From 2014 to 2017, as financial conditions stabilised, the fiscal policy stance turned expansionary (by a little over half a percentage point per year on average). The primary surplus remained at around 1.5 per cent of GDP and the ratio of debt to GDP stabilised at just above 130 per cent.
We said last year, at the preliminary hearing on the 2017 Update to the Economic and Financial Document, that to plot a gradual, but assured, path to debt reduction from these levels was the ‘bare minimum’ required and that the commitment to ensure orderly public finances had to be credible in order to avert a widening of the gap between the cost of the public debt and economic growth and therefore a deterioration in debt dynamics.