(7)

Based on data provided by the Commission (Eurostat) in accordance with Article 14 of Regulation (EC) No 479/2009 following the notification by Malta before 1 April 2012 and on the Commission services’ 2012 autumn forecast, the following conclusions are warranted: — After the peak in 2008, the general government deficit has narrowed gradually, reaching 2,7 % of GDP in 2011, below the 3 % of GDP reference value. The significant improvement compared to 2010, when the general government deficit was 3,6 % of GDP, was mainly due to an increase in revenues by 0,7 % of GDP. The impact of net deficit-reducing one-off measures in 2011 is estimated in the Commission services’ 2012 autumn forecast at 0,7 % of GDP. The structural balance, i.e. the cyclically-adjusted budgetary balance net of one-off and temporary measures, is estimated to have improved by 1 percentage point of GDP in 2011, above the requested effort of at least ¾ % of GDP recommended by the Council. — The Commission services’ 2012 autumn forecast projects the deficit to fall further to 2,6 % of GDP in 2012, mainly thanks to revenue-increasing measures, most of which are considered to be of a one-off nature; the net deficit-reducing impact of one-offs is estimated at 1 % of GDP. On a no-policy change basis, i.e. without incorporating the consolidation measures contained in the 2013 budget, which was adopted after the cut-off date of the forecast, the general government deficit is projected to widen to 2,9 % of GDP in 2013, before narrowing again, to 2,6 % of GDP, in 2014, thus remaining below the 3 % of GDP reference value over the forecast horizon. The April 2012 Stability Programme targets lower deficits, of 2,2 %, 1,7 % and 1,1 % of GDP in 2012, 2013 and 2014, respectively. The difference between the Commission services’ 2012 autumn forecast and the Stability Programme target for 2012 is mainly explained by more dynamic revenue growth in the latter. — In the years after the 2011 deadline set by the Council, the budgetary projections of the Commission services’ 2012 autumn forecast point to no improvement of the cyclically-adjusted budget balance, net of one-off and other temporary measures, in 2012 and to an improvement of ¼ percentage point of GDP in 2013. This is below the 0,5 % of GDP benchmark for the adjustment towards the medium-term budgetary objective required under the preventive arm of the Stability and Growth Pact, in particular Council Regulation (EC) No 1466/97 of 7 July 1997 on the strengthening of the surveillance of budgetary positions and the surveillance and coordination of economic policies (5). This slow adjustment is projected against broadly balanced cyclical conditions, i.e. the output gap is estimated to be close to zero. At the same time, the composition of growth is expected to be relatively tax-revenue-poor. Especially in 2012, economic growth is driven by net exports, while domestic demand is projected to be rather weak compared to the past trends. In 2014, the improvement is projected to amount to ½ percentage point of GDP. Furthermore, in 2012, the real growth rate of government expenditure, net of discretionary revenue measures, is projected to be below the benchmark reference medium-term rate of potential GDP growth, as defined in Article 5 of Regulation (EC) No 1466/97. However, on a no-policy-change basis, the real net growth in expenditure would significantly breach this benchmark reference rate in 2013 and 2014. — General government gross debt as a share of GDP has been on an increasing trend since 2008 and reached 70,9 % of GDP in 2011. The Commission services’ 2012 autumn forecast projects the debt ratio to continue increasing to reach 72,4 % of GDP in 2012, 73,1 % of GDP in 2013 and 72,8 % of GDP in 2014. By contrast, the 2012 Stability Programme projects the debt ratio to start decreasing after 2011, to 67,4 % of GDP by 2014. The difference between the two projections is due to a lower primary surplus and higher stock-flow adjustment in the autumn forecast.