In nominal terms, the general government deficit was lower by 49% compared to the same period last year, when it stood at EUR 363m or 3.9% of GDP.

What contributed the most to the lower deficit were higher revenues by the state. These were up by 7.4% compared to the first quarter of 2016 to almost EUR 4.29bn.

This is the highest annual growth of revenues at the quarterly level since 2008, which was fuelled primarily by an increase in tax revenue and social security contributions.

Social security contributions were up by 10.3% to EUR 1.54bn, while income and property taxes and taxes on products were up at the annual level by 7.4% to EUR 767m and by EUR 1.28bn to 4.3%, respectively.

The Statistics Office noted that revenue from the EU funds remained low and that they were still decreasing, albeit not as much as in the previous four quarters. In comparison to the first quarter of 2016, these revenues were down by 15.2%.

After five quarters of decline, total expenditure by the state was higher in the first quarter of 2017 at the annual level.

Compared to the first quarter last year, total expenditure was up by 2.7% to EUR 4.47bn, which is still considerably lower than the growth of revenues in the same period.

Expenditure for employees and social security compensations increased the most, by 3.2% to EUR 1.17bn and by 2.8% to EUR 1.81bn, respectively. Expenditure for intermediate consumption was also up, by 2.3% to EUR 617m.

On the other hand, the state continues to decrease expenditure for gross investments into fixed assets, which was down by 8.2% compared to the first quarter of last year to EUR 263m. This is a considerably lower drop than in the first quarter of 2016 (-31%).

Expenditure for interest were also down, by 1.2% to EUR 313m. The state recently carried out a number of swaps of dollar bonds for euro bonds, somewhat decreasing the load of repayment of interest, statisticians said.

The general government debt at the end of the first quarter stood at EUR 32.85bn or 81.4% of GDP, which is EUR 1.17bn more than at the end of 2016.

The bulk of the increase is related to borrowing by the state, which carried out two bond issues in the first quarter.

This increases the general government debt in the short run, while it is expected to decrease to EUR 32.05bn or 77% by the end of the year, as the state wrapped up long-term borrowing for this year in May, the office noted.