General government surplus 1.8% of GDP in mid-2019

© Hollandse Hoogte
In the first six months of 2019, the Dutch government had nearly 14 billion euros more revenue than expenditure. This brought the government budget balance halfway through the year to 1.8 percent of GDP, measured from Q3 2018 to Q2 2019 inclusive. At that point, government debt stood at 50.9 percent of GDP, down from 52.4 percent at the end of 2018. Statistics Netherlands (CBS) report this on the basis of new figures on government revenue, expenditure and debt.

The surplus achieved in the first six months of 2019 is over 2 billion euros higher than the surplus over the entire year 2018. The 2020 Budget Memorandum assumes a surplus of 10.8 billion euros for the entire calendar year 2019, equivalent to 1.3 percent of GDP. The provisional financial figures as of mid-2019 exceed this amount by 3 billion euros. The general government balance over 2018 was equivalent to 1.5 percent of 2018.

Government budget balance in six-month periods, moving annual total (% of GDP)
JaarKwartaalBalanceEMU target
2008Q20.2-3.0
Q40.2-3.0
2009Q2-1.8-3.0
Q4-5.1-3.0
2 010Q2-5.6-3.0
Q4-5.2-3.0
2011Q2-4.7-3.0
Q4-4.4-3.0
2012Q2-4.0-3.0
Q4-3.9-3.0
2013Q2-3.3-3.0
Q4-2.9-3.0
2014Q2-2.9-3.0
Q4-2.2-3.0
2015Q2-2.0-3.0
Q4-2.0-3.0
2016Q2-1.1-3.0
Q40.0-3.0
2017Q20.9-3.0
Q41.3-3.0
2018Q21.8-3.0
Q41.5-3.0
2019Q21.8-3.0

Tax and social security burden further up

Relative to the first half of 2018, government revenues rose by 9 billion euros. This is an increase of more than 5 percent. The still-growing economy is pushing up state revenues from tax and social security contributions. An additional upward effect came from the raised low VAT rate and energy taxes. Reduced wage and income taxes curbed this increase slightly. At 38.6 percent, the tax and social security burden is now 0.3 percentage point higher than in 2018 and at its highest level since CBS started measuring the burden.

Expenditure growth mainly due to social benefits and care

During the first half of 2019, government expenditure rose by 6 billion euros and fell behind the rise in revenues as a result. The growth in expenditure was 3.6 percent year-on-year. Half of this increase – over 3 billion euros – was due to spending on social benefits, care and state pension (AOW) benefits in particular. On the other hand, spending on unemployment benefits declined. One-quarter of the increase was due to raised remuneration for government employees, in particular due to increased collectively agreed (CAO) wages for civil servants and teachers. Other important contributors to rising government expenditure during the first half of 2019 were investments and remittances to the EU.

Government revenue and expenditure in six-month periods, moving annual total (bn euros)
JaarKwartaalRevenueExpenditure
2008Q2272.4271.2
Q4280.3279.0
2009Q2274.4286.1
Q4265.5297.3
2010Q2269.0304.1
Q4272.4305.9
2011Q2275.0305.2
Q4275.5304.3
2012Q2278.5304.8
Q4279.7305.3
2013Q2285.2306.9
Q4287.9307.3
2014Q2288.9308.1
Q4292.7307.2
2 015Q2294.0307.9
Q4293.9307.8
2016Q2301.3308.9
Q4308.8308.7
2017Q2315.7309.4
Q4322.6313.3
2018Q2331.9318.1
Q4337.1325.5
2019Q2346.0331.4

Debt-to-GDP ratio down to 50.9 percent

Government debt came out at nearly 404 billion euros at the end of June 2019. This is 2 billion euros lower than at the end of 2018. The surplus of 14 billion euros was therefore not fully utilised for debt repayments. This was mainly due to the issuing of new national bonds to an amount of nearly 8 billion euros on balance in Q2 2019. The amounts accumulated by the State were mostly converted to currency deposits abroad. However, these amounts are available for further debt repayment over the remainder of 2019.
Government debt as a percentage of GDP declined by 1.5 percentage points to 50.9 percent of GDP. A minor proportion of this decline is due to debt repayment; a major factor was GDP growth (the denominator effect).

Debt ratio in six-month periods (% of GDP)
JaarKwartaalDebt-to-GDP ratioEMU target
2008Q243.860.0
Q454.760.0
2009Q256.660.0
Q456.860.0
2010Q259.260.0
Q459.260.0
2011Q260.460.0
Q461.760.0
2012Q263.960.0
Q466.260.0
2013Q268.260.0
Q467.760.0
2014Q268.560.0
Q467.860.0
2015Q266.760.0
Q464.660.0
2016Q263.260.0
Q461.960.0
2017Q258.860.0
Q456.960.0
2018Q253.960.0
Q452.460.0
2019Q250.960.0


The 2020 Budget Memorandum anticipates a debt level of 397 billion euros by the end of 2019, equivalent to 49.2 percent of GDP.
The general government balance and the gross debt ratio are important benchmarks for the country’s public finances. The Netherlands has complied with the 3-percent deficit criterion of the European Union since 2013; and it has complied with the European standard of fault of 60 percent since 2017.