Eurostat will decide on CGD’s impact on the deficit in September

  • ECO News
  • 20 July 2017

The Euro Area deficit decreased to 0.9% in the first quarter. In Portugal, the deficit stands at 0.5%, excluding the impact of CGD's recapitalization. Eurostat's decision will be made in September.

The Euro Area deficit decreased to 0.9% of GDP in the first quarter, according to Eurostat. The institute’s data about Portugal point to a 0.5% deficit, but that percentages does not include the impact of CGD’s recapitalization. Brussel’s Statistical office hopes to conclude their assessment in September.

In Portugal, according to Eurostat’s provisional data, the public deficit was 0.5% of GDP, below the homologous 1.6%, but more than the 0.7% registered in the last quarter of 2016. Eurostat highlights that the data on Portugal’s deficit for the first quarter of 2017 “does not include any impact of the recapitalization of Caixa Geral de Depósitos (CGD)”.

According to EU’s statistical office, “the recapitalisation of CGD is projected to amount to €4 874 million (€4 444 million occurred in the first quarter of 2017) of which €3 944 million were undertaken by the Portuguese State, amounting to 2.1% of projected annual GDP”. “Given the complexity of this operation, there is an ongoing exchange of information and dialogue between Statistics Portugal and the European Commission (Eurostat) regarding its recording in national accounts. This discussion is expected to be concluded in September 2017“, Eurostat states.

The 0.9% of GDP deficit in the Euro Area is comparable to the homologous 1.7% and the 1.1% from the last quarter of 2016. In all 28 EU Member States , the public deficit retreated to 1% of GDP, comparable to 2% from the homologous quarter and 1.2% between October and December of 2016.