Austria is slowly recovering from the financial burden of the corona pandemic. The federal government plans a deficit of 15.4 billion euros for 2023. SPÖ and NEOS see “tax waste” and a “double game”.
The federal government reports a projected deficit of 3.2 percent or 15.4 billion euros to the European Commission for 2023. The stability program will not show a sharp fall to 1.3 percent of GDP in 2026 until next year. The debt ratio is expected to fall from 77 percent of GDP in the current year to 71.4 percent in 2026, i.e. only slightly more than in 2019 (70.6 percent) before the outbreak of the COVID-19 pandemic and the energy crisis.
The stability program reflects national medium-term budget plans and must be submitted to the European Commission and the National Council by the end of April 2023. It is based on the current March 2023 WIFO economic forecast, which shows weak economic growth of 0.3 percent for the full year 2023 with a “remaining robust labor market”.
Brunner: ‘We want to halve the backlog’
According to the stability program, the deficit was 3.2 percent last year, where it will remain in 2023 “because of the crisis”. The Ministry of Finance expects 1.6 percent for 2024. According to the current forecast, this will be 1.4 percent in 2025 and 1.3 percent in 2026. Finance Minister Magnus Brunner (ÖVP) has set the goal that Austria’s deficit should be well below 3 percent of GDP from 2024. “We want to halve the deficit to put Austria on a sustainable fiscal path in the medium term,” said the minister.
The debt ratio is expected to rise from 78.4 percent last year and 77 percent this year to 75.1 percent in 2024, 73.3 percent in 2025 and finally 71.4 percent in 2026. According to Brunner, the crisis management measures had taken a heavy toll on the national budget. However, the costs and the necessary support could be met “because Austria has been pursuing a prudent fiscal policy for years”.
Criticism from SPÖ and NEOS
SPÖ budget spokesman Jan Krainer accused Finance Minister Brunner of a “fundamentally wrong, because anti-social and anti-performance budget policy”. Good fiscal policy requires an end to the “meaningless waste of taxpayers’ money” (ie billions in subsidies to businesses) on the expenditure side and ensuring fiscal fairness on the revenue side.
Karin Doppelbauer, NEOS budget and finance spokeswoman, said in light of the deficit reported to Brussels: “The finance minister is playing a double game with the taxpayer.” He continuously ensures the return to a sustainable fiscal path. However, the numbers paint a very different picture.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
