Interest payments increase – Budget 2023 brings minus 17 billion euros

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The Austrian budget for 2023 was published on Wednesday by the Ministry of Finance. The Maastricht deficit will amount to 2.9 percent of economic output next year and is expected to fall to 1.6 percent by 2026. Debt rises to 367 billion euros, but the share of gross domestic product falls slightly from 78.3 to 76.7 percent. Striking are the exploding interest payments, which will double from 4.3 to almost nine billion euros in 2023.

The administrative net financing balance of the federal government amounts to minus 17 billion euros, compared to 2022 this is an improvement of 6.1 billion euros. Payments will increase by 7.6 to 115.1 billion euros compared to 2022 and deposits by 13.7 to 98.1 billion euros.

Schuldenberg grows to 400 billion
From a contemporary perspective, there will be additional costs for interest payments of no less than eleven billion euros in 2026. That is twice as much as is invested in safety or in the ecological transformation of the industry. The debt-to-GDP ratio, measured as a percentage of GDP, will fall to 72.5 percent in 2026, but in absolute terms the debt mountain will rise to nearly EUR 400 billion.

Lots of money to make the economy more ecological
Finance Minister Magnus Brunner (ÖVP) has defined three priorities for his first budget. In addition to crisis management, there are points for attention with a view to the future. On the one hand, the government invests in security – military, social and economic – and on the other hand, with a lot of money, the ecological transformation of the economy is promoted in order to reduce dependence.

Given the difficult economic situation and the escalating war in Ukraine, the budget is full of uncertainty. On the eve of his budget speech, Brunner spoke of a “volatile situation”. His department has used current economic forecasts to prepare the budget, but it is not known whether these will hold. Despite the crisis, according to Brunner, the budget also sets priorities for the future.

Zero shortage is not a problem at the moment
He cannot now speak of a zero deficit, “but we can set priorities” that strengthen purchasing power and help companies and people through the crisis as best as possible. The budget for 2023 is not just a crisis budget. The government is spending a lot of money to support the industry in its ecological transformation, and it is investing in security — in military, economic and security of supply, Brunner said. The economic transformation will be financed next year with 863 million euros, to a total of five billion euros in 2026.

Five billion euros more for the army
The army will also receive five billion euros more by 2026. Next year, 680 million euros will be added, which corresponds to an increase from the current 2.64 billion (0.6 percent of GDP) to 3.32 billion euros (0.7 percent of GDP). The army budget will increase to 3.7 billion euros in 2024, 4.2 billion euros in 2025 and 4.7 billion euros in 2026.

Losing weight due to a cold costs 1.5 billion euros
The abolition of cold progression will cost the state 1.5 billion euros next year. The implementation of the health care reform presented in May 2022 amounts to 0.8 billion euros in 2023 and a total of 1.7 billion euros by 2026. The automatic valorisation of benefits will amount to 363 million euros in 2023 and 1 in 2026. .3 billion euros. And for pensions alone, 2.7 billion euros more has been budgeted for the coming year. Nearly 500 million euros in additional costs are planned for 2024 for foreign affairs and asylum.

On the other hand, compensation for the Covid 19 crisis management will fall sharply and fall from 6.6 (2022) to 2.7 billion euros next year. The Justice Department will receive about EUR 220 million more, which will, among other things, finance 120 additional posts for prosecutors, judges and IT experts in the field of cybercrime. The Court’s resources increase by EUR 4.8 million to EUR 42.2 million. This should also finance the additional tasks related to party law.

Source: Krone

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