Higher government revenues reduce public deficit

Government revenues were nearly 7 bn euros higher in the first six months of 2016 than in the same period last year. Government expenditure hardly changed, according to Statistics Netherlands (CBS). By mid-2016, the public deficit was reduced further to 0.8 percent of the gross domestic product (GDP).

The target set by the European Union stipulates that, calculated over the entire calendar year, the public deficit should not exceed 3 percent of GDP. The deficit over 2015 was 1.9 percent. The Netherlands Bureau for Economic Policy Analysis (CPB) estimates a budget deficit of 1.1 percent for 2016.
Public debt stood at 437 bn euros (63.7 percent of GDP) in mid-2016, i.e. 1.4 percentage points below the level at the end of 2015. The debt-to-GDP ratio declined further towards the EU target of 60 percent of GDP.

Public deficit and public debt on an annual basis
Public deficit and public debt on an annual basis
 EMU criteriaPublic deficit (left-hand axisDebt-to-GDP ratio (right-hand axis)
2008 I 3-0.343.6
2008 II3-0.343.6
2008 III3-0.544.1
2008 IV3-0.254.8
2009 I30.957.7
2009 II32.156.8
2009 III33.757.3
2009 IV35.456.9
2010 I35.657.7
2010 II35.659.3
2010 III35.659.2
2010 IV3559.3
2011 I34.459.4
2011 II34.560.4
2011 III33.961
2011 IV34.361.6
2012 I34.262.5
2012 II3464
2012 III34.365.1
2012 IV33.966.4
2013 I3366.7
2013 II32.768.4
2013 III32.467.9
2013 IV32.467.7
2014 I3367.2
2014 II3368.6
2014 III32.768.1
2014 IV32.367.9
2015 I32.169.1
2015 II32.167
2015 III32.166.2
2015 IV31.965.1
2016 I31.664.8
2016 II30.863.7

Public revenues continue to rise

Government revenues amounted to 299 bn euros on an annual basis, i.e. nearly 7 bn euros more than in 2015, mainly due to higher revenues from social contributions. Revenues from corporate tax and VAT also rose, but natural gas revenues declined. Public spending was almost the same as last year, totalling 305 bn euros.

Public revenue and public expenditure on an annual basis
Public revenue and public expenditure on an annual basis
 Public revenuePublic expenditure
2008 I 267.4265.6
2008 II272.2270.2
2008 III276.8273.6
2008 IV279.8278.4
2009 I277.8283.3
2009 II273.1286
2009 III269.8292.7
2009 IV263.9297.5
2010 I264.1298.5
2010 II268.4303.2
2010 III268.4303.7
2010 IV272.6304.1
2011 I275.7303.8
2011 II274.2303.3
2011 III277.8302.9
2011 IV274.4302
2012 I275.2302.6
2012 II277.5303.1
2012 III276.2303.7
2012 IV278.8303.9
2013 I281.7301.3
2013 II284.1301.5
2013 III287302.4
2013 IV286.5302
2014 I286305.9
2014 II287.3306.9
2014 III288.3305.9
2014 IV291.2306.2
2015 I292.6306.4
2015 II291.6305.8
2015 III291.7305.6
2015 IV292.6305.4
2016 I293.8304.9
2016 II299.1305

Sale financial assets brings down public debt

Despite the deficit in the first half of 2016, the government achieved a public debt reduction by nearly 4 bn euros relative to the end of 2015. Debt was reduced by a return of 7 bn euros from transactions in financial assets, like the sale of ASR shares, revenues from termination of interest rate derivatives and public loan repayments. Revenues from transactions in financial assets do not affect the public deficit, but can be used for debt repayment.