Budget boost from primary surplus in 2022
The next government will launch its economic program with an additional advantage from the 2022 fiscal balance.
The small primary surplus of the previous year, just over 0.1% of gross domestic product, against a primary deficit of 1.6% of GDP predicted a few months ago, helps the achievement of this year’s fiscal goals, as well as those of the following years that will be more difficult.
The Finance Ministry is putting the finishing touches on the 2023-2026 Stability Program it must submit to the European Commission this weekend.
Although it will not include an explicit reference to primary results, its other forecasts suggest that the primary surplus this year will move to the budgeted level of 0.7% of GDP, or even slightly higher. For 2024, a primary surplus of 2% of GDP will be predicted, and for the next two years a little higher – 2.2%-2.3% of GDP.
The 2022 performance is a welcome gift for the next government. The distance it would have to travel to adjust from a surplus of 0.1% of GDP in 2022 to 0.7%-0.9% this year and 2% in 2024 is clearly smaller compared to having a primary deficit of 1.6% of GDP in 2022.
