The Austrian Finance Minister Gernot Bluemel will hold a press conference in Vienna on February 12, 2021. REUTERS / Lisi Niesner
The Austrian government is adjusting its forecast for tax revenue and public spending for 2021, resulting in a larger budget deficit as lockdowns put a brake on economic growth and force the government to expand support to the hardest hit economic sectors.
The planned payments amount to 97.4 billion euros, an increase of 5.5 billion euros (6.59 billion US dollars) from the previous estimate, the Treasury said on Sunday.
In the meantime, tax revenues are likely to be 2.6 billion euros below expectations of 72.5 billion euros, increasing the forecast budget deficit by 8.1 billion euros to 30.7 billion euros.
Overall, the state’s debt ratio will rise 1.7 percentage points to 89.6% of gross domestic product, the state said.
“We are adjusting the budget to secure more resources for health and economic aid,” said Finance Minister Gernot Bluemel, adding that the move follows budget revisions in neighboring Germany and Switzerland.
The action comes after the Austrian Wifo Institute, which provides forecasts for the government, announced in March that in a “lockdown scenario” the country’s GDP would only grow by 1.5% this year, which is below a estimated 2.3% growth if the lockdowns were lifted soon.
Austria is currently planning a major easing in mid-May, but the government said these budget changes were necessary given the ongoing crisis.
“I’ve always said if more money is needed there will be more money,” said Bluemel.
($ 1 = 0.8345 euros)
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