Greece is on track to meet its target of reducing the deficit this year, Finance Minister George Papaconstantinou said yesterday, dismissing any talk of his country defaulting on its debt as “ridiculous.”

Papaconstantinou said data being published in the next few days shows Greece’s deficit has fallen 40 per cent in the first five months of 2010.

Greece’s estimated budget gap stood at 13.6 per cent of gross domestic product in 2009, and the government has pledged to reduce it to 8.1 per cent by the end of 2010.

“We are on target,” Papaconstantinou told reporters, adding the reduction was achieved by increasing revenue by more than eight per cent and cutting government spending by more than 10 per cent.

Greece has been in recession for more than a year. First quarter figures by the statistical service yesterday showed output continued to shrink in the January-March period, dropping one per cent compared to the previous quarter. On the year, the contraction was 2.5 per cent of gross domestic product.

Greece’s government debt woes have sparked a continentwide debt crisis and caused the euro to sink.