Now at 4% of GDP in the Euro Area and 3.7% of GDP in the EU

The statistical office of the European Union (Eurostat) is reporting that government deficit in Europe declined during the third quarter of 2021.

The deficit as a percentage of Gross Domestic Product (GDP) was 4.0 per cent for Euro Area and 3.7 per cent in European Union (EU). Eurostat reports that, “significant decreases in the deficits compared to the second quarter of 2021 were observed, but the deficits remained at a high level compared to the pre-pandemic period”.

In addition Eurostat reports that, “the deficit to GDP ratio decreased due to increases in total revenue, decreases in the total expenditure as well as due to a higher GDP in comparison with the second quarter of 2021. Total revenue and total expenditure continued to be influenced by policy responses to the COVID-19 pandemic”.

Most Member States continued to record a government deficit

In the third quarter of 2021, most member states continued to record a government deficit. Furthermore, Eurostat explains that for the second quarter of 2021, total government revenue in Euro Area and EU closed at 47.0 per cent (Q2: 46.8 per cent) and 46.5 per cent (Q2: 46.5 per cent) of GDP, respectively.

It was observed that, “seasonally adjusted total revenue in the euro area increased by around €53 billion compared with the second quarter of 2021”.

On the other hand, total government expenditure of GDP in the Euro Area and EU was 51 per cent (Q2: 53.2 per cent) and stood at 50.2 per cent (Q2: 52.3 per cent), respectively.

In the Euro Area, Eurostat states that the “seasonally adjusted total government expenditure decreased by around €14 billion compared with the second quarter of 2021″.