Greek deficit projected at 8.5 percent of GDP

ATHENS, Greece (AP) ? Greece's Finance Ministry said the Cabinet has approved Greece's draft budget for next year, and that the country's deficit this year is expected to reach 8.5 percent of gross domestic product.

The ministry's announcement Sunday said this year's deficit was expected to stand at euro18.69 billion ($25.2 billion), higher than the targeted euro17.1 billion ($23.1 billion) which would have been 7.8 percent of GDP.

It said the missed target was due to a deeper than expected recession, with the economy contracting by 5.5 percent instead of the 3.8 percent estimate made in May. It implied the deficit could even exceed this level by the end of the year unless all new austerity measures were implemented.

The Cabinet met Sunday night to approve the 2012 budget and complete a plan to cut civil service staff by 30,000 by the end of the year.

Associated Press

Source: http://hosted2.ap.org/APDEFAULT/f70471f764144b2fab526d39972d37b3/Article_2011-10-02-EU-Greece-Financial-Crisis/id-bedff653fe3b4ffeb37edf692f73cddb

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