Austria increases budget deficit projection for 2024, 2025
Date
11/6/2024 6:51:41 AM
(MENAFN) The Austrian government's budget deficit for the years 2024 and 2025 is expected to exceed the Maastricht criteria, with projections of 3.9 percent and 4.1 percent of GDP, respectively, according to a press release issued by the country's fiscal council on Tuesday. These figures mark a significant increase from earlier forecasts, which had estimated a 3.4 percent deficit for 2024 and 3.2 percent for 2025, as reported by Austrian broadcaster ORF.
Additionally, Austria's government debt ratio continues to rise, with the fiscal council projecting it will reach 79.7 percent of GDP in 2024 and 81.6 percent in 2025. These levels are considerably higher than the Maastricht criterion of 60 percent, which sets limits on member states' debt-to-GDP ratios within the European Union. The council noted that the growing deficit and rising debt are primarily the result of increased government spending, a downturn in the economy, and recent tax cuts.
The fiscal council warned that the country may soon face a European Union deficit procedure, as the deficit figures significantly surpass the EU's fiscal limits. Despite these concerns, Christoph Badelt, head of the fiscal council, emphasized the need for urgent budget consolidation. However, he cautioned that any efforts to address the budget deficit should be carefully balanced to avoid hindering Austria's economic recovery, which remains fragile due to the ongoing recession.
Overall, the fiscal outlook for Austria appears challenging, with rising deficits and debt levels. The government will likely need to take corrective fiscal measures in the coming years, but those measures must be crafted in a way that supports, rather than undermines, economic growth and recovery.
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