National debt markedly down

01/04/2008 15:00

The national debt amounted to nearly 254 billion euro by the end of last year, 2 billion euro down on the end of 2006.
For the second consecutive year, the Dutch government recorded a budget surplus. According to the first estimates conducted by Statistics Netherlands,  the surplus was 2.2 billion euro in 2007 as against 2.7 billion euro in 2006. 

Government revenue higher due to wage tax

Government expenditure rose by 4.3 percent in 2007, government revenue by 4.1 percent. Wage tax proceeds rose by 6 billion euro and accounted for more than half of the government revenue increase. VAT proceeds rose by 3 billion euro. The increase in government expenditure was mainly caused by an increase in wage costs, public investment and health care and welfare.

The government received 1.8 billion euro in extra dividend from government participations in 2007. In accordance with European accounting standards, extra dividend payments cannot be recorded under revenues, but in compliance with Dutch budget guidelines, they can be used to cover extra expenses.

Increase municipal deficit

In 2007, central government had a surplus of 3.0 billion euro, 0.9 billion euro less than one year previously, but local government and social funds recorded a deficit. The balance of local government deteriorated from a surplus of 0.1 billion euro in 2006 to a deficit of 0.5 billion euro in 2007. With a deficit of 1.5 billion euro, municipal authorities were largely accountable for this development. Social funds showed a deficit of 0.3 billion euro, an improvement relative to 2006, when the deficit was 1.3 billion euro.

National debt way below European limit

The national debt was reduced further from 47.9 percent of the GDP in 2006 to 45.4 percent in 2007. The Dutch natioal debt as a percentage of the GDP is far below the maximum of 60 percent allowed by the EMU. In 1993, the debt-to-GDP ratio peaked with 78.5 percent. The per capita debt of the Netherlands is currently 15.5 thousand euro.

The national debt decreased by 2.0 billion euro last year due to a budget surplus of 2.2 billion euro. In 2007, participations were sold to the amount of nearly 3 billion euro. This action did not cause the debt to drop significantly, because the government lent more than 3 billion euro to third parties.

Long-term debts, e.g. public loans, decreased by 5.7 billion euro, whereas short-term debts increased by 3.7 billion euro.