Ministry surprised

Budget deficit far above Maastricht target this year after all

The Austrian National Bank does not see any negative effects for the domestic financial center due to the crisis-ridden Credit Suisse.

(Bild: APA/HELMUT FOHRINGER)

According to a budget outlook published by the Fiscal Council on Wednesday, Austria's Maastricht deficit is likely to be well above the Maastricht limit of three percent. The data is "incomprehensible" for the Ministry of Finance. The opposition accuses the government of failure.

For 2024, the committee expects a general government budget deficit of 3.4 percent of gross domestic product (GDP) and a deficit of 3.2 percent for 2025. However, Finance Minister Magnus Brunner (ÖVP) only expects a deficit of 2.7 and 2.8 percent respectively.

Finance Minister Magnus Brunner does not understand why the Fiscal Council's forecast differs so greatly from other institutions such as the IMF, Wifo and the IHS.

(Bild: APA/GEORG HOCHMUTH)

According to the Council, the significant deterioration is mainly due to new measures taken by the federal government. These include the extension of the electricity price brake, the renewed suspension of energy taxes, the housing package and the delayed, disproportionately high increases in expenditure due to the high inflation of recent years. In some cases, the Fiscal Advisory Council was not even able to take some of these parameters into account in its December forecast. This is why the current forecasts also differ from the previous ones.

Ministry wants to "precisely analyze" new data
Although the Ministry of Finance will reportedly also revise its own data slightly upwards, the deficit of over three percent that has now been published is "incomprehensible", it says. This is because the Fiscal Council is revising its own forecasts from December "by more than one percentage point".

"This is a significant revision - especially because all other institutions - IMF, Wifo, IHS, European Commission - continue to assume a deficit of less than three percent in their current forecasts." The BMF will therefore "carefully analyze" why the Fiscal Council is the only institute to assume a higher deficit.

Opposition identifies government failure
NEOS and SPÖ see a failure of the government. In a press release, NEOS budget spokesperson Karin Doppelbauer finds the "still twice as high inflation as in other EU countries and the current forecast of the Fiscal Council" "alarming". She calls for a spending and debt brake as well as structural reforms in the largest spending blocks such as federalism and pensions. The words of SPÖ parliamentary group chairman Philip Kucher were also harsh: The government would "burn the most money, achieve the worst results and then cheer itself for it."