The growth situation is stabilising but more challenging than earlier thought. Public finances count on a growth pick-up and macro-economic risks are balanced.
National accounts data for the first half of 2013 how that the economy continues to contract on an annual basis. GDP growth, however, turned positive in quarterly terms in the second quarter, and a more robust performance is expected for the second half of the year which underpins the current forecast of 0.3% growth in 2013.
Unemployment has fallen by almost two percentage points since its crisis peak to 13.3% in September 2013, while outward migration is beginning to decline. Employment has been growing for three consecutive quarters, including full-time jobs. Earnings remain weak amid the still-considerable slack.
The 2013 deficit is estimated at 7.4% of GDP. In 2014, the general government deficit is projected at 5.0% of GDP including consolidation measures of 1.5% of GDP, of which one-third is on the revenue side and two-thirds on expenditure. In 2015, the general government deficit is projected at 3.0% of GDP assuming a fiscal adjustment of 1.4% of GDP; 0.4% of GDP in revenue measures and 1% of GDP in expenditure measures. The structural fiscal balance is projected to narrow from 6.7% of GDP in 2013 to 3.3% of GDP.
Government debt is projected to peak at 124% of GDP in 2013 and decline thereafter as primary surpluses are achieved and economic growth picks up. Moreover, a reduction in the currently high precautionary cash balances of around 13% of GDP at end-2013 to around 7% by 2015 will contribute to narrowing of the debt-to-GDP ratio.
Full report
© European Commission
Key
Hover over the blue highlighted
text to view the acronym meaning
Hover
over these icons for more information
Comments:
No Comments for this Article