International Internet Magazine. Baltic States news & analytics
Wednesday, 22.10.2014, 16:49
Estonia had the lowest government sector debt burden in EU in 2012
Government debt ratio reached over 60% of GDP in 14 member states, being the highest in Greece (156.9%).
In 2012, the lowest government deficit in percentage of GDP was recorded also in Estonia, 0.3%.
In 17 member states the deficit was over 6%, being the highest in Spain, 10.6%.
According to the data of the Ministry of Finance Lithuania's general government deficit in 2012 was 2.3 percentage points lower than a year ago and amounted to 3.2% of GDP, the ministry said in a report.
In 2012 Lithuania continued to implement fiscal consolidation measures in the framework of the Excessive Deficit Procedure (EDP).
The deficit has dropped from LTL 2.2 billion (EUR 0.637 billion) to LTL 3.7 billion (EUR 1.07 billion). The largest share – 53.2% consists of the deficit of the social security funds (Social Insurance Fund SoDra, Compulsory Health Insurance, Employment Funds).
The resulting rate is 0.2 percentage points higher than expected in 2012 in the convergence program of Lithuania.
The discrepancy has led to two main reasons: the policy of municipal expenditures and specifics of accounting public dividends. Municipalities have spent all the surplus revenue which, according to the estimate of the Ministry of Finance, amounted to 0.2% of GDP value.
On the basis of Eurostat accounting standards, when the entity pays dividends from the accumulated reserves or profits earned in the previous years, such transactions are not recognised as revenue of the relevant budgetary period. For this reason, in the previous year, a part of the dividends paid by state-owned enterprises (which was 0.3% of GDP) was not recognized as state budget revenues.