In August 2022 the State Sector working balance is provisionally estimated at Euro 650 million, posting a decline of about Euro 8,400 million in comparison to the corresponding month of 2021 (Euro +9,050 million). After deducting the 2021 EU payment of Euro 8.954 million, as an up-front disbursement of the Recovery Fund grants (a share of 13 per cent), the working balance shows an improvement of about Euro 500 million.
In the first eight months of the current year, the working balance is estimated at Euro -33,700 million, corresponding to an improvement of about Euro 36,400 million with respect to the same period of the previous year (Euro -70,169 million).
The updated estimate of the state working balance in July 2022 is available on the State General Accounting Department website.
Comment
Aside from the inflow of the first tranche of the Recovery Fund grants, compared to the previous year the improvement in the State working balance in July 2022 has benefited from higher fiscal revenues, thanks to self-assessment taxes, social contributions, VAT and other indirect taxes. It is worth recalling that in 2021 self-assessment taxes payment had been postponed to September for tax-payers who apply Tax Compliance Indicators (so called ISA).
On the expenditure side, social security funds’ withdrawals for payment of the family cheques (so called “Assegno unico e universale”), a loan of Euro 200 million in favour of the Ukraine Republic as per decree-law 50/2022, and a transfer of about Euro 1,200 million from the State to CSEA to mitigate the effects of the increase of energy prices contributed to higher disbursements. It is also worth mentioning the allocation of the last tranche of the loan to GSE for the acquisition, storage and re-selling of natural gas, as envisaged by article 4 of decree-law 80/2022.
The interest expenditure on Government bonds has decreased by Euro 150 million with respect to August 2021.