For the first time in six years, the difference between government revenue and expenditure was positive in 2006. The surplus was 3.0 billion euro. The EMU balance was 0.6 percent of the Gross Domestic Product (GDP). In 2005, there was still a small deficit of 0.3 percent. The national debt declined substantially as a result of the surplus and the sale of government shares. The EMU debt-to-GDP ratio fell from 52.7 percent in 2005 to 48.7 percent in 2006, according to the first estimates provided by Statistics Netherlands.
Ample government surplus
Central government mainly accounts for the 3.0 billion euro surplus. Central government revenue exceeded expenditure by 4.8 billion euro. Due to the improving economy, tax revenues were substantially higher than in 2005. Revenues from natural gas sales also increased significantly. Other parts of central government realised a 0.2 billion euro surplus.
Local government and social funds had a deficit, although the local government deficit of 0.2 billion euro was the lowest in six years. In 2005, local government still faced a 1.0 billion euro deficit. Municipalities and water boards also faced a deficit, just like in the preceding years. Provinces, on the other hand, again had a surplus. Social funds had a large deficit of 1.8 billion euro.
National debt markedly down
The national or EMU debt stood at 48.7 percent of the GDP last year. In 1993, the debt-to-GDP ratio peaked at 78.5 percent. Subsequently, it dropped to 50.5 percent in 2002 and then rose again marginally to 52.7 percent in 2005. The EMU public debt ceiling is set at 60 percent.
The national debt declined in 2006 by over 9 billion euro to 257.0 billion euro. Due to the surplus realised at central government level and revenues from the sale of shares (KPN and TNT), public loans issued by the government could be reduced and a larger proportion of public debt could be paid off. The bonded debt decreased by nearly 5 billion euro. The outstanding amount of short-term debt paper decreased considerably by more than 4 billion euro.
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