|
Debt developments
Reducing the debt ratio quickly enough is still a
key element of the government's strategy for coping with the budgetary
consequences of population ageing.
Even taking into account the consolidation of the
Rail Infrastructure Fund, the debt ratio fell back to 84.9% in 2007. The
fiscal strategy that has been put in place implies that, in the coming
years, the primary surplus will increase by about 0.2 percentage point a
year, rising from 3.7% in 2008 to 4.3% in 2011. As a result of the
positive debt reduction process thus launched, the debt ratio will come
down to 71.1% in 2011. This estimate does not take account of any
potential proceeds from privatisations or other operations that reduce
the public debt. It is assumed that the impact of so-called exogenous
factors tends to push the debt up marginally.
According to the growth and interest rate
assumptions, the primary surplus needed to stabilise the debt ratio
ranges from zero to 0.5% of GDP at most in the 2008-2011 period. The gap
between the current primary balance and the target primary balance
underlines the soundness of the scenario outlined for reducing the
public debt.
|
TABLE 5
Movement in the general government debt ratio |
|
% of GDP |
2006 |
2007 |
2008 |
2009 |
2010 |
2011 |
|
1. Gross debt |
88,2 |
84,9 |
81,5 |
78,1 |
74,7 |
71,1 |
|
2. Change in gross debt ratio |
-3,9 |
-3,3 |
-3,4 |
-3,3 |
-3,3 |
-3,6 |
|
Contributions to changes in
gross debt |
|
3. Primary balance |
4,3 |
3,7 |
3,7 |
3,8 |
4,1 |
4,3 |
|
4. Interest expenditure |
4,0 |
3,8 |
3,7 |
3,5 |
3,4 |
3,3 |
|
5. Stock-flow adjustment |
0,7 |
0,2 |
0,3 |
0,2 |
0,2 |
0,2 |
|
p.m. implicit interest rate on debt |
4,5 |
4,5 |
4,5 |
4,5 |
4,5 |
4,6 |
|
