Government revenue rose faster than expenditure in the second quarter of 2010, according to preliminary data on the General Government accounts for the period April-June 2010.

Total revenue amounted to EUR 1,656.0 mln (EUR 1.7 bln), marking a 2.7% increase over the corresponding period of 2009. Total expenditure in the same period reached EUR 1,914.7 mln, recording a 1.2% increase.

The budget deficit therefore shrank to EUR 258.7 mln compared with EUR 280.0 mln in the second quarter of 2009. According to Ministry of Finance data, the consolidated central government budget deficit reached 6.44% of GDP in 2009 and the government aims to bring the deficit down in 2010.

Taxes on production and imports reached EUR 686.5 mln in the second quarter, recording a 1.3% increase. Of this, VAT was EUR 402.4 mln (0.1% increase) and taxes on income and wealth EUR 303.0 mln (17.1% decrease). Revenue from sales of goods and services increased by 3.6%.

On the expenditure side, compensation of employees reached EUR 621.1 mln, recording an increase of only 1.4%. Expenditure on social transfers was EUR 656.4 mln (7.3% increase) and current transfers reached EUR 213.7 mln (16.2% decrease). There was a contraction in capital formation (9.8% decrease) and intermediate consumption (6.1% decrease). The data are compiled in accordance to EU concepts and definitions.