Fiscal leeway of 900 mln euros

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.

Subscribe to our Newsletters

Enter your information below to receive our weekly newsletters with the latest insights, opinion pieces and current events straight to your inbox.

By signing up you are agreeing to our Terms of Service and Privacy Policy.