Ukraine war: Austria now expects more debt and deficits
The war in Ukraine and its economic consequences also have an impact on the Austrian state budget. As the Ministry of Finance announced on Tuesday evening, a supplementary budget is now necessary. Both for the current year and for the budget framework plan 2022 to 2025.
The economic slump leads to a drop in revenue of around one billion euros. In addition, there are around four billion euros from relief packages, especially in the case of energy. Around 1.6 billion euros have been budgeted for the strategic gas reserve, and the costs for refugee care will amount to several hundred million euros.
higher debt ratio
Brunner did not want to commit to an exact euro amount when asked. But, taken together, the shortfall in income and additional expenditure would increase the budget deficit from around two to around three percent of gross domestic product. That means a deficit of at least twelve billion euros instead of the previous eight billion. The government debt ratio will also rise again as a result, from the last forecast of 79 to around 80 percent of GDP.
On ongoing measures, which are now being considered together with the social partners, Brunner wants to have the abolition of cold progression checked by experts from his company once again. That’s not entirely new. The end of this creeping tax increase, which flushes tens of millions into the state coffers year after year, was already announced in the government program. “In view of high global inflation, the state cannot compensate 100 percent for every development, but it must help where it is necessary and cushion the worst effects on the economy and the population‘ says Bruner.