Government finance statistics - quarterly data

From Statistics Explained

Data from 24 October 2014. Seasonal adjustment metadata updated on 24 October 2014. Most recent data: Further Eurostat information, Main tables and Database.

In recent years Eurostat has significantly expanded the range of integrated quarterly data on government finances available, providing a timely and increasingly high quality picture of the evolution of government finances in the European Union (EU). The data presented in this article reflect both non-financial and financial (quarterly non-financial and financial accounts for general government) transactions and cover all European Union (EU-28) countries as well as Iceland, Norway and Switzerland.

This article is based on data transmitted to Eurostat at the end of September 2014 and during October 2014 and includes data coverage of the second quarter of 2014. It is the first ESA 2010 data published for quarterly government finance statistics. It is supplemented by non-financial seasonally adjusted data estimated provided on a voluntary basis by EU and EFTA countries' National Statistical Institutes. Eurostat regularly publishes seasonally adjusted and working day adjusted quarterly data on government revenue, expenditure and surplus (+)/ deficit (-), currently for sixteen Member States and the EU aggregates.

Table 1: EA-18 and EU-28 quarterly net lending (+)/ net borrowing (-), total expenditure and total revenue as a percentage of GDP, seasonally adjusted data
Source: Eurostat (gov_10q_ggnfa), seasonally adjusted data: Eurostat and National Statistical Instititute estimates
Table 2: Quarterly net lending (+)/ net borrowing (-) as a percentage of GDP, seasonally adjusted data
Source: Eurostat (gov_10q_ggnfa), seasonally adjusted data: National Statistical Institute estimates
Table 3: Quarterly net lending (+)/ net borrowing (-) by country, non-seasonally adjusted data
Source: Eurostat (gov_10q_ggnfa)
Figure 1: EU-28 and EA-18 quarterly net lending (+)/ net borrowing (-) by country, seasonally adjusted data
Source: Eurostat (gov_10q_ggnfa)

Main statistical findings

In the second quarter of 2014, the seasonally adjusted general government deficit to GDP ratio stood at 2.5 % in the euro area (EA-18), a slight decrease compared with the first quarter of 2014. In the EU-28, the deficit to GDP ratio also decreased slightly to 3.0 % of GDP.

Quarterly non-financial accounts for general government

Government revenue and expenditure

Both total revenue and expenditure exhibit a clear seasonality. In order to interpret trends for the most recent quarters, seasonally adjusted data is presented in addition to the raw data transmitted by EU Member States (see explanation below).

In the second quarter of 2014, total government revenue in the euro area amounted to 46.6 % of GDP, compared with 47.6 % in the first quarter of 2014. Total government expenditure in the euro area stood at 49.1 % of GDP, down from 50.1 % in the previous quarter.

In the second quarter of 2014, total government revenue in the EU-28 was 45.1 % of GDP, compared with 46.0 % in the first quarter of 2014. Total government expenditure in the EU-28 was 48.2 % of GDP, down from 49.1 % in the previous quarter.

From 2010Q4 onwards, a decrease in the level of the total expenditure-to-GDP ratio is visible, reflecting an absolute decrease in total expenditure as well as the effects of renewed growth in the EU and the euro area (all seasonally adjusted).

In the fourth quarter of 2012 and in the second quarter of 2013, total expenditure increased slightly in both areas, influenced by interventions to support the banking sector in several Member States, notably in Spain in the fourth quarter of 2012 and in Greece in the second quarter of 2013.

Social welfare spending accounted for over 40 % of EU total government expenditure in the second quarter of 2014. This category typically covers risks or needs such as sickness, disability, old age, family support and unemployment and – not surprisingly - was responsible for a large part of the increase of the expenditure-to-GDP ratio recorded during the crisis.

General government deficit

The difference between general government revenue and expenditure is known in ESA2010 terminology as general government net lending (+)/ net borrowing (-) (ESA2010 category B.9) and is usually referred to as government deficit (or surplus). This figure is an important indicator of the overall situation of government finances. It is usually expressed as a percentage of GDP.

In the second quarter of 2014, the seasonally adjusted general government deficit to GDP ratio stood at 2.5 % in the euro area (EA-18), a slight decrease compared with the first quarter of 2014. In the EU-28, the deficit to GDP ratio also decreased slightly to 3.0 % of GDP.

Due to the economic and financial crisis, which started in 2008, EU government's deficits steadily deteriorated and reached a record level of -7.6 % of GDP (seasonally adjusted) in 2010Q3. The beginning of the consolidation of public finances which can be observed from 2010Q4 onwards is due to a reduction in government expenditure not only in terms of GDP but also in absolute terms as well as continued growth in absolute revenue (seasonally adjusted absolute numbers), which outpaced the growth in GDP. However, from 2011Q3 onwards, general government total expenditure resumed growth when measured in absolute terms.

The large revisions observed in 2012Q2 and 2014Q1 for the EU-28 are due to the different treatment of lmp sum transfers of pension scheme assets under ESA2010. The underlying events in 2012Q2 is the nationalisation of the Royal Mail pension scheme in the United Kingdom and the corresponding assumption of assets in 2012Q2. The large revision of the EU-28 deficit in 2014Q1 is due to the different methodological treatment of the Polish pension scheme reform under ESA2010 as opposed to ESA95.

In the first quarter of 2014, the differing evolution of EU and euro area deficits is largely due the pension reform in Poland, during which general government assumed assets and future obligations of pension schemes.

Seasonally adjusted general government deficit

It should be noted that annualised seasonally adjusted data is not in general equal to annualised non-adjusted data. When using annualised figures, it is more appropriate to use non-seasonally adjusted data. Using seasonally adjusted data is on the contrary more appropriate when looking at quarter-on-quarter growth rates.

The large deficit for Slovenia in the fourth quarter of 2013 is mainly caused by capital injections to support financial institutions. This is also the reason for the relatively large deficit in 2013Q1. In contrast to this, 2013Q3 is positively influenced by dividends from the National Central Bank.

The 2012Q4 deficit for the Czech Republic is negatively influenced by a capital transfer in the context of the restitution of assets to churches.

On Eurobase, seasonally adjusted and calendar day adjusted total revenue and total expenditure data of Member States and EFTA countries, which provide seasonally adjusted and calendar day adjusted data for total revenue, total expenditure and net lending (+)/ net borrowing (-) in addition to the legal requirements of the ESA95 transmission programme, is presented in full detail. This data is provided on a voluntary basis by the National Statistical Institutes.

Quarterly financial accounts for general government

Financial transactions - assets, liabilities and net financial transactions

The government financial accounts notably allow an analysis of how governments finance their deficits or invest their surpluses. They include data on financial transactions (net acquisition of financial assets and the net incurrence of financial liabilities) and balance sheet items (stocks of financial assets and liabilities outstanding at the end of each quarter) for general government and its sub-sectors. Variations in stocks are explained both by the transactions and by other factors such as holding gains and losses and other changes in volume. The aim of this section is to present the main characteristics of the general government financial accounts.

The economic and financial crisis led to significant increases in the fluctuations of net incurrence of liabilities and net acquisition of financial assets.

From the fourth quarter of 2008 onwards, the fluctuation of transactions in both assets and liabilities has increased sharply. The gap between the volume of transactions in assets and liabilities has widened sharply, giving rise to increasing negative figures in net financial transactions (B.9f), which is interpreted as the government deficit/ surplus derived from financial accounts. The increase and peaks in transactions in financial assets can be explained by governments having acquired assets to support financial institutions.

Net financial transactions continued to deteriorate steadily from 2008Q2 to 2009Q3. From 2010Q4 onwards a decrease is visible.

Government financial balance sheet

A significant rise in the stocks of liabilities has been observed since the end of 2008, together with an increase in assets which was less pronounced.

Quarterly gross debt for general government

At the end of the second quarter of 2014, the government debt to GDP ratio in the euro area (EA-18) stood at 92.7 %, compared with 91.9 % at the end of the first quarter of 2014. This increase comes after an increase observed in the first quarter of 2014. In the EU-28, the ratio increased from 86.0 % to 87.0 %. Compared with the second quarter of 2013, the government debt to GDP ratio rose in both the euro area (from 91.7 % to 92.7 %) and the EU-28 (from 85.1 % to 87.0 %). At the end of the second quarter of 2014, debt securities accounted for 79.3 % of euro area and for 80.9 % of EU-28 general government debt, loans for 17.9 % and 15.4 % respectively and currency and deposits for 2.8 % and 3.7 %. Due to the involvement of EU governments in financial assistance to certain Member States, quarterly data on intergovernmental lending (IGL) is also published. The share of IGL in GDP at the end of the second quarter of 2014 amounted to 2.4 % in the euro area and to 1.8 % in the EU-28.

Data sources and availability

Quarterly accounts of general government

Eurostat releases quarterly flow and stock data for the general government sector, using an integrated structure which combines the data from quarterly non-financial accounts for general government (QNFAGG), quarterly financial accounts for general government (QFAGG) and quarterly government debt (QGD). An integrated publication combining data from all three tables is released quarterly on the dedicated Government Finance Statistics (GFS) section of the Eurostat web site and on the dedicated Statistics Explained page Integrated government finance statistics presentation.

Data is transmitted according to the ESA2010 transmission programme for QFAGG and QDEBT. QNFAGG data is transmitted under gentlemen's agreement.

ESA2010

Eurostat publishes for the first time in this News Release quarterly government finance figures based on the European System of Accounts 2010 (ESA 2010) methodology. The data in this Release include revisions due both to the implementation of ESA2010 and to the incorporation of other statistical adjustments.

Methodological changes in ESA2010 include the treatment of assets of pension schemes transferred to general government as a partial compensation for taking over pension obligations. While the transfer of assets has been treated as a non-financial transaction under ESA95, under ESA2010 such lump sum transfers from (public) corporations are treated as financial, with no impact on general government net lending (+)/ net borrowing (-). Furthermore, the difference between the value of assets received by government and the value of the pension obligations has to be treated as a capital transfer from government to the concerned corporation. For more information, please see the Eurostat decision on the issue: here. This has major impact on the quarterly data of the countries concerned. For 2014Q1, the revision in the EU-28 deficit figure compared to the July 2014 release can be largely attributed to such a revision of the treatment of lump sum transfers of pension scheme assets in Poland.

General government

QNFAGG and QFAGG and QDEBT statistics cover data for general government as defined in ESA2010, paragraph 2.111.

Seasonal adjustment of selected data series

Quarterly government finance statistics are reported to Eurostat in the form of non-seasonally adjusted (raw) figures. However, a certain number of the reported series contain seasonal patterns (explained by the link with the seasonality of economic activity and by the budgetary planning and accounting practices of national governments), which make it difficult to carry out a direct meaningful cross-country and time series analysis using non-adjusted data. The same is true for GDP, which reflects the seasonal pattern of all economic activities in the economy.

To overcome this difficulty and thus to gain a better understanding of trends in addition to the non-seasonally adjusted data, seasonally adjusted data is presented for the EU-28 and EA-18 in this article. The seasonal adjustment aims to remove the seasonality linked to this quarterly data.

It should be noted that annualised seasonally adjusted data is not in general equal to annualised non-adjusted data. When using annualised figures, it is more appropriate to use non-seasonally adjusted data. Using seasonally adjusted data is more appropriate when looking at quarter-on-quarter growth rates.

The seasonal adjustment for total revenue and total expenditure is done using an indirect procedure (at country level using Tramo-Seats in Demetra+). Where available, National Statistical Institutes own estimates are used as input for the aggregates. Some country level estimates as well as data for the EU aggregates are published on Eurobase. Net lending (+)/ net borrowing (-) is derived indirectly from the accounting identity: Net lending (+)/ net borrowing (-)= total revenue - total expenditure.

Where available, National Statistical Institutes own estimates are used as input for the aggregates, which are supplied to Eurostat on a gentlemen's agreement basis. Some country level estimates as well as data for the EU aggregates are published on Eurobase. These estimates are supplemented by Eurostat's own estimates for those countries, which do not yet supply their own estimate. This data is labelled confidential and not published.

Net lending (+)/ net borrowing (-) is derived indirectly from the accounting identity: Net lending (+)/ net borrowing (-) = total revenue - total expenditure.

EU-28 seasonally adjusted data have been estimated using EU-27 seasonally adjusted data and the available quarterly pattern for Croatia. Croatian quarterly data are available from first quarter 2012.

For the following countries, the estimates are produced by the respective National Statistical Institute, which all follow the “ESS guidelines on seasonal adjustment”:

Belgium: The seasonally adjusted series are computed following an indirect approach. The components of the revenue and of the expenditure of the General Government are seasonally adjusted by means of "Tramo-Seats", taking into account the presence of possible outliers and calendar effects. The model of each component (>20) has been individually validated (no automatic modelling). The absence of residual seasonality after aggregation has been checked. The data are benchmarked on annual totals of the non-adjusted series. The annual benchmarking is computed on each component by means of a multiplicative Denton procedure.

Bulgaria: Tramo-Seats on Demetra +. Total expenditure: no trading days effects, no Easter effect, ARIMA model [(1,0,0)(0,1,0)], outlier: AO[IV-2007], TC[IV-2008], AO[2009-I]. Total revenue: log-transformation, no trading days effects, no Easter effect, ARIMA model [(0,1,0)(0,1,1)], outlier: LS[I-2007].

Czech Republic: Tramo-Seats on Demetra +. Total expenditure: No trading days effects, no Easter effect, ARIMA model [(0,1,1)(0,1,1)], outliers: AO[2003-I], AO[2003-III], AO[2012-IV], TC[2001-IV]. Total revenue: No trading days effects, no Easter effect, ARIMA model [(1,1,0)(0,1,1)], outliers: AO[2003-I], TC[2007-III], AO[2008-III].

Denmark: X12-ARIMA. Total expenditure: Log-transformation, no trading days effects, no Easter effect, ARIMA model [(0,1,1)(0,1,1)], outliers: AO[2008-I], LS[2009-I], TC[2012-II].Total revenue: Log-transformation, trading days effects, no Easter effect, ARIMA model [(0,1,0)(0,1,1)], outliers: LS[2004-I], TC[2008-II].

Estonia: Tramo-Seats on Demetra +. Total expenditure: National calendar used, trading days effects (1 variable), , log, no Easter effect, ARIMA model [(0,1,0)(0,1,1)]. Total revenue: No trading days effects, no Easter effect, ARIMA model [(1,1,0)(0,1,0)], outliers: AO[2009-IV].

France: Seasonally adjusted data is transmitted. Working day adjustment is also done when relevant. An indirect method is used. Seasonal adjustment is done using X-12-ARIMA. For more information, you can read INSEE's methodology (starting on page 21) at the following link (the document is available in both English and French): http://www.insee.fr/en/indicateurs/cnat_trim/Pub_Meth/en_Insee%20M%C3%A9thodes%20n%C2%B0126.pdf.

Latvia: Tramo-Seats on Demetra +. Total expenditure: Log-transformation, no trading days effects, no Easter effect, ARIMA model [(0,1,1)(0,1,1)], outliers: LS[2009-II], LS[2006-IV], LS[2005-IV]. Total revenue: Log-transformation, no trading days effects, no Easter effect, ARIMA model [(0,1,0)(0,1,1)].

Malta: Tramo-Seats on Demetra+. Total expenditure: Tramo-Seats on Demetra+, no trading days effects, no Easter effects, ARIMA model [(0,1,1)(0,1,1)], Detected outliers: AO[2002-IV], AO[2003-IV]. Total revenue: Tramo-Seats on Demetra+, no trading days effects, no Easter effects, ARIMA model [(0,0,0)(0,1,1)], no outliers found.

Austria: Tramo-Seats on Demetra +. Total expenditure: no trading days effects, no Easter effect, ARIMA model [(0,1,1)(0,1,1)], outliers: AO[2004-IV]. Total revenue: Log-transformation, no trading days effects, no Easter effect, ARIMA model [(0,1,1)(0,1,1)], outlier: LS[2009-II].

Portugal: X13-ARIMA on Demetra+. A manual pre-treatment is performed by identifying and deducting one-off measures. Additional pre-treatment is applied for outlier detection and correction. The seasonal adjustment is applied to total revenue, expenditure except compensation of employees and compensation of employees. Total revenue: no trading day effect; no Easter effect; ARIMA model [(011)(011)]; outliers: AO[2003 IV], AO[2004 IV]. Expenditure except compensation of employees: no trading day effect; no Easter effect; ARIMA model [(001)(011)]; outliers: AO[2002 III], AO[2002 IV], AO[2009 III], LS[2012 I]. Compensation of employees: no trading day effect; no Easter effect; ARIMA model [(011)(011)]; outliers: SO[2012 II IV].

Slovenia: Tramo-Seats on Demetra +. Model for total revenue: Log transformation, 6 variables for trading days effects, Slovenia holidays, Easter effect (6 days), outliers: LS[2008-IV], ARIMA(0,1,0)(0,1,1) model. Model for total expenditure: Log transformation, no trading days effects, no Easter effect, 3 pre-specified outliers (AO[2001-I], AO[2011-I], AO[2013-I]),AO[2013-IV], ARIMA(1,1,0)(0,1,1) model.

Slovakia: Tramo-Seats on Demetra +. Total expenditure: no trading days effects, Easter effect (6 days), ARIMA model [(0,1,0)(0,1,0)], outliers: LS[2002-IV], AO[2009-I], LS[2002-IV]. Total revenue: Log-transformation, no trading days effects, no Easter effect, ARIMA model [(0,1,1)(0,1,1)], outlier: LS[2002-IV].

Finland: Tramo-Seats on Demetra 2.2. Pre-treatment is done if necessary, for example for outlier detection and correction. Total revenue and expenditure are estimated indirectly on the basis of their components and on sub-sector data.

Sweden: Tramo-Seats on Demetra +. Total expenditure: no trading days effects, no Easter effect, ARIMA model [(1,1,0)(0,1,1)], outlier AO[2010-IV]. Total revenue: Log-transformation, no trading days effects, no Easter effect, ARIMA model [(1,0,0)(0,1,0)], outlier: LS[2009-I].

United Kingdom: Adjustment using X-11 algorithm in X-13ARIMA-SEATS. Net borrowing: No trading day effects, no Easter effect, additive, ARIMA model [(0,1,1)(0,1,1)], outliers: LS[2009Q1], seasonal moving average: 3x5, trend moving average: 5. Total expenditure: No trading day effects, no Easter effects, additive, ARIMA model[(0,1,1)(0,1,1)], outliers: LS[2008Q3], seasonal moving average: 3x3, trend moving average: 5. Total revenue: no trading day effects, no Easter effects, log transformation, ARIMA model[(0,1,1)(0,1,1)], outliers: AO[2008Q3], LS[2009Q1], AO[2012Q2], seasonal moving average: 3x5, trend moving average: 5. For the purpose of calculation the EU aggregates, B.9 is derived indirectly. Annualised seasonally adjusted data is benchmarked on the annualised non-adjusted data.

Switzerland: The data reported is trend-cycle data. A Denton-Cholette method is used to temporally disaggregate annual data. The quarterly data is extrapolated using smoothed indicators.

Net financial transactions is derived using a direct method of seasonal adjustment for the EU-27 and EA-18 (Tramo-Seats on Demetra+).

As concerns GDP, no independent estimate is derived.

Revision policies/ country notes

The differing revision policies of EU Member States and EFTA countries reporting quarterly GFS data can be viewed in the QNFAGG and QFAGG manuals as well as in the respective metadata files on Eurobase. Revisions are generally accepted by Eurostat at any time.

The majority of countries revise quarterly QNFAGG, QFAGG and QGD data once more detailed sources used for the compilation of annual general government accounts become available; that is with the provision of quarterly data for the fourth quarter. A number of countries revise also previous years' data outside the transmission periods for annual data. Thus timing differences with annual tables arise.

Greece: D.9pay for 2013Q2 is mainly due to amounts transferred by Hellenic Financial Stability Fund (HFSF, classified in S.13), in particular to NBG, Eurobank and Alpha Bank for recapitalisation purposes as well as amounts for the resolution of First Business Bank. D.9pay for 2012Q3 is mainly due to amounts transfered by Hellenic Financial Stability Fund (HFSF, classified in S.13), in particular its transfer to Piraeus Bank (classified in S.12) to cover the funding gap between the assets and liabilities of Agricultural Bank of Greece that were transferred to Piraeus Bank. D.9 pay is due to amounts transferred by HFSF to S.12, in particular for the resolution case of New Post Bank as well as for the share capital increase of New Post Bank. Financial statements of HFSF for 2013 are available and they present estimations for the recoverable amounts. The relevant revisions are recorded in EDP Sept 2014 notification. Resolution cases of 2013 were revised since the audited estimations for the recoverable amounts of bad assets under liquidation are in the Financial Statements of HFSF for 2013. The relevant revisions are in line with EDP Sept 2014 notification tables.

Croatia: Due to the on-going process of quality improvement of the general government reporting system (including data sources) for quarterly GFS data, Eurostat publishes Croatian data with a provisional flag.

Switzerland: The data reported is trend-cycle data. A Denton-Cholette method is used to temporally disaggregate annual data. The quarterly data is extrapolated using smoothed indicators.

Please refer to the country notes on EMIS for more important information at country level.

Gross domestic product

Throughout this publication, gross domestic product (GDP) at current prices (nominal) is used, either using the non-seasonally adjusted or the seasonally and working-day adjusted forms as appropriate.

See also

Further Eurostat information

Publications

Main tables

Annual government finance statistics (t_gov_a)
Government deficit and debt (t_gov_dd)
Quarterly government finance statistics (t_gov_q)

Database

Annual government finance statistics (gov_10a)
Government deficit and debt (gov_dd)
Quarterly government finance statistics (gov_10q)

Dedicated section

Methodology / Metadata

Other information

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