21 January 2019: Budget outturn 2018

The State’s fiscal deficit for 2018 stood at €76.1bn. This outturn is a clear improvement compared to the projected budget deficit of €85.7bn contained in the Initial Budget Act and the projected budget deficit of €80.0bn in the Supplementary Budget Act presented at the end of the year.

As a result, the State’s borrowing requirement for 2018 was €10.6bn less than the amount projected in the Initial Budget Act. The 2018 requirement stood at €192.0bn, including €76.1bn to finance the deficit and €116.6bn to redeem medium-and long-term State debt maturing during the year.


The financing resources came from AFT’s issuance of €225.4bn in medium- and long-term OATs. AFT also bought back €30.4bn in securities maturing in 2019 and 2020. The amount of debt net of buybacks stood at €195bn, in accordance with the Initial Budget Act.

Yields remained at historic lows, with negative yields on medium-term borrowing. The result, once again, was large issuance premiums received in cash, which increased other cash sources to €11.8bn, in contrast to the projection of €3.5bn in the Initial Budget Act.
These cash sources were used to reduce short-term debt. BTFs outstanding was cut by €13.6bn. BTFs as a percentage of outstanding debt fell to 6.4% at the end of the year, which is the lowest level since 2000.

Lastly, Treasury correspondents’ deposits were up by €9.9bn compared to the end of 2017, instead of increasing by €1.1bn, as projected in the Initial Budget Act. As a result of all these changes, the amount of cash available in the Treasury’s account at the end of the year was up by €11.1bn, in contrast to the decrease of €2.1bn projected in the Initial Budget Act.

These good results for the 2018 State fiscal balance enhance the Government’s ability to attain its goal of keeping the public deficit clearly below 3% of GDP for the second year in a row. This deficit figure will be published at the end of March 2019 and will factor in the balances of social security funds and local governments.

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