Greece's 2010 budget deficit will be revised to above 10 per cent of GDP, requiring corrective measures to stem spillover effects, a source close to the country's international lenders said today.
The government's latest official estimate of last year's deficit was 9.4 per cent, while its lenders - the 'troika' of European Commission, IMF and ECB - saw it at 9.6 per cent. The initial target was about 8 per cent of GDP.
"It is clearly above 10 per cent," the official close to the troika said after Athens discussed the figure with its lenders during an inspection visit this week.
Greece's statistics office ELSTAT sent data to its EU counterpart Eurostat last week, and discussions are ongoing about the exact number, officials said. Eurostat is due to publish its estimate on April 26th.
"Whether the final number is 10.2, 10.5 or anywhere close to that, in any case, this will require action because of spillover effects," the official said.
Asked about reports that the deficit could range between 10.4 and 10.7 per cent of GDP, the source close to the troika said: "This is exactly where we stand now with ELSTAT, but the (finance) ministry believes it can be brought lower."
Finance minister George Papaconstantinou told Reuters on the sidelines of a conference in Italy on Friday that the deficit would be higher than originally estimated but he gave no new estimate.
Without citing sources, Greece's Kathimerini newspaper wrote over the weekend that last year's deficit may be revised to 10.6 per cent of GDP.
With its €230 billion economy in its third straight year of recession, generating revenue growth to further cut the deficit is proving difficult. The economy is expected to contract 3 per cent this year after a 4.5 per cent slump in 2010.
At the end of 2009, a much bigger revision of the deficit triggered the crisis that brought Greece close to bankruptcy and shook the whole euro zone, spilling over to Ireland and Portugal.
In October 2009, the new government estimated the 2009 deficit at 12.7 per cent of GDP, more than double the previous administration's estimate. It has since been revised to 15.4 per cent of GDP.
Reuters
