Luxembourg's Minister of Finance, Pierre Gramegna;
At the joint meeting of Luxembourg's Finance and Budget Committee (Cofibu) and the Committee on Budget Execution Control (Comexbu) of Friday 2 February 2018, Luxembourg's Minister of Finance, Pierre Gramegna, presented the budgetary situation of 2017 Q4.
According to SEC2010 accounting standards, the balance of the Central Administration amounted to + €364.1 million at the end of December 2017. This represents an improvement of + €216 million compared to the end of December 2016.
In terms of revenues, the result at the end of the fourth quarter is in line with previous quarters, i.e. more favourable than expected because of favourable economic conditions. Between December 2016 and December 2017, total revenues increased + €894 million, or + 5.7%. This favourable development also underlines the validity of the forecasts presented in 2016 regarding the impact of the tax reform.
On the expenditure side, operating costs remain under control, with a decrease of -€8.3 million compared to the same quarter of 2016. Direct investment expenditure increased by +€67.6 million, or + 4.3% compared to the same period in 2016 and in line with the government's ambitious infrastructure investment policy. Overall, expenses increased by + €678 million between December 2016 and December 2017, which represents an increase of +4.3%.
Revenue thus continues to grow faster than spending, which is a sign of a sustainable fiscal policy.
In 2017 Q4, the execution of the state budget in the sense of state accounting legislation shows a surplus of +€358.3 million for the central government. Total revenues accumulated amount to €13,754.8 million and already represent 104% of the 2017 voted budget. Expenditure stands at €13,396.5 million, i.e. 95% of the 2017 voted budget. Taking into account the proceeds of borrowing, the central government would show a surplus of +€1,987.5 million.
Pierre Gramegna, Minister of Finance, commented "The state budget situation at the end of 2017 confirms the success of the measures implemented by the government to balance public finances in recent years. Even as a result of substantial tax reform, increasing household purchasing power and business investment capacity, revenues are growing more favourably than expected. Expenditure is under control. The central government deficit is gradually being reduced and laying the right foundation for closing fiscal year 2017 well below previous projections. However, prudent management and fiscal discipline remain in place to continue to ensure this positive development."
