UPDATE 1-Greece narrows Jan-Nov budget gap by 40 pct y/y

Mon Dec 10, 2012 11:37am EST

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* Central govt budget gap narrows 40 pct y/y in Jan-Nov

* Figures exclude local authority and social security spending

ATHENS Dec 10 (Reuters) - Greece's central government budget deficit narrowed by 40 percent in the first 11 months of the year, the finance ministry said on Monday.

The figure for the Jan-Nov period, which excludes local authority and social security spending, fell to 12.9 billion euros from 21.5 billion in the same period last year.

"(The budget execution) was satisfactory, far exceeding estimates," Deputy Finance Minister Christos Staikouras said in a statement.

"This creates reasonable expectations for a good result in 2012, forming the basis for a primary surplus in 2013," he said.

Severe austerity imposed by the country's lenders as part of its bailout caused net revenue to slightly fall by 1.5 percent to 45.8 billion euros compared to the same period last year, despite a tax hike. The figure was in line with 2012 targets.

The central government budget figure excludes key elements of the general government budget, which is the one used by the European Union to assess Greece's fiscal performance under an EU/IMF bailout programme.

Athens aims to reduce this by 35 percent this year to 12.9 billion euros, or 6.6 percent of GDP.

In a bid to make up for revenue shortfall, the finance ministry has slashed investment by about a fifth, further hurting the economy.

It also cut back on primary spending, before interest service costs, by 9.6 percent, partly by suspending payments to government suppliers and state workers.

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