Government finance statistics - quarterly data

Data extracted on 22 July 2021.

Planned article update: 22 October 2021.

Highlights


In the first quarter of 2021, the seasonally adjusted general government deficit to GDP ratio stood at 7.4 % in the euro area and 6.8 % in the EU. Deficits remain at a high level.

At the end of the first quarter of 2021, the government debt to GDP ratio in the euro area increased to 100.5 % - exceeding 100 % for the first time.

The highest ratios of government debt to GDP at the end of the first quarter of 2021 were recorded in Greece (209.3 %), Italy (160.0 %), Portugal (137.2 %), Cyprus (125.7 %), Spain (125.2 %), Belgium (118.6 %) and France (118.0 %).

EU and euro area quarterly net lending (+)/ net borrowing (-), % of GDP, seasonally adjusted data
Source: Eurostat (gov_10q_ggnfa)

In recent years, Eurostat has significantly expanded the range of integrated quarterly data on government finance statistics available, providing a timely and increasingly high quality picture of the evolution of government finances in the European Union (EU). The data presented in this article reflect both non-financial and financial (quarterly non-financial and financial accounts for general government transactions and cover all European Union (EU) countries as well as Iceland, Norway, Switzerland.

This article is based on data transmitted to Eurostat at the end of June 2021 and during July of 2021, and includes data coverage of the first quarter of 2021, and follow ESA 2010 methodology. It is supplemented by non-financial seasonally adjusted data estimated provided on a voluntary basis by EU and EFTA countries' National Statistical Institutes. Eurostat regularly publishes seasonally adjusted and calendar adjusted quarterly data on government revenue, expenditure and surplus (+)/ deficit (-), currently for twenty-two Member States, Switzerland and the EU aggregates.

In the first quarter of 2021, the seasonally adjusted general government deficit to GDP ratio stood at 7.4 % in the euro area and 6.8 % in the EU. While remaining at a high level, the deficit in the first quarter of 2021 decreased compared to the fourth quarter of 2020. The deficit to GDP ratio decreased due to lower expenditure, while revenue remained stable as a percentage of GDP. Total revenue and total expenditure continued to be influenced by policy responses to the COVID-19 pandemic. In the first quarter of 2021, most Member States continued to record a government deficit.


Full article


Quarterly non-financial accounts for general government

Government revenue and expenditure

Both total revenue and expenditure exhibit a clear seasonality. In order to interpret trends for the most recent quarters, seasonally adjusted data is presented in addition to the non-seasonally adjusted data transmitted by EU Member States (see explanation below).

In the first quarter of 2021, total government revenue in the euro area amounted to 46.6 % of GDP, unchanged compared to the fourth quarter of 2020. Seasonally adjusted total revenue in the euro area increased by around EUR 7 billion compared with the fourth quarter of 2020. Total government expenditure in the euro area stood at 54.0 % of GDP, a significant decrease in the ratio compared with 54.7 % in the previous quarter. Seasonally adjusted total government expenditure decreased by around EUR 11 billion compared with the fourth quarter of 2020.

In the EU, total government revenue was 46.3 % of GDP in the first quarter of 2021, unchanged compared to the fourth quarter of 2020. Total government expenditure in the EU was 53.1 % of GDP, a decrease compared with 53.9 % of GDP in the previous quarter.

Figure 2: Euro area total revenue and total expenditure, seasonally adjusted and non-adjusted data, billion euro
Source: Eurostat (gov_10q_ggnfa)


Figure 3: Euro area total revenue and total expenditure, seasonally adjusted and non-adjusted data, % of GDP
Source: Eurostat (gov_10q_ggnfa)

From the third quarter of 2010 onwards, a decreasing trend in the level of the total expenditure-to-GDP ratio was visible, reflecting an absolute decrease in total expenditure in some quarters as well as the effects of renewed economic growth in the EU and the euro area (all seasonally adjusted). In the fourth quarter of 2012 and in the second quarter of 2013, total expenditure increased slightly in both areas, influenced by interventions to support the banking sector in several Member States, notably in Spain in the fourth quarter of 2012 and in Greece in the second quarter of 2013. Supports for the banking sector in several Member States are also the main reason for the increase in the fourth quarter of 2015.

The decreasing trend in general government deficits was broken in the first quarter of 2020 when Member States began to introduce expenditure measures to mitigate the economic and social impact of the COVID-19 pandemic. Strong decreases in total revenue mainly due to declines in economic activity and tax cuts introduced by governments and increases in total expenditure are observed since this period. This change in trend was accelerated in the second quarter of 2020 when the measures fully came into effect in most Member States. In the the third quarter of 2020, government revenue and expenditure continued to be influenced by policy responses to the COVID-19 pandemic but less severely than in the previous quarter. In many Member States the economies opened up in the third quarter after having been in lock down. In the fourth quarter the reductions was reversed as the COVID-19 pandemic worsened and government measures to mitigate the impact of the pandemic had a stronger influence on total expenditure. In the first quarter of 2021, the deficits remained at a high level although generally lower than the fourth quarter of 2020; this was mainly driven by lower expenditure.

Table 1: EA-19 and EU-27 quarterly net lending (+)/ net borrowing (-), total expenditure and total revenue as a percentage of GDP, seasonally adjusted data
Source: Eurostat (gov_10q_ggnfa), seasonally adjusted data: Eurostat and National Statistical Institutes estimates


Table 2: Quarterly net lending (+)/ net borrowing (-) as a percentage of GDP, seasonally adjusted data
Source: Eurostat (gov_10q_ggnfa), seasonally adjusted data: National Statistical Institute estimates


Table 3: Quarterly net lending (+)/ net borrowing (-) by country, non-seasonally adjusted data
Source: Eurostat (gov_10q_ggnfa)

General government deficit

The difference between general government total revenue and total expenditure is known in ESA 2010 terminology as general government net lending (+)/ net borrowing (-) (ESA 2010 category B.9) and is usually referred to as government deficit (or surplus). This figure is an important indicator of the overall situation of government finances. It is usually expressed as a percentage of GDP.

In the first quarter of 2021, the seasonally adjusted general government deficit to GDP ratio stood at 7.4 % in the euro area and 6.8 % in the EU. This constitutes a decrease compared to the fourth quarter of 2020. Government deficits have been more volatile during the pandemic as a result of the varying responses to the COVID-19 pandemic. In the second quarter of 2020 the highest deficit in the euro area and the EU was recorded since the start of the time series when the deficit stood at 12.3 % in the euro area and 11.8 % in the EU.

In contrast, the lowest deficit to GDP ratio in the available time series occurred in the first quarter of 2018 in the euro area and in the second quarter of 2018 in the EU, when the deficit stood at 0.2 % of GDP for both areas.

Due to the economic and financial crisis, which started in 2008, government's deficits steadily deteriorated and reached 7.1 % of GDP (seasonally adjusted) and 6.6 % of GDP in the third quarter of 2010 for the euro area and the EU, respectively. The beginning of the consolidation of public finances which can be observed from the fourth quarter of 2010 onwards is due to a reduction in government expenditure as percentage of GDP, as well as continued growth in absolute revenue (seasonally adjusted absolute numbers), which outpaced the growth in GDP. From the fourth quarter of 2010 onwards, the seasonally adjusted general government deficit no longer exceeded 5 % of GDP, and remained below 3 % since the second quarter of 2013 for the EU and the fourth quarter of 2013 in the Euro area. However, from the first quarter of 2011 onwards, general government total expenditure (seasonally adjusted) resumed growth when measured in absolute terms in both the euro area and EU.

In the first quarter of 2021, most Member States continued to record a government deficit due to the policy responses to the COVID-19 pandemic.

Figure 4: EA-19 net lending, net borrowing, seasonally adjusted and non-adjusted data, % of GDP and billion euro
Source: Eurostat (gov_10q_ggnfa)


The main part of government revenues are taxes and social contributions. During economic downturns, tax revenue and social contribution revenue decrease even in the absence of fiscal policy changes as an automatic stabilizer. This is because the underlying tax bases decreases. In the second quarter of 2020, large decreases in the seasonally adjusted total government revenue were observed amounting to EUR 128 billion in the Euro area and 134 billion for the EU compared to the first quarter of 2020. However, in the third quarter seasonally adjusted government total revenue grew by EUR 104 billion in the Euro area (EUR 115 billion for the EU) compared to the second quarter of 2020. In the fourth quarter of 2020 and the first quarter of 2021 total seasonally adjusted revenue in the euro area continued to increase. This continued increase constitutes a sharp rebound compared to the second quarter, but total revenue has not reached the levels observed prior to the pandemic.

Figure 5: EU components of general government total revenue, billion euro
Source: Eurostat (gov_10q_ggnfa)


In the second quarter of 2020, all countries set up or expanded specific (expenditure) measures in order to mitigate the economic downturn caused by the COVID-19 pandemic. This, as well as an increased use of existing (social security) schemes explain the increase in seasonally adjusted total expenditure by around EUR 105 billion in the euro area (EUR 129 billion for the EU) compared with the first quarter of 2020. In the third quarter of 2020, seasonally adjusted total government expenditure decreased by EUR 30 billion (EUR 41 billion for the EU) compared to the second quarter of 2020 due to a lesser impact of COVID-19 policy measures as economies started opening up. This was however reversed in the fourth quarter of 2020 as expenditure increased again with EUR 62 billion for the Euro area and EUR 70 billion for the EU compared to the third quarter. In the first quarter of 2021 the seasonally adjusted total government expenditure decreased by EUR 12 billion in both the Euro area and the EU.

In Eurobase, seasonally adjusted and calendar day adjusted total revenue and total expenditure data of Member States and EFTA countries, which provide seasonally adjusted and calendar day adjusted data for total revenue, total expenditure and net lending (+)/ net borrowing (-) in addition to the non-seasonally adjusted data, is presented in full detail. This data is provided on a voluntary basis by the Member States' statistical authorities.

Figure 6: EU components of general government total expenditure, billion euro
Source: Eurostat (gov_10q_ggnfa)

Quarterly financial accounts for general government

Financial transactions - assets, liabilities and net financial transactions

The government financial accounts notably allow for an analysis of how governments finance their deficits or use their surpluses to either reduce their liabilities or acquire financial assets. They include data on financial transactions (net acquisition of financial assets and the net incurrence of financial liabilities) and balance sheet items (stocks of financial assets and liabilities outstanding at the end of each quarter) for general government and its subsectors. Variations in stocks are explained both by the transactions and by other factors such as holding gains and losses and other changes in volume. The aim of this section is to present the main characteristics of the general government financial accounts.

From the fourth quarter of 2008 onwards, the fluctuation of transactions in both assets and liabilities increased sharply due to the economic and financial crisis. The gap between the volume of transactions in assets and liabilities has widened sharply, giving rise to increasing negative figures in net financial transactions (B.9f), which is interpreted as the government deficit/ surplus derived from financial accounts. It shows how the deficit is financed by incurring liabilities or disposal of financial assets. Contrary to the government deficit/ surplus, net financial transactions are not seasonally adjusted. The increase and peaks in transactions in financial assets can be explained by governments having acquired such assets to support financial institutions, for example acquiring an equity stake or providing a loan. The worsening economic climate also led to an increase in government total expenditure, while revenue decreased. For these reasons, governments also needed to incur liabilities.

Figure 7: EU net financial transactions, transactions in assets and liabilities, billion euro
Source: Eurostat (gov_10q_ggfa)


Net financial transactions continued to deteriorate steadily from the second quarter of 2008 to the first quarter of 2010 for the euro area and the EU. From the first quarter of 2010 until the first quarter of 2018 onwards an improvement was visible.

In the first quarter of 2020, net financial transactions started to worsen due to higher growth of liabilities compared to assets. In the second quarter of 2020, the net financial transactions continued to sharply decrease. The policy responses to the containment measures increased the financing needs for governments. Part of the financing was used for the accumulation of assets, notably in deposits, but also in other accounts, receivable as a consequence of deferral of tax and social contribution payment deadlines widely introduced in Member States. In the third quarter of 2020, net financial transactions mainly reflected the financing of the deficit. In the fourth quarter of 2020 the governments disposed their accumulated deposits to finance the deficit. In the first quarter of 2021, net financial transactions mainly reflected the financing of the deficit as well as the accumulation of assets (notably deposits), itself driven by net issuances of debt liabilities.

Figure 8: EA-19 net financial transactions, transactions in assets and liabilities, billion euro
Source: Eurostat (gov_10q_ggfa)

Government financial balance sheet

At the level of the EU and the euro area, a significant rise in the stocks of liabilities was observed since the fourth quarter of 2008, together with an increase in assets which was less pronounced. The rise in the stock of liabilities was mainly due to debt securities, which are by far the most important financial instrument on the government liability side. The stock of loan liabilities also increased substantially. The remainder of financial liabilities are mainly 'other accounts, payable'.

In the first and second quarters of 2020, the stock of both financial assets and liabilities increased due to the policy responses to the pandemic both in the EU and the euro area. Notably, increases in deposits as well as other accounts receivables, the latter relating to the deferral of taxes and social contributions that were accrued as revenue but not yet paid, are observed. The stock of liabilities increased mainly due to the issuance of debt securities. This increase is sharper and far more pronounced than observed in the financial crisis. In the third quarter of 2020, the stock of assets slightly increased while the stock of liabilities increased further. In the fourth quarter there was a net disposal of assets while liabilities kept increasing. In the first quarter of 2021 both the stock of assets and liabilities increased further.

Figure 9: EU net financial worth, stock of assets and liabilities, billion euro and % of GDP
Source: Eurostat (gov_10q_ggfa)


Figure 10: EA-19 net financial worth, stock of assets and liabilities, billion euro and % of GDP
Source: Eurostat (gov_10q_ggfa)

The stock of financial assets is mainly held in equity and investment fund shares (for example public corporations), with other accounts receivable, currency and deposits (these exhibit a strong seasonality), loans and debt securities also making up important parts. Loans increased substantially during the financial crisis. In the second quarter of 2020, the stock of currency and deposits increased the most of all financial instruments. In the third quarter of 2020, the stock of assets remained relatively stable for all instruments, while in the fourth quarter of 2020 deposits decreased, only to increase again in the first quarter of 2021.

Figure 11: EU stock of assets by financial instrument, % of GDP
Source: Eurostat (gov_10q_ggfa)


Figure 12: EA-19 stock of assets by financial instrument, % of GDP
Source: Eurostat (gov_10q_ggfa)

The difference between the stock of financial assets and liabilities is the balancing item net financial worth.

Figure 13: Evolution of net financial worth by country, % of GDP
Source: Eurostat (gov_10q_ggfa)

Compared with the first quarter of 2020, the first quarter of 2021 shows a significant deterioration of the balancing item net financial worth for the EU. In the first quarter of 2021, net financial worth stood at -66.3 % of GDP, while in the first quarter of 2020, net financial worth stood at -57.2 % of GDP. The stock of financial assets stood at 48.1 % of GDP (increase compared with 40.9 % of GDP in the first quarter of 2020), while the stock of liabilities increased from 98.1 % of GDP to 114.3 % of GDP. The stock of financial assets and liabilities changes due to financial transactions as well to 'other flows' such as revaluations. In recent quarters up to the fourth quarter of 2020, government debt securities (liabilities) have notably increased in value in many EU countries, driven by declining interest rates. The higher value of these liabilities affects negatively net financial worth. In the second, third and fourth quarters of 2020, the stock of debt securities increased substantially due to transactions (increased financing needs of governments) as well as due to positive revaluations. In the first quarter of 2021, the stock of debt securities increased due to the issuance of new debt, while this was partly offset by a lower valuation.

Figure 14: EU stock of liabilities by financial instrument, % of GDP
Source: Eurostat (gov_10q_ggfa)


Figure 15: EA-19 stock of liabilities by financial instrument, % of GDP
Source: Eurostat (gov_10q_ggfa)

Quarterly gross debt for general government

At the end of the first quarter of 2021, still largely impacted by policy measures to mitigate the economic and social impact of the coronavirus pandemic and recovery measures, which continued to materialise in increased financing needs, the government debt to GDP ratio in the euro area exceeded 100 % for the first time – the ratio stood at 100.5 %, compared with 97.8 % at the end of the fourth quarter of 2020. In the EU, the ratio increased from 90.5 % to 92.9 %. Compared with the first quarter of 2020, the government debt to GDP ratio rose in both the euro area (from 86.1 % to 100.5 %) and the EU (from 79.2 % to 92.9 %): the increases are due to two factors - government debt increasing, and GDP decreasing.

At the end of the first quarter of 2021, debt securities accounted for 82.6 % of euro area and for 82.2 % of EU general government debt. Loans made up 14.2 % and 14.7 %, respectively, and currency and deposits represented 3.2 % of euro area and 3.1 % of EU government debt. Due to the involvement of EU Member States' governments in financial assistance to certain Member States, quarterly data on intergovernmental lending (IGL) are also published. The share of IGL as percentage of GDP at the end of the first quarter of 2021 amounted to 2.0 % in the euro area and to 1.7 % in the EU.

The highest ratios of government debt to GDP at the end of the first quarter of 2021 were recorded in Greece (209.3 %), Italy (160.0 %), Portugal (137.2 %), Cyprus (125.7 %), Spain (125.2 %), Belgium (118.6 %) and France (118.0 %), and the lowest in Estonia (18.5 %), Bulgaria (25.1 %) and Luxembourg (28.1 %).

Figure 16: General government gross debt, % of GDP, 2021Q1
Source: Eurostat (gov_10q_ggdebt)


Compared with the fourth quarter of 2020, twenty-three Member States registered an increase in their debt to GDP ratio at the end of the first quarter of 2021, two a decrease, while the ratio remained stable in Slovakia and Bulgaria. The largest increases in the ratio were observed in Cyprus (+6.5 percentage points – pp), Czechia (+6.3 pp), Spain (+5.3 pp), Slovenia (+5.2 pp), Belgium (+4.4 pp), Malta and Italy (both +4.2 pp). The decreases were recorded in Lithuania (-1.5 pp), and Denmark (-1.4 pp).

Figure 17: Change in general government gross debt, percentage points of GDP, 2021Q1 compared to the previous quarter
Source: Eurostat (gov_10q_ggdebt)


Compared with the first quarter of 2020, all Member States registered an increase in their debt to GDP ratio at the end of the first quarter of 2021. The largest increases in the ratio were recorded in Cyprus (+29.5 pp), Greece (+28.6 pp), Spain (+26.2 pp), Italy (+22.1 pp) and Portugal (+18.0 pp), while the lowest increases where observed in Ireland (+1.7 pp), Sweden (+4.5 pp), Bulgaria (+5.0 pp), the Netherlands (+5.6 pp), Finland (+5.9 pp) and Luxembourg (+6.0 pp).

Figure 18: Change in general government gross debt, percentage points of GDP, 2021Q1 compared to the same quarter of the previous year
Source: Eurostat (gov_10q_ggdebt)

Evolution of deficit and debt

The figure below shows some of the most important links between the quarterly deficit and the quarterly debt for the euro area. While in general, government gross debt will increase in the presence of a government deficit, this is not necessarily the case in the short-term. Deficits can also be financed by the sale of assets, or alternatively debt can be used to finance the acquisition of assets. Therefore, in addition to the surplus/deficit, a strong co-movement of net acquisition of financial assets exists with the evolution of quarterly debt. The incurrence of liabilities not covered in the Maastricht debt definition as stipulated in the excessive deficit procedure EDP (mainly 'other accounts, payable') as well as valuation differences and discrepancies typically play a smaller role in explaining the change in debt.

Figure 19: EA-19 evolution of general government deficit and debt, percentage of GDP
Source: Eurostat (gov_10q_ggdebt)

Between the fourth quarter of 2017 and the fourth quarter of 2019, for the euro area, the link between the deficit and the gross debt was mainly explained by net acquisition of financial assets.

Since the first quarter of 2020, at the level of the euro area, deficits (non-seasonally adjusted) started increasing because of the COVID-19 containment measures and policy responses to mitigate the economic and social impact of those containment measures. This was in particular the case in the second quarter of 2020, where the highest deficit since the start of the series was recorded (12.0 % of GDP). The financing of the deficit explains 56 % of the increase in gross debt for the first quarter of 2020 and 46 % for the second quarter. The net acquisition of financial assets explains further the debt increases in the first and second quarters of 2020, implying that the increase in debt was a lot higher than the deficit. Notably, increases in deposits as well as other accounts receivables, the latter relating to the deferral of taxes and social contributions that were accrued as revenue but not yet paid, are observed in the first two quarters of 2020. In the third quarter of 2020, the financing of the deficit explained the main part of the increase in debt. In the fourth quarter of 2020, at the level of the euro area, the deficit was financed for the major part by the disposal of assets (including reductions in deposits accumulated with major debt issuances in the first and second quarters) rather than by incurring additional debt. An increase in liabilities not part of Maastricht debt (notably other accounts, payable) also contributed.

In the first quarter of 2021 the deficit contributed for the larger part to the increase in debt, while the accumulation of assets (notably deposits) also had an significant impact. The deficit and assets were also financed with liabilities that are not covered in the definition of debt (other accounts, payable).

Data sources

Please refer to the country notes on Eurostat's metadata (ESMS) for more important information at country level.

The first quarter of 2020 is the quarter in which the Member States began to introduce COVID-19 containment measures, while in the second those measures began to fully materialise. The third and fourth quarter of 2020 and first quarter of 2021 continued to be influenced by policy responses to the COVID-19 pandemic. The policy measures with the largest impact on the government accounts related to taxes (tax exemptions, postponement of payment deadlines) and to expenditure measures to support employment and businesses. Country specific explanatory metadata is published. Further harmonisation is expected as regards recording practices for the expenditure and liquidity measures introduced, as well as for accruals of deferred taxes. Revisions in the coming quarters are thus expected to be larger than usual.

Gross domestic product

Throughout this publication, gross domestic product (GDP) at current prices (nominal) is used, either using the non-seasonally adjusted or the seasonally and calendar adjusted forms as appropriate.

Context

Quarterly accounts of general government

Eurostat releases quarterly flow and stock data for the general government sector, using an integrated structure which combines the data from quarterly non-financial accounts for general government, quarterly financial accounts for general governmentand quarterly government debt. An integrated publication combining data from all three tables is released quarterly on the dedicated Government Finance Statistics (GFS) section of the Eurostat web site.

Data is transmitted according to the ESA 2010 transmission programme for quarterly financial accounts and quarterly government debt. Non-financial accounts data is transmitted under gentlemen's agreement.

ESA 2010

Eurostat publishes quarterly government finance statistics figures based on the European System of Accounts 2010 (ESA 2010) methodology.

General government

Government finance statistics cover data for general government as defined in ESA2010, paragraph 2.111.

Seasonal adjustment of selected data series

Quarterly government finance statistics are reported to Eurostat in the form of non-seasonally adjusted (raw) figures. However, a certain number of the reported series contain seasonal patterns (explained by the link with the seasonality of economic activity and by the budgetary planning and accounting practices of national governments), which make it difficult to carry out a direct meaningful cross-country and time series analysis using non-adjusted data. The same is true for GDP, which reflects the seasonal pattern of all economic activities in the economy.

To overcome this difficulty and thus to gain a better understanding of trends in addition to the non-seasonally adjusted data, seasonally adjusted data is presented for the EU and euro area in this article. The seasonal adjustment aims to remove the seasonality linked to this quarterly data.

It should be noted that annualised seasonally adjusted data is not in general equal to annualised non-adjusted data. When using annualised figures, it is more appropriate to use non-seasonally adjusted data. Using seasonally adjusted data is more appropriate when looking at quarter-on-quarter growth rates.

The seasonal adjustment for total revenue and total expenditure is done using an indirect procedure (at country level) using Tramo-Seats on Demetra+. Where available, National Statistical Institutes own estimates are used as input for the aggregates, which are supplied to Eurostat on a gentlemen's agreement basis. Some country level estimates as well as data for the EU aggregates are published on Eurobase. These estimates are supplemented by Eurostat's own estimates for those countries, which do not yet supply their own estimate. This data is labelled confidential and not published.

Net lending (+)/ net borrowing (-) is derived indirectly from the accounting identity: Net lending (+)/ net borrowing (-)= total revenue - total expenditure.

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