists than ever. He further said that the election of Trump would make 2017 even better? He was strongly cheered by the tourist ministry. This is numbers, you can not say it is not true.

    ReplyDelete