Sharp increase in public expenditure continues

05/10/2010 15:00

In the first half of 2010, public expenditure has risen by more than 7 billion euro relative to one year previously. Public revenue rose less rapidly by more than 3 billion euro. As a result, the public deficit over the past four quarters mounted up to approximately 35 billion euro or 6 percent of the GDP. 

Public revenue and expenditure (moving annual total)

Public revenue and expenditure (moving annual total)

Public expenditure 7 billion euro higher

Over the first six months of this year, public expenditure has grown compared to the same period last year. The government spent nearly 4 billion euro more on social benefits and provisions, in particular the Exceptional Medical Expenses Act (AWBZ) and basic care. European transfers were nearly 2 billion euro higher, because in 2009 discounts over prior years were paid. Wages of civil servants accounted for 1 billion of the growth of public expenditure.

Increase public revenue

Public revenue usually tallies with the gross domestic product (GDP). The GDP has grown over the past quarters. Public revenue increased by more than 3 billion euro in the first six months of 2010 relative to the same period last year.

Revenue from taxes and social contributions grew by 4.5 billion euro. Revenue from VAT, company tax and dividend tax were also marginally higher. Unlike in 2009, revenue from wage and income taxes levelled off . Revenue from social contributions rose by 2 billion euro. The growth of public revenue was largely counterbalanced by lower yields from interest and dividend and reduced natural gas revenues.

Public balance sheet, 2002-2010

Public balance sheet, 2002-2010

Public debt currently 6 percent of GDP

The public deficit over the past four quarters amounted to 6 percent of the GDP. The European ceiling was set at 3 percent. The mounting deficit caused public debt to grow to 366 billion euro over the first half of 2010, i.e. nearly 20 million up on the end of 2009. The debt-to-GDP ratio was 63.3 percent. The European debt level is not to exceed 60 percent of the GDP.

Public debt

Public debt

Léonard Haakman