Spending bonus of €500 mln
The consistent overshooting of tax revenue targets seen every month this year is now safely forecast to lead to a higher primary surplus in the 2024 budget compared to the target. That will allow the government to plan additional spending of around €500 million for the next year compared to the original target – after an agreement with Brussels.
According to Economy and Finance Ministry information, the primary surplus this year is predicted to close in the region of 2.4% of GDP, against a target of 2.1% of GDP, according to the April Stability Program.
In its spring forecasts the European Commission had already seen that the primary surplus this year would close at 2.3% of GDP. In any case, it will be another year in which targets will be exceeded. It is recalled that in 2023 the primary surplus finally came to 1.9% of GDP, as found by Eurostat in April, against a forecast in December 2023 in the budget for 1.1% of GDP.
This year’s outperformance can now be discounted with relative certainty, as tax revenues consistently exceed target. The period from January to July was €1.6 billion above target, though much of this will cover spending already foreseen in the Stability Program. The exact figures will be agreed with the Commission by the end of the month.
