ATHENS (Reuters) - Greece expects its 2011 budget deficit will be smaller than expected at between 9.1 and 9.4 percent of GDP, thanks to an emergency property tax, a finance ministry official said on Friday, a development that could help Athens in its bailout talks with the EU and IMF.
Greece, which is racing to complete talks with the EU and the IMF on a second bailout worth 130 billion euros, had previously estimated that the deficit would be above 9.5 percent of GDP.
"The numbers aren't final yet but we believe the deficit will come in at between 9.1 and 9.4 percent (of GDP)," the official, who declined to be named, told Reuters.
The official said the smaller deficit was due mainly to the fact that Greece will raise about 2 billion euros from a controversial property tax the government imposed in September in a desperate move to plug fiscal gaps. That would beat a target of 1.7 billion euros.
A deficit of 9.1 to 9.4 percent of GDP would still be above initial EU/IMF targets but it might help Athens which, to secure the bailout, must persuade the European Union and the IMF - which have grown increasingly exasperated with its repeated failures to meet deficit and reform targets - that it will implement long-delayed reforms and slash spending further.
Another senior finance ministry official had said this week that the 2011 budget deficit would most likely be below 9.5 percent of GDP, but did not give more details.
(Reporting by Harry Papachristou; Editing by Susan Fenton)