Greece posts central government surplus in 2013, inches toward key target

January 14, 2014 1:49 PM

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Greece posts central government surplus in 2013, inches toward key target

ATHENS (Reuters) - Greece posted a budget surplus at the central government level in 2013 before debt servicing costs, moving closer to hitting a key surplus target that will open the way for debt relief from its international creditors.

Greece, which has been bailed out twice, has been promised it will be eligible for more debt relief from its euro zone and International Monetary Fund lenders after turning around its finances to post a primary surplus for a full year.

The lenders track the general government surplus - which includes local government budgets and pension funds - rather than the central government surplus of 691 million euros reported on Tuesday, but that data indicates Greece is on track to meet the broader target.

"The budget execution confirms and reinforces our estimates for the year that ended," Deputy Finance Minister Christos Staikouras told reporters. "After many years and enormous sacrifices by the Greek people, the country will achieve a primary surplus this year."

After nearly going bankrupt and almost crashing out of the euro zone in 2012, Greece has been buoyed by more positive economic news in recent months including a bumper season for tourism and progress in bringing its finances back on track.

Inspectors from the EU and IMF are due to return to Athens this month to check on Greece's progress on meeting bailout targets. But the two sides are at odds over the size of budget savings required to meet this year's fiscal targets.

Finance Minister Yannis Stournaras has acknowledged it will be difficult to conclude the review by the time euro zone finance ministers meet on January 27. The review has been interrupted twice since September.

"The latest review may have been delayed, but is delayed because it is difficult and because we will not consent to policies which could be carried out in a milder manner," Stournaras told Greek TV late on Monday. But he said a delay was not necessarily bad because it would allow Greece to include data from December in discussions with lenders.

The government expects to reach a 2013 primary surplus of 812 million euros (£675 million), or 0.4 percent of gross domestic product (GDP), at the general government level. It aims to increase it to 1.6 percent of GDP this year.

Central government budget data provide an approximate indication of how the country's finances are shaping up but are not directly comparable with bailout targets.

The central government budget figures are also on a cash basis, whereas those against which Greece's performance is judged will be based on an accrual basis, which classifies revenues and expenses under a different methodology.

The government projects a return to growth next year, with the economy expanding by 0.6 percent after a six-year recession that has shrunk national output by a quarter and left more than one in four Greeks jobless.

(Reporting by Lefteris Papadimas and George Georgiopoulos, editing by Mark Heinrich)


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