By Tasos Dasopoulos
A positive surprise came at the “closing” of 2023 from ELSTAT, with the primary surplus reaching 1.9% of GDP, the fiscal deficit being 0.5% less than the official forecast and the debt registering the second largest decrease as a percentage of GDP within the EU.
In particular, the primary surplus last year reached 1.9% of GDP or 4.1 billion euros, exceeding by 0.8% of GDP (by 1.51 billion euros) the official budget forecast for a surplus of 1.1% of GDP, while the fiscal deficit was also significantly lower, which did not exceed 1.6% of GDP, against the target for a deficit of 2.1% of GDP.
With the fiscal data published by ELSTAT a little while ago for the three years 2021-2023, in addition to significantly exceeding the fiscal targets for the previous year, it becomes easier to achieve this year’s target of a primary surplus of 2.1% of GDP. Also, the significantly lower budget deficit makes it easier to achieve this year a deficit below 1.5% of GDP, which is the target for countries with high debt for countries like Greece.
The revenues of the General Government reached 107,835 million euros corresponding to 48.95% of the GDP and the expenses 111 343 corresponding to 50.34% of the GDP This is an example that the exceeding of the target for primary surplus resulted from the good revenue stream.
The second largest debt reduction within the EU
At the same time, based on the fiscal data published by Eurostat, Greece achieved the second largest debt reduction as a percentage of GDP (10.8%) within the EU after Portugal (13.3%).
In particular, debt as a percentage of GDP reached 161.9% against the official budget forecast for debt of 160.3% of GDP, mainly due to the lower average annual inflation that limited the growth of nominal GDP, but also the reduction of real GDP from 2.4% to 2%.
The debt was set at 172.7% in 2022 and at 195% in 2021, marginally lower than ELSTAT’s earlier forecasts. However, as an absolute size the debt of the General Government decreased after several 10 years by 100 million euros reaching 356.695 billion in 2023 from 356.796 billion euros at the end of 2022.
Finally, based on ELSTAT data, the cost to the public from all measures to support financial institutions reached 999 million euros for 2023 from 475 million at the end of 2022.
The average deficit in the Eurozone at 3.6% and the debt at 88.6% of GDP
At pan-European level, the fiscal deficit to GDP ratio decreased from 3.7% in 2022 to 3.6% in 2023 in the euro area, while in the EU as a whole it increased from 3.4% to 3.5%.
At the same time, the ratio of public debt to GDP decreased from 90.8% at the end of 2022 to 88.6% at the end of 2023 in the eurozone and in the EU from 83.4% to 81.7%.
A fiscal deficit was reported by most member states, except for Cyprus and Denmark (both +3.1%), Ireland (+1.7%) and Portugal (+1.2%).
The highest deficits were recorded in Italy (‑7.4%), Hungary (-6.7%) and Romania (‑6.6%), while eleven Member States had deficits higher than 3% of GDP.
Regarding debt, the lowest ratios to GDP were recorded in Estonia (19.6%), Bulgaria (23.1%), Luxembourg (25.7%), Denmark (29.3%), Sweden (31.2%) and Lithuania (38.3%).
Thirteen Member States had public debt ratios higher than 60% of GDP, with the highest recorded in Greece (161.9%), Italy (137.3%), France (110.6%), Spain ( 107.7%) and Belgium (105.2%).
