A few days after the election

Debt: Ministry of Finance raises its forecast

Symbolic image(Bild: luzitanija - stock.adobe.com, Krone KREATIV)

The ÖVP-led Ministry of Finance has increased its deficit forecast for the 2024 budget to 3.3 percent of gross domestic product (GDP) just a few days after the National Council elections. This is above the Maastricht limit of three percent.

The reasons for this are a lack of economic recovery, the difficult-to-estimate effects of the flood disaster and the increase in the climate bonus, the department said on Thursday. In March, the deficit forecast was still 2.9 percent.

Specialist sector unsurprised
Fiscal Council head Christoph Badelt also considers the new forecast to be too optimistic. In the Ö1 "Abendjournal", he assumed that the true deficit would be "significantly higher". He assumes that it will be over 3.5 percent of GDP. Badelt believes that this will also be reflected in the fall economic forecast by Wifo and IHS, which will be presented on Friday.

Criticism of the federal government
For NEOS leader Beate Meinl-Reisinger, it is "telling" that Finance Minister Magnus Brunner (ÖVP) only admitted after the election that the immense budget gap was even bigger than previously known.

The federal government was responsible for a record deficit with its "whatever the cost" policy. What is needed now is a cash crash, followed by a brake on spending.

According to the Ministry of Finance's forecast, the debt ratio is now 79.3% of GDP, slightly higher than in 2023 (77.8%). GDP in 2024 is now assumed to be significantly lower, partly due to a poorer expected economy for 2024.