Fiscal accounts deteriorated sharply in 2014

The combination of weak revenues and robust expenditure generated a significant worsening of fiscal accounts last year: the primary result was negative for the first time ever (-0.6% of GDP), the total deficit reached more than 6.0% of GDP and the gross public debt increased more than 6 p.p. to 63.4% of GDP. The 2014 fiscal deterioration makes the ongoing adjustment in public accounts more indispensable and also more painful in terms of its short-term impact on economic activity. In spite of the worst-than-expected starting point, we expect the recently announced fiscal goals (1.2% of GDP primary surplus in 2015 and 2.0% in 2016 and 2017) to be fulfilled, preventing a further deterioration of public accounts ahead.

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