MNI BRIEF: EZ Government Deficit To GDP At 5.8% in Q3

The Euro area seasonally adjusted government deficit to GDP rebounded sharply in Q3, coming in at 5.8% after the unprecedented deficit of 11.9% in Q2. According to Eurostat, the deficit to GDP ratio declined on GDP growth, higher revenue and lower expenditures. All member states continued to register a deficit in Q3 with Malta recording the highest level of 10.9%. Among the largest economies in the EZ for which data is available, Spain revealed the largest deficit to GDP, standing at 7.7%.

EZ government revenue stood at 46.2% of GDP in Q3, after recording 47.7% in the previous quarter. Eurostat noted that the decline as a percentage of GDP is due to stronger relative increase in GDP than the increase in total revenue. Total EZ government expenditure came in at 52.1% of GDP in Q3, significantly lower than in Q2 where it stood at 59.6%. According to Eurostat this was mainly due to a smaller impact of policy measures to mitigate the impact of the pandemic.