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The state's deficit from last year has markedly shrunk. Illustration photo: European Commission 

Gramegna (DP) on Monday presented a monthly overview of state financing to members of parliament. With April 2020 marked by the first wave of the pandemic and the country under lockdown, the situation was much improved last month.

“I am delighted with the now confirmed recovery of our public finances,” Gramegna said in a statement, although adding that the dramatic increase in revenue must be seen in the context of plummeting tax income last year.

“The budget balance is clearly improved compared to 2020 and is almost in equilibrium as of 30 April 2021,” the finance minister said, warning that this would not necessarily translate into an end-of-year positive result.

Revenue from direct taxation grew 12.5% (or €376.9m) to reach €3.3bn. Revenue from customs and excise tax was up 6.4% (€31.3m) to reach €531.4m. The biggest drop in spending was seen in the category of benefits, such as unemployment, whichh decreased by €358.4m (-32.7%) in April 2021 compared to the same time last year when many businesses had to shut their doors because of lockdown measures.

Direct and indirect investment, on the other hand, was up 11.4m (2.1%).

The state budget--the so-called “Administration centrale”--was €29m in deficit at the end of April 2021, compared to a deficit of €1.63bn the same time last year.

“The results observed at the end of April--and the central administration balance now close to equilibrium--confirm that the improvement in the budgetary outlook presented in the stability and growth programme a few weeks ago is indeed underway,” Gramegna said.

“Thanks to the gradual opening of our economy, combined with the rapid progress of the vaccination campaign, I am confident that economic activity is more and more returning to normal and that the recovery launched will bear fruit for businesses and all citizens,” he said.