Interestingly, while the nominal figure of government debt held steady, its proportion of GDP saw a notable decrease to 46.5 per cent from 50.1 per cent in 2022. This decline is attributed to robust GDP growth of 8 per cent in 2023, primarily fuelled by higher prices across the economy.
Government revenues witnessed a significant uplift of approximately 7 per cent in 2023 relative to the preceding year, with taxes and contributions surging by more than €35 billion. Notably, wage and income taxes rose by €10 billion, and corporate tax revenues increased by €9 billion. Dividend tax revenues also saw a remarkable growth, doubling from the previous year to €6 billion, as per CBS.
On the expenditure front, the government's spending escalated by nearly 8 per cent, with social benefits, including healthcare, absorbing an additional €20 billion. Government employee salaries and the procurement of goods and services also witnessed substantial hikes, reflecting the impact of inflation.
Despite the slight deficit and increased spending, the stability of the public debt level and its reduced ratio to GDP stand out as significant fiscal outcomes for 2023. The maintenance of public debt was facilitated by the utilisation of bank balances, deposits, and receipts from financial assets, allowing for slight debt reduction amidst economic growth.
ALCHEMPro News Desk (DP)
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