State finances recovered quickly after the beginning of the Covid-19 pandemic, as did the country’s overall economic growth. However, the ongoing war in Ukraine and the global supply chain issues start being reflected in the state’s finances. Similarly, implementing the measures from the tripartite agreement affects the government’s finances.
The Council of Public Finances estimates that the situation will stabilise again in 2023. Nevertheless, deficits are expected until at least 2026.
The social security reserves are experiencing a significant decrease, the Council further notes. €1.2 billion, recorded in 2019, are expected to have gone down to €242 million by 2026.
In terms of revenue, the government has steadily increased its income by 6% each year since 1995, with the exception of the pandemic year of 2020. Tax revenue makes up 62% of the government’s income.
