Ten Worst Budgets of 2008

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2008 was a bad year for almost every country as the economic slump started in 2008 and revenues started falling. Europe was among the most poorly hit regions with most European countries having a budget deficit in 2008.

Highlighted below are ten worst budgets of 2008.

1. Iceland

General Government Deficit or Surplus as % of GDP: -13.5

In 2008 headlines like “Iceland Goes Bankrupt” were regularly doing the rounds due to the financial crisis the country was going through. The sad phase reflected in its budget as well, as the country was not able to maintain its revenues. Many companies and banks, including the Glitnir bank were nationalized during this period.

2. Greece

General Government Deficit or Surplus as % of GDP: -9.9

Greece was expecting a deficit, but not as wide as it ended up having. The country had been having trouble meeting standards set by the EU. Recession had affected social security and tax revenues resulting in lower than expected overall revenue that reflected in its budget.

3. Ireland

General Government Deficit or Surplus as % of GDP: -7.3

2008 saw Ireland’s first carbon budget. Ireland’s economy had started falling in 2007 with 2008 breaking the camel’s back, as revenues fell lower than expected. Some tax changes were made to give the economy a new lease of life; however, nothing worked as Ireland wrapped up the year with a huge deficit.

4. United States

General Government Deficit or Surplus as % of GDP: -6.6

Every kind of expenditure, from Medicare to defense to social security was increased in 2008; however, like any other year, revenues fell short that resulted in the US having a huge deficit of 6.6%. Most of its revenue was generated through tax sources including income tax and corporate tax.

5. United Kingdom

General Government Deficit or Surplus as % of GDP: -5

The UK was among the worst hit countries by the economic slump that started in 2008. UK’s 2008 budget was aimed towards balancing revenues while continuing to provide people with great services.

6. Spain

General Government Deficit or Surplus as % of GDP: -4.5

Unemployment soared in Spain resulting in less revenue in income tax and more expenditure. The situation was totally opposite in 2007, which was a better year for the country that saw one of its worst financial years in 2008.

7. Israel

General Government Deficit or Surplus as % of GDP: -3.8

The educational reform and military expenses soaked most of Israel’s budget in 2008 resulting in Israel having a huge deficit.

8. Hungary

General Government Deficit or Surplus as % of GDP: -3.7

Slow than expected growth poorly hit Hungary, like most other European countries. With falling revenues the government could not do much but have a negative budget.

9. Poland

General Government Deficit or Surplus as % of GDP: -3.7

Poland’s 2008 budget was prepared after huge surveys so that the country could prepare for the worst. A huge chunk of revenue was spent in social security, justice, education and healthcare.

10. Portugal

General Government Deficit or Surplus as % of GDP: -3.7

Portugal was warned for its budget deficit as things were not looking to change in the near future. The country prepared a budget that was planned to bring it down to 3% or lower (EU’s requirement) however, experts believed that the country could not control its expenses better and carried huge risks.

Further reading: Corporate Governance | Audit | Performance Improvement

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