���������ֳ�

Better-than-expected GDP growth and public finance outturns in western Europe in 2022 do not point to further widespread improvement in fiscal metrics in 2023, in ���������ֳ�’ view. We forecast a more mixed performance and a wider median deficit. The mixed picture in terms of fiscal balances carries through to public indebtedness. Looking at the expected cumulative change in the government debt ratio between 2019 and 2023, in 14 countries out of 22, the debt ratio is still expected to be higher than its pre-pandemic level. The variation in fiscal performance is being reflected in sovereign ratings. Last year’s improvement in the public finances was driven by revenues growing much faster than expenditures. The close correlation between revenue and nominal GDP growth implies that the improvement in government balances as a share of GDP was due to falling spending/GDP ratios.