Greece to miss budget deficit target

Greece will miss its budget deficit target this year, the government and its international lenders said yesterday, but there was disagreement over how big the fiscal derailment will be.

The actual 2011 budget deficit will be at least 8.6% of GDP, compared to a target of 7.6%, a source close to the situation told Reuters. The Greek government, by contrast, estimates the deficit overshoot will be smaller, at about 8.1% to 8.2%. The failure to hit the target is being blamed on the deeper-than-expected recession which has hit the country. EU and IMF inspectors visiting Athens feel Greece is not pursuing reforms vigorously enough, while Greek officials say the main reason for the overshoot is a worse-than-expected, austerity-induced recession. The source said inspector...