Government deficit across continental Europe is inching up based on the figures coming out of the statistical office of the European Union (Eurostat).

The deficit figures for the just-ended fourth quarter showed that the deficit for the Euro Area has inched up to eight per cent of Gross Domestic Product (GDP) and 7.5 per cent in the European Union (EU).

According to Eurostat, “while the deficit in the fourth quarter of 2020 did not reach the record level of the second quarter of 2020, an increase in the deficit compared to the third quarter of 2020 was observed.”

Eurostat noted that, “the deficit to GDP ratio increased due to higher expenditure, while revenue continued to increase. Total expenditure continued to be influenced by policy responses to the COVID-19 pandemic.”

Government revenue in Euro Area closed at 46.8% and EU at 46.5%

Furthermore, Eurostat records showed that in the fourth quarter of 2020, total government revenue in Euro Area and EU closed at 46.8 per cent (Q3: 46.2 per cent) and 46.5 per cent (Q2: 46 per cent) of GDP, respectively. Eurostat reported that in the Euro Area, “the seasonally adjusted total revenue in the euro area increased by around €17 billion compared with the third quarter of 2020.”

On other hand, total government expenditure of GDP in the Euro Area was 54.8 per cent (Q3: 52.7 per cent) and stood at 54.1 per cent (Q3: 52.1 per cent) in the EU. Notably, Eurostat stated that in the Euro Area, “seasonally adjusted total government expenditure increased by around €61 billion compared with the third quarter of 2020.”

This was mainly due to a higher impact of policy measures to mitigate the economic and social impact of the COVID-19 pandemic.