According to provisional data, the state budget deficit amounted to EUR –2.339 billion in the first ten months of 2021, while without the direct effect of COVID-related measures the deficit would have amounted to EUR –423 million. According to the Ministry of Finance’s estimate of the out-turn in September, the state budget deficit is expected to amount to EUR -3.958 billion this year, which is around EUR 1.200 billion more than projected in the budget adopted last autumn.
Revenue in the first ten months was 19.6% higher than in the same period last year or 8.1% higher without taking into account the direct effect of COVID-related measures.
Expenditure in the first ten months was 13.9% higher than in the same period last year or 7.5% higher without taking into account the direct effect of COVID-related measures totalling EUR 2.420 billion. The latter is predominantly due to higher labour costs and investment.
The total level of state budget expenditures for COVID-related measures since March 2020 amounts to EUR 4.424 billion. The largest individual measure was allowances to employees of EUR 928 million, of which around EUR 720 million were paid in the first ten months of this year. The Ministry of Finance’s September estimate of the out-turn for 2021 shows that, within the framework of expenditures for COVID measures, labour costs in the last two months of this year are expected to amount to around EUR 230 million.
The Ministry of Finance’s September estimate of the annual out-turn for 2021 shows that the year-on-year expenditure growth without considering the effect of COVID-related measures and investments is expected to increase from 5.0% in the first ten months to 31.8% in the last two months. As the actual out-turn is likely to be lower than these estimates, the projections for the coming years in the budget documents in the process of adoption are again not based on appropriate bases. This increases the risks for a structural deterioration of public finances. These risks also derive from some legislative proposals that are already being considered in the National Assembly.