Government deficit of 2 billion euros over the first three quarters of 2024

© ANP / Tobias Kleuver Media
Government spending over the first three quarters of 2024 exceeded revenues by over 2 billion euros. Year on year, both government spending and revenues increased by 24 billion euros. Public debt amounted to 42.2 percent of gross domestic product (GDP). The debt-to-GDP ratio reached its lowest level since the start of the series in 1995. Statistics Netherlands (CBS) reports this on the basis of new figures on public finances.
The Autumn Memorandum 2024 of the Ministry of Finance assumes a deficit of 17 billion euros, 1.5 percent of GDP for the whole year. To arrive at a deficit of 17 billion euros for this year, the government would have to spend nearly 15 billion euros more in the last quarter of 2024 than it receives in revenue.


Revenues and expenditure increased

Both government revenues and expenditures rose by 7 percent over the first three quarters of 2024. In absolute terms, revenues increased by more than 24 billion euros. This was largely because premium and tax revenues were 22 billion euros higher than in the same period of 2023. Other revenues rose by nearly 2 billion euros, mainly due to higher revenues from public services.

Total expenditure increased by nearly 24 billion euros. Benefit payments and healthcare spending increased by the most, at nearly 14 billion euros. In addition, the government spent more on employee compensation and purchases of goods and services, by 6 billion euros and 4 billion euros, respectively. Government capital transfers also increased by 3 billion euros, mainly due to compensation following the Netherlands’ Supreme Court rulings on box 3 income taxation and a German real estate fund. On the other hand, government spending on subsidies fell by 4 billion euros. This was high on an occasional basis in the first three quarters of 2024, mainly due to the price cap for energy, which no longer applied in 2024.

Debt-to-GDP ratio at its lowest level since 1995

In the first three quarters of 2024, the Netherlands’ public debt fell by nearly 12 billion euros to 470 billion euros, 42.2 percent of GDP. This represents a decline of 3 percentage points from the beginning of 2024. The debt-to-GDP ratio reached the lowest level since the start of the series in 1995.

The government balance and the debt-to-GDP ratio are important indicators for the state of public finances in a country. The European convergence criteria allow a maximum deficit of 3 percent of GDP in one year, and a maximum debt level of 60 percent of GDP as at the end of that year.


Adjustment of government expenditure in Q2 2024

Statistics Netherlands has adjusted the expenditure for the second quarter of 2024. This mainly concerns the compensation following the Netherlands’ Supreme Court rulings on box 3 income taxation. This entry was also discussed with Eurostat, the statistical office of the EU. CBS also included corporate tax refunds in government spending for Q2 of 2024, due to a Supreme Court ruling on a foreign real estate fund.

Public debt adjustment for 2013 onwards

Public debt (EMU definition) for 2013 onwards has been adjusted due to new calculations by Eurostat for the part of the debt incurred under the European Financial Stability Facility to be allocated to the Netherlands.

Sources