In terms of budget deficit and debt-to-GDP ratio, Finland belongs to EU elite
Finland’s general government deficit relative to gross domestic product (GDP) decreased to 0.5 per cent from the previous year’s 2.5 per cent, reported Statistics Finland on Friday.
According to the preliminary data, public deficit and debt remained below the reference values of the European Union’s Stability and Growth Pact (SGP).
The public deficit concept used in these statistics complies with the Excessive Deficit Procedure (EDP) of the SGP.
According to the pact, the annual budget deficit must not be higher than 3.0 per cent of GDP in any eurozone member state.
The European Union member states are obliged to ensure that their national debt does not exceed 60 per cent of GDP.
Last year, Finland’s general government debt-to-GDP ratio also remained below the limit defined by the Stability and Growth Pact.
The general government debt-to-GDP ratio grew by 0.2 percentage points to 48.6 per cent from the corresponding period of the previous year.
During the recession, the debt-to-GDP ratio has grown considerably. According to Statistics Finland, the country’s debt-to-GDP ratio was 33.9 per cent in 2008, prior to the recession.
During the economic decline in 2009, the debt-to-GDP ratio grew by as much as 9.6 percentage points to 43.5 per cent.
Finland’s relative standing among other eurozone countries continues to be relatively strong, even though the country’s public debt has gone up rapidly.
According to a forecast made by the European Commission, three states of the 17 member-states in the Economic and Monetary Union of the European Union (EMU) will meet the conditions of the SGP in 2012. These countries are Finland, Estonia, and Luxembourg.
Germany is regarded as the strongest eurozone country., and its leading position has become even stronger during the European debt crisis.
According to the European Commission’s forecast, in 2012 Germany’s general government deficit relative to GDP will be 1.0 per cent, while the country’s general government debt-to-GDP ratio will be 81.2 per cent.
In other words, Germany’s national debt-to-GDP ratio will exceed the criterion set by the Stability and Growth Pact.
Statistics Finland: Preliminary data released on general government deficit in 2011 changed only slightly when revised (30.3.2012)
Statistics Finland: General government debt grew by EUR 3.3 billion in the last quarter of 2011 (30.3.2012)
Stability and Growth Pact (Wikipedia)