This supplement provides information that has become available since the Staff Report was circulated to the Executive Board on January 30, 2015. The information does not alter the thrust of the staff appraisal.
Economic Developments and Prospects
Preliminary data through end-2014 suggest that the general government deficit reached 5.8 percent of GDP (cash basis, excluding extra-budgetary entities and including bank-related costs). Net of bank-related costs, the deficit is estimated at 3.5 percent of GDP,1 0.2 percent of GDP lower than the Staff Report projection (which was based on end-October data). The difference is due to lower spending (0.5 percent of GDP) on public investment, capital transfers, and public wages, which was partly offset by lower revenues (0.3 percent of GDP) from indirect taxes and EU receipts. Assuming adherence to the expenditure targets included in the 2015 supplementary budget—which was recently approved by the cabinet—the better-than-expected 2014 fiscal outturn does not materially affect staff’s projections for 2015 and the medium term nor the related policy advice.
|of which: Taxes on goods and services||14.3||14.2||14.2||14.1|
|Compensation of employees||9.8||9.7||9.6||9.5|
|Purchases of goods and services||6.0||6.0||6.4||6.4|
|Transfers to individuals and households||17.1||17.1||16.8||16.8|
|of which: capital transfers||2.0||1.9||1.0||1.0|
|Net acquisition of non-financial assets||3.9||3.7||3.9||4.0|
|Net lending / Net borrowing||−6.0||−5.8||−4.0||−4.0|
|(excluding bank restructuring)||−3.7||−3.5||−4.0||−4.0|
Staff’s definition of the interest bill includes interest on BAMC bonds of about 0.1 percent of GDP.