Painful Greek austerity bit into 2011 budget gap

Page last updated at 03:01 GMT, Monday, April 23, 2012 - 08:01 EST

Reuters UK:

A woman walks outside a National Bank of Greece branch in central Athens April 20, 2012.

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Athens managed a 1.2 percentage point fiscal improvement compared with 2010 but its primary budget balance - which excludes debt servicing costs - has yet to move into surplus as a deep economic slump continues.

Greece's economy is in its fifth year of recession and could contract by more than 4.8 percent this year. Unemployment is also a record high, hitting tax receipts and requiring more spending on jobless benefits.

"According to provisional data, the deficit of the general government, as measured under the excessive deficit procedure (EDP) is estimated at 19.6 billion euros or 9.1 percent of GDP," the statistics agency ELSTAT said on Monday.

Fiscal austerity measures including income and property tax increases, a rise in value-added tax rates and cuts in wages and pensions, has helped Athens shrink the budget gap from 15.6 percent of GDP in 2009.

Read the whole story: Reuters UK