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General Government Debt

Dáil Éireann Debate, Wednesday - 23 October 2019

Wednesday, 23 October 2019

Questions (96)

Michael McGrath

Question:

96. Deputy Michael McGrath asked the Minister for Finance the way in which the general government balance as a percent of GDP is calculated referring to table A1 of the draft stability programme update in view of the fact that 0.4% of nominal GDP of €352,850 million does not equal the general government balance of €1,235 million but instead equates to €1,411 million; and if he will make a statement on the matter. [43835/19]

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Written answers

The exchequer balance is the domestic budgetary aggregate which measures the net surplus or deficit position (the difference between cash inflows and outflows) of central government’s main treasury account, the Central fund. The general government balance (GGB) is an EU national accounting aggregate which measures the net surplus or deficit position of all arms of Government, i.e. central government, local authorities and non-commercial state bodies, as well as funds such as the Social Insurance Fund.

The rules for the compilation of the general government balance are set out in European System of Accounting (ESA) 2010 and are legally binding to all EU Member States.

Table A1 in the Stability Programme Update starts with the Exchequer balance and through a series of adjustments arrives at the general government balance.

The first set of adjustments converts the accounting basis of the Exchequer to the ESA 2010 standard. Next, the impact of the wider definition of general government such as extra-budgetary funds and non-commercial state sponsored bodies is incorporated.

The nominal GGB is therefore the sum of the items presented in the table. Taking into account the inherent uncertainty of forecasting, the results presented are rounded to the nearest €5 million. To calculate the GGB as a per cent of GDP the nominal GGB (rounded to €5 million) is divided by nominal GDP, which itself is rounded to the nearest €25 million.

The GGB as a per cent of GDP is presented to one decimal place.

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