The government balance and debt are the main indicators of the state of government finances.

Local Government Deficit of 3 Billion Euros

The local government had a deficit of more than 3 billion euros in 2024. This deficit is mainly with municipalities, while provinces recorded a surplus. For 2023, the preliminary figures for the local government show almost a balance between expenditures and revenues. The largest part of the government deficit in 2024 came from the central government and social security funds, together 9 billion euros.

Government Expenditures Rise to 500 Billion Euros

Government expenditures increased by over 8 percent in 2024 compared to the previous year, which is an increase of 39 billion euros. Only in the corona year 2020 did government expenditures increase more in one year. Over five years, expenditures have increased by over 150 billion euros. While the government spent 349 billion in 2019, last year the total was 500 billion euros. Expenditures rose faster than GDP, causing expenditures as a percentage of GDP to rise from 42.1 percent to 44.1 percent over five years.

The higher expenditures are partly related to rising prices, which affect wages, purchases of goods and services, and benefits. The Supreme Courts ruling on box 3 in the summer of 2024 led to 4 billion euros in additional government burdens for 2024. As the energy cap scheme was not continued in 2024, subsidies provided decreased by 4 billion euros.

Government revenues increased by 30 billion euros in 2024. Taxes and premiums account for almost 90 percent of revenues. The majority of the increased revenues came from tax and premium revenues, 25 billion euros. Especially income tax filled the state treasury extra in 2024, with an increase of 11 billion euros compared to 2023. However, dividend tax was lower. Due to a rate adjustment in box 2 of income tax in 2024, director-majority shareholders paid extra dividends in 2023, taxed at the lower 2023 rate.

Debt Rises to 492 Billion Euros, Debt Ratio Down

Government debt amounted to 492 billion euros at the end of 2024. This is an increase of 9 billion euros compared to the end of 2023. The increase was mainly due to the provision of a 13 billion euro loan to national grid operator Tennet, which is fully state-owned. The governments 12 billion euro deficit had little effect on the debt. Not all expenditures for 2024 were paid in 2024 (such as compensation for box 3), so they did not need to be financed in 2024. There were also receipts in 2024 attributed to previous years (such as dividend tax or overpaid subsidies).

As a percentage of GDP, government debt decreased in 2024. GDP grew faster than debt. The debt ratio was 43.3 percent, which is 1.9 percent lower than at the end of 2023. In the past 30 years, only the debt ratio at the end of 2007 was lower.