Deviations between Government Debt and Changes in Government Deficit, Why They Tend to Persist

Anotace: Government deficit and debt represent one of the most prominent statistical aggregates playing a major role in the fiscal surveillance and in the assessment of fiscal sustainability. Achieving fiscal sustainability commonly requires a certain level of surplus/deficit to maintain a sustainable level of debt. When doing so, a close relation between both key aggregates is implicitly expected. Long-term evolution of both aggregates however does not confirm that it is the case. By analysing the data for the period 2001–2020 and by discussing the underlying statistical methodology, the paper aims to scrutinise the key factors contributing to rather counterintuitive findings where the debt is growing at a faster pace, even in the long-term, than the government deficit/surplus would suggest. The paper thus discusses the methodological causes behind the observed deviation.