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Stability and Growth Pact

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Before the introduction of the Macroeconomic Imbalance Procedure (MIP), the EU monitored economic developments within the economies of member states through the Stability and Growth Pact (SGP). This framework now operates in tandem with the MIP and sets thresholds on both government deficits (3% of GDP) and government debt levels (60% of GDP). The reporting of the Excessive Deficit Procedure (EDP) statistics, which is a requirement for all EU member states, forms part of the preventive arm of the SGP. The corrective arm of the Stability and Growth Pact ensures that member states adopt appropriate policy responses to correct excessive deficits (and/or debts) by implementing the EDP.

General Government Debt (% of GDP) Pact Threshold
200723.90847963002460
200842.406101536036160
200961.54370741400560
201086.063025485878660
2011110.34500808430960
2012119.62565717898660
2013119.41053472287760
2014104.51736935714460
201576.931208450682760
201672.792196481449260

Source publication: Government Finance Statistics, Annual

Get the data: StatBank GFQ13

This indicator is part of the SGP which was introduced in 1993. It is the same as Headline Indicator 9 from the MIP Scoreboard, with the same threshold. Ireland has breached the 60 percent threshold of the Stability and Growth Pact for GG Debt as a percentage of GDP since 2009, although this ratio has declined in value since 2013. It should be noted that the main driver of the decrease in the level of this indicator in 2015 was the large increase in Ireland's GDP as there was only a small decrease in the level of Government Debt in this year. Again in 2016 the decrease in the value of this indicator was caused by growth in GDP, as there was actually a slight increase in the level of government debt.

Annual Gross Debt (% of GDP) Annual Net Debt (% of GDP) Pact Threshold
200723.90847963002414.265068305595360
200842.406101536036122.528174865250660
200961.54370741400536.536211690976360
201086.063025485878666.166019226293860
2011110.34500808430978.570763880003360
2012119.62565717898686.642819304970960
2013119.41053472287789.551245431200460
2014104.51736935714485.950302768610860
201576.931208450682765.835489509155260
201672.792196481449263.729097718167660

Source publication: Government Finance Statistics, Annual

Get the data: StatBank GFQ13

Net government debt is gross government debt minus the value of the financial assets corresponding to the categories of financial liabilities which comprise gross government debt. The gap between gross and net debt peaked in 2012 at 33% of GDP but has declined steadily since then to stand at 9.1% of GDP at the end of 2016. In the year 2016, general government net debt increased by €3.1 billion to €175.6 billion (63.7% of GDP). This increase was composed of a €1 billion reduction in GG Debt and a fall of €4.1 billion in cash deposits and debt security assets over the same period.

Annual General Government Surplus / Deficit as % of GDP (left axis)Pact Threshold (left axis)Annual Expenditure (right axis)Annual Revenue (right axis)
20070.289043721666109-370.81571.385
2008-6.99897739619506-378.50465.363
2009-13.7962456715874-379.95756.488
2010-32.0503869724256-3109.08855.377
2011-12.7289329355178-379.62257.736
2012-8.03823172572496-373.60359.493
2013-6.11210329565497-372.53361.513
2014-3.64917727733028-373.04265.943
2015-1.89591546232021-375.57270.603
2016-0.692027710139458-374.55372.645

Source publication: Government Finance Statistics, Annual

Get the data: StatBank GFA01, StatBank N1605

Ireland ran a small general government surplus of 0.3% of GDP in 2007. From 2008 to 2014, Ireland consistently exceeded the 3% of GDP threshold for government deficits set out in the SGP. These deficits increased until 2010 due to several factors. They were partly caused by declining revenue, which steadily fell until 2010. A significant cause of the fall in revenue was due to a sharp decline in the property development sector. Expenditure also increased until 2010. A major component of these increases was exceptional capital support for domestic financial institutions in 2009 and particularly in 2010. General government deficits fell after this point with increases in overall revenue and decreases in expenditure. In 2015 the general government deficit fell within the SGP threshold for the first time since 2007, and this trend was continued into 2016 where the deficit was reduced to 0.7% of GDP.

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