2.
PUBLIC FINANCE AND ECONOMICS
General government fiscal balance
the fiscal balance is the difference between general
government revenues and expenditures showing how
much in a given year government spending is financed
by the revenues collected. a surplus occurs if, in a given
year, government collects more revenues that it spends.
conversely, when the government spends more than it
receives in revenues, there is a deficit. consecutive deficits
will lead to increasing debt levels and consequently to
higher interest payments.
overall fiscal balances among oecD countries have
continued to stabilize following the international financial
crisis. as the pressure for fiscal consolidation that
accumulated at the outset of the crisis continues to subside,
fiscal balances have improved: among oecD countries, the
average balance in 2015 reached -2.8% of GDP, improving
from the low of -8.4% in 2009. In 2015, norway had the
largest fiscal surplus, reaching 6% of GDP in tandem with
the country’s fiscal rules, followed by luxemburg (1.4%),
Korea (1.4%), turkey (1.3%) and chile (1.1%). In contrast,
the largest fiscal deficit was in Greece (5.9%), as growth
continued to falter, followed by Spain (5.1%), Portugal (4.4%),
the United Kingdom (4.3%) and the United States (4.2%).
as for 2016, fiscal balances ranged from a -4.5% deficit in
Spain to a 17.2% surplus in Iceland. Fiscal consolidation
in Greece has yielded a surplus of 0.7% of GDP for the first
time after reaching a trough in 2009 of 15.1% deficit of GDP.
Iceland’s large surplus was the product of extraordinary
revenues stemming from estate contributions from banks
involved in the country’s financial crisis, which amounted
to a 52% increase of overall fiscal revenues.
the primary balance – that is, the overall fiscal balance
excluding net interest payments on public debt – is a
particularly important feature of short-run sustainability,
as it illustrates to what extent a government can honour
its obligations without incurring additional debt. Side by
side with net interest payments for debt servicing, which
constitute an inflexible part of public budgeting, the
primary balance provides a clearer picture of the state of
fiscal management in a country.
In 2015, of the 2.8% of GDP deficit on average for oecD
countries, 2% of GDP represented net interest payments,
which resulted in an average primary balance of -0.8% of
GDP. the largest primary deficit in 2015 was in Japan (3.1%),
followed by Greece (2.6%), Finland (2.5%), Spain (2.4%) and the
United Kingdom (2.3%), while the largest primary surpluses
were in norway (3.1%), Iceland (2.9%) and turkey (2.9%).
net interest payments were the highest in Portugal (4.2%),
Italy (4%), Iceland (3.8%) and Greece (3.4%). also, from the
available information for 2016, Iceland had the largest
primary surplus among oecD countries with 20.6% of
GDP, a consequence of the aforementioned increase in
extraordinary revenues, and Greece registered a primary
surplus of 3.8%, while the largest increases in net interest
payments as a share of GDP between 2015 and 2016 were for
Finland, norway and the United Kingdom (0.1 p.p. for each).
56
For oecD accession countries in 2015, colombia had the
largest deficit, with 3.2% of GDP in 2015, followed by costa
rica (1.5%) and lithuania (0.2%).
Methodology and definitions
Fiscal balance data are derived from the OECD National
Accounts Statistics (database), based on the System
of National Accounts (Sna), a set of internationally
agreed concepts, definitions, classifications and
rules for national accounting. the updated 2008
Sna framework has been now implemented by all
oecD countries (see annex a for details on reporting
systems and sources). Using Sna terminology, general
government consists of central government, state
government, local government and social security
funds. Fiscal balance, also referred to as net lending
(+) or net borrowing (-) of general government, is
calculated as total government revenues minus total
government expenditures. revenues encompass
taxes, net social contributions, and grants and
other revenues. expenditures comprise intermediate
consumption, compensation of employees, subsidies,
property income (including interest spending), social
benefits, other current expenditures (mainly current
transfers) and capital expenditures (i.e. capital
transfers and investments). the primary balance is
the fiscal balance excluding net interest payments on
general government liabilities (i.e. interest payments
minus interest receipts). Gross domestic product
(GDP) is the standard measure of the value of goods
and services produced by a country during a period.
Further reading
oecD (2015), National Accounts at a Glance 2015, oecD, Paris,
http://dx.doi.org/10.1787/na_glance-2015-en
Statistics Iceland (2017), “General government finances
2016”, Statistics Iceland, reykjavik, http://www.statice.is/
publications/publication-detail?id=57984
Figure notes
Data for Brazil, costa rica and South africa are for 2014 rather than 2015.
2.1: Data for chile and turkey and are not included in the oecD
average because of missing time series or main non-financial
government aggregates. Data for china and russia are for 2014
rather than 2015.
2.2: Data for chile are not available. Data for turkey and are not included
in the oecD average because of missing time series. the value
of the primary balance for Iceland of 20.6 of GDP in 2016 is not
displayed in the graph.
Information on data for Israel: http://dx.doi.org/10.1787/888932315602.
Government at a Glance 2017 © oecD 2017
 2. PUBLIC FINANCE AND ECONOMICS
General government fiscal balance

2.1. General government fiscal balance as a percentage of GDP, 2007, 2009, 2015 and 2016

% 2007 2009 2015 2016

18

12

-6

-12

-18

E
R
R
X
R

A
F
L

RU I
S
U
N
N
K
N
A
T
EX
L
E
L
T
E
U
C
P
T
R
A
A
N
N
OE S
CD

K
N
A
L
L
L
D
R
L

CR
ZA
IS

CH

CO
BE
CH
PO

IR
PR

NZ
CZ

ES
AU

SW
IT

LV
GR
ES

AU

DN

LU
US

SV

BR
FR

TU
FI

CH
IS

DE

KO

NO
GB

HU
JP

NL

LT
SV

CA

Source: OECD National Accounts Statistics (database). Data for the other major economies of India and Indonesia are from the IMF Economic Outlook
(april 2017).
12 http://dx.doi.org/10.1787/888933531364

2.2. General government primary balance and net interest spending as a percentage of GDP, 2015 and 2016

Primary balance, 2015 Net interest, 2015

% Primary balance, 2016 Net interest, 2016

8

-2

-4
L
R

L
A
F
I
U
N
C
N
P
R
A
S
A
K
D

OE L

N
T
R
X
A
R
E
U
N
R
CD

K
A
T
N
T
L
E
E
L
EX

CR
ZA
IS
BE

CO
PO

IR

CH
PR

NZ
ES

CZ

AU

IT
SW
LV
GR

ES

AU

DN

LU
US
SV

BR
FR
FI

TU
IS

KO

DE
HU

NO
GB
JP

NL

LT
SV

CA
M

Source: OECD National Accounts Statistics (database).

12 http://dx.doi.org/10.1787/888933531383

Government at a Glance 2017 © oecD 2017 57

 From:
Government at a Glance 2017

Access the complete publication at:

https://doi.org/10.1787/gov_glance-2017-en

Please cite this chapter as:

OECD (2017), “General government fiscal balance”, in Government at a Glance 2017, OECD Publishing,
Paris.

DOI: https://doi.org/10.1787/gov_glance-2017-8-en

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