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The pandemic boosted the deficit to € 1.06 billion in 2020

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The pandemic boosted the deficit to € 1.06 billion in 2020

The General Government deficit amounted to € 1.06 billion, corresponding to 5% of GDP, in 2020, compared to a surplus of € 326 million in 2019, reflecting the large impact of the pandemic on public finances.

The serious deterioration in the budget balance is mainly attributed to government measures to support income and the real economy, which have resulted in an increase in public spending of 11.5% on an annual basis.

According to preliminary results published today by the Statistical Service, total expenditures during the period January – December 2020 increased by € 1,029.5 million or by 11.5% and amounted to € 9,946.6 million compared to € 8,917.1 million in the corresponding period of 2019.

“It is noted that this significant increase in expenditure is due to expenditure in the context of support measures to address the effects of coronavirus on employment, which amounted to € 546.5 million,” said Cystat.

Moreover, social benefits increased by € 584.8 million (+ 19.3%) and amounted to € 3,619.0 million compared to € 3,034.2 million in 2019.

Staff salaries (including imputed social contributions and civil servants' pensions) increased by € 159.4 million (+ 5.8%) to € 2,892.1 million compared to € 2,732.7 million in 2019 .

The subsidies skyrocketed to € 508.1m and amounted to € 578.2m compared to € 70.1m in 2019, with Cystat explaining that the increase in this category is mainly attributed to business support measures due to of the coronavirus pandemic.

Current transfers increased by € 20.7 million (+ 3.7%) and amounted to € 571.8 million compared to € 551.1 million in 2019.

In addition, the capital account decreased by € 262.8 million (-26.4%) and was limited to € 734.2 million compared to € 997.0 million in 2019. This decrease is mainly due to other capital transfers. , which decreased by € 326.9 million (-72.0%) and were limited to € 127.1 million compared to € 454.0 million in 2019. On the contrary, fixed capital investments increased by € 64, 1 million (+ 11.8%) and amounted to € 607.1 million compared to € 543.0 million in 2019. Interest paid decreased by € 15.7 million (-3.1%) and were reduced to € 494.8 million compared to € 510.5 million in 2019.

Revenue -3.8%

At the same time, the total revenues of the general government, during the period January – December 2020 decreased by € 355.3 million (-3.8%) and were limited to € 8,887.7 million compared to € 9,243.0 million in the corresponding period of 2019.

Specifically, total taxes on production and imports recorded an annual decrease of 9% or by € 300.0 million and fell to € 3,029.1 million compared to € 3,329.1 million in 2019, of which net VAT revenues (after deducting refunds) decreased by € 165.4 million (-8.0%) and were limited to € 1,900.1 million compared to € 2,065.5 million in 2019.

Revenues from income tax and wealth decreased by € 31.7 million (-1.5%) and were limited to € 2,124.6 million compared to € 2,156.3 million in 2019.

Interest and dividends collected decreased by € 63.3 million (-29.7%) and were limited to € 150.0 million compared to € 213.3 million in 2019. Current transfers decreased by € 9.9 million (-4.2%) and were limited to € 225.9 million compared to € 235.8 million in 2019.

On the contrary, social contributions increased by € 25.8 million (+ 1.1%) and amounted to € 2,403.9 million compared to € 2,378.1 million in 2019. Revenues from services increased by € 13 , 4 million (+ 1.6%) and amounted to € 853.8 million compared to € 840.4 million in 2019. Capital transfers increased by € 10.4 million (+ 11.6%) and amounted to € 100.4 million compared to € 90.0 million in 2019.

Finally, Cysat notes that the increases in certain categories of expenditures and revenues are partly attributed to the implementation of the first phase of the General Health Plan from June 1, 2019 and its full implementation from June 1, 2020.

Source: www.philenews.com

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