ATHENS: Greece's budget deficit last year shrank to 6 percent of national output from 9.5 percent in 2011, without including the impact of state support to keep banks afloat or wind them up, its statistics service ELSTAT said on Wednesday.
The deficit came in below a government target of 6.6 percent of gross domestic product (GDP) last year.
But including the impact of state support to banks, the budget gap widened to 19.4 billion euros or 10 percent of GDP, based on provisional estimates ELSTAT submitted to the European Union's statistics agency.
Greece's 190 billion euro economy is in its sixth year of recession and is expected to contract 4.5 percent this year as cuts in public sector pay and pensions and higher taxes continue to take a toll on consumption, its main driver.
The government expects the European Commission to focus on the deficit figure that excludes bank support in its review of fiscal performance.
"The country will be judged on the fiscal deficit figure excluding the support to banks," Deputy Finance Minister Christos Staikouras told reporters on Wednesday, before the figures were released.
ELSTAT said state support to banks added four percentage points or 7.73 billion euros to the fiscal hole last year, as a state bank rescue fund - the Hellenic Financial Stability Fund - covered the cost of winding up non-viable banks.
Greece's international lenders have set aside 50 billion euros from the country's bailout package to recapitalise its viable banks and cover the closure of others.
"In 2012 the general government, through the Hellenic Financial Stability Fund, made capital transfers of 8.43 billion euros as a result of bank closures," ELSTAT said.
The agency said last year's primary budget deficit, which excludes debt interest outlays, reached 5.0 percent of GDP. Athens is aiming for a primary budget surplus of 0.3 percent of GDP this year, based on a 2013-16 fiscal plan released in February.
ELSTAT said public debt last year fell to 303.9 billion euros or 156.9 percent of national output from 170.3 percent in 2011.
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