The government deficit decreased to 1.0% both in the EA19 and the EU28 in 2017. Portugal presented the second largest deficit due to CGD's capitalization, and the third largest debt pile at EU level.
Government deficit and debt in the euro area (EA19) has decreased in comparison to 2016, having fallen from 1.6% in 2016 to 1.0% in the EA19, while in the EU28 it fell from 1.7% to 1.0%. Government debt to GDP ratio fell from 89.1% (end of 2016) to 86.8% (end of 2017) in the EA19, and in the EU28 it decreased from 83.3% to 81.6% in the same period.
Portugal, however, has shown the second largest deficit in the EU, mostly due to the impact of the capital injection to a Portuguese public bank’s, Caixa Geral de Depósitos (CGD), according to Eurostat.
According to the note from EU’s statistics office, government deficit in the euro area decreased from 1.6% in 2016 to 1.0% of the GDP last year, representing a slight deterioration in comparison to April’s estimates which had put government deficit at 0.9% of GDP in the eurozone.
At EU level (EU28) the government deficit decreased to 1.0%, representing a 0.7% fall in comparison to last year’s values.
The statistics also show that Portugal had the second largest budget deficit (3.0%) due to the impact of the capitalization. With CGD’s impact on the deficit, as ECO disclosed, the deficit was 5,709 million euros, of which almost 3,944 million euros concern CGD’s capital injection. Without that effect, the deficit stood at 1,765 million euros in 2017.
In 2017, Malta (3.5%), Cyprus (1.8%), Sweden (1.6%), Czech Republic (1.5%), Luxembourg (1.4%), The Netherlands (1.2%), Bulgary and Denmark (1.1%), Croatia (0.8%), Greece (0.8%), Lithuania (0.5%) and Slovenia (0.1%) all registered a budgetary surplus.
The lowest government deficits were registered in Ireland (-0.2%), Estonia (-0.4%), Latvia (-0.6%) and Finland (-0.7%).
Spain registered a deficit above Brussels’ targets (-3.1%), while Portugal was right on the edge, with -3.0%.