GPA: Smaller deficit reduction, risk of continuing pandemic

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By Tasos Dasopoulos

The Parliamentary Budget Office points out in its opinion the smallest fiscal adjustment by 1.32 billion euros in relation to the draft recorded in the final draft budget for 2022 and the risks arising from the continuation of the pandemic.

As it is pointed out, the implementation of the projected fiscal figures contains significant uncertainties stemming from the alarming development of the pandemic (with our country remaining in the worst European positions in terms of health effects and the course of vaccinations), the possible caused the pandemic, the degree of ability of taxpayers to meet their obligations and, finally, the possibility of a change in monetary policy due to inflationary pressures.

Regarding the budget forecasts, the Parliamentary Budget Office notes that they are marginal with the exception of the growth revision from 6.1% in the draft to 6.9% for 2021, while the forecast for 2022 has remained unchanged at 4.5%. In terms of budgetary data, for 2022 an increase of revenues compared to 2021 by 5 billion euros (compared to 4.6 billion euros in the Preliminary Draft) and a decrease of expenditures by 4.65 billion euros (compared to 6, EUR 35 billion in the Preliminary Draft).

As a result, the extent of the 2022 fiscal adjustment (in ESA terms) is reduced by € 1.36 billion to € 9.66 billion (5.7% of GDP) compared to € 10.98 billion (6.3%) of the Preliminary Draft, and the primary result of 2022 (always in ESA terms) is expected to be in deficit of 2.68 billion euros (1.4% of GDP) against 2.03 billion euros (1.1% of GDP) provided for in the Preliminary Draft Budget.

The full classification of public expenditure in terms of programs and functional classification (COFOG) described in Chapter 2 of the report is also a useful tool for discussing the budget.

It also considers a positive development the completion of the presentation of the performance of the Budget for the year 2022 for all the Bodies of the Central Administration. This is because it will help in the coming years to formulate new rules for voting, implementation, monitoring, management and control of the Budget in order to monitor and evaluate on the basis of their performance the actions and programs financed from public funds.

In addition, the gradual integration of the environmental dimension into the Budget will help to reflect the environmental footprint of public policy programs and actions.

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Source From: Capital

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