Fiscal leeway of 900 mln euros
The 2022 budget figures released last week came in better than forecast and bolstered the government’s arsenal for a possible new and final round of benefits ahead of the elections.
Tax revenue was up by 81 million euros, to which one should add around €300 million from road tax to be collected by end-February after the extension granted, bringing the overall 2022 revenue outperformance to almost €400 million.
As sources from the Finance Ministry report, this 2022 revenue overshoot translates into additional revenue in 2023 (via carryover) of €250-300 million.
The second source of additional fiscal space is the lower rates of natural gas, which will free up a large part or all of the €600 million earmarked to subsidize electricity bills.
The budget was drawn up assuming a natural gas rate of €120 per megawatt-hour and on Friday the rate was set at €53/MWh. According to Finance Ministry sources, at this rate, or even one up to €90/MWh, the reserve for electricity bills will not need to be used.
This means that the looming fiscal space could reach a total of €900 million. GDP and tax revenues could strengthen further if the recent slightly improved forecasts for the economy in Europe are confirmed.
