Croatia next to Luxembourg in terms of smallest budget deficit in Q2

At the level of the 20-member eurozone, the seasonally adjusted budget deficit-to-GDP ratio stood to 3.3% in the 2023 Q2, as well as in the first three months of this year, the European Union's statistical office, Eurostat, reported.

While the euro area deficit to GDP ratio remained stable compared to the first quarter of 2023, a slight increase was observed for the EU. In the second quarter of 2023, the EU deficit to GDP ratio stood at 3.2%, an increase compared to 3.1% in the first quarter of 2023.

"Measures to alleviate the impact of high energy prices continued to have a strong impact on the government balances in the second half of 2022 and first and second quarters of 2023 and the majority of Member States continued to record a government deficit."

Both revenue and expenditure, expressed as a share of GDP, have slightly decreased compared to the beginning of the year, statisticians explain.

"In the second quarter of 2023, total government revenue in the euro area amounted to 46.1% of GDP," Eurostat reported.

"A decrease compared with 46.3% in the first quarter of 2023 was observed mainly due to an increase in GDP. In absolute terms, seasonally adjusted total revenue in the euro area increased by around €17 billion compared with the first quarter of 2023. Total government expenditure in the euro area stood at 49.4% of GDP, a slight decrease in the ratio compared with 49.5% in the previous quarter, due to an increase in nominal GDP."

"Seasonally adjusted total government expenditure increased by around €19 billion compared with the previous quarter. In the EU, total government revenue was 45.6% of GDP in the second quarter of 2023, the ratio remaining stable as compared with the first quarter of 2023.

"Seasonally adjusted total revenue in the EU increased by around €30 billion compared with the first quarter of 2023. Total government expenditure in the EU was 48.9% of GDP, an increase compared with 48.7% of GDP in the previous quarter. Seasonally adjusted total expenditure increased by around €38 billion compared with the previous quarter."

Five countries with surplus

According to seasonally adjusted data available to Eurostat, the largest budget deficit-to-GDP ratio was recorded in Hungary in the second quarter, at 6.6%.

Romania follows with a deficit of 6.3%.

Luxembourg had the most narrowest budget deficit-to-GDP ratio, 0.4%.

Croatia follows with a seasonally adjusted budget deficit in the second quarter standing at 0.5% of GDP.

In the first quarter, the budget showed a deficit of 0.6%, and in the second quarter last year a surplus of 0.4%, according to Eurostat data.

Close to Croatia in the period from April to June this year are Estonia and Lithuania, whose budgets were in the red by 0.7%.

Only five countries recorded a budget surplus, and the largest was in Denmark, reaching 2.8% of GDP. Ireland and Portugal followed with a surplus of 2.4% and 2.3% respectively, while the Netherlands and Latvia had surpluses of  0.2% and 0.1% respectively.

Eurostat did not have seasonally adjusted data only for Greece, Italy and Cyprus.