Complex sentence: Government revenues are shrinking because of a decline in federal transfer payments, though expenditures are down (through government pension reform and a reduction in the number of public employees), they have increased relative to GDP, necessitating further measures to reduce debt in the future.
Split into simpler sentences: Government revenues are shrinking because of a decline in federal transfer payments. Though expenditures are down (through government pension reform and a reduction in the number of public employees), they have increased relative to GDP, necessitating further measures to reduce debt in the future.