EU fiscal policy will normailse in 2023 following further supporting measures this year, Commissioner Gentiloni says.
EU fiscal policy is set to normalise next year after a another year of support for the economy, Economy Commissioner Paolo Gentiloni said Monday The block's average government deficit is forecast to fall from 4.7% of GDP in 2021 to 3.6% in 2022 and further down to 2.5% in 2023.
Gentiloni, speaking as the latest economic forecasts, said that this trend reflected the unwinding of COVID measures and the improved economic conjuncture. He also noted that the number of countries with a deficit exceeding 3% of GDP fell to 15 in 2021 and is forecast to rise to 17 in 2022, before falling back to 11 in 2023 (MNI: EU To Postpone Decision On Debt Rule Freeze - Officials).
Additional costs in 2022 related to measures to mitigate the impact of high energy prices (0.6% of GDP for the EU) and to deal with the current humanitarian crisis in Eastern Europe (0.1% of GDP) are not enough to outweigh these factors, Gentiloni noted. Debt-to-GDP ratio for the EU as a whole is set to decline from 89.7% of GDP in 2021 to 85.2%in 2023.