Austria threatens the third year of recession: experts warn of austerity!

Austria threatens the third year of recession: experts warn of austerity!

Austria faces a financial challenge: In 2025, a dramatic budget deficit of 4.2 percent of economic output threatens. This could lead to Austria in the third year of recession in a row, as the WIFO winter business forecast shows. WiFo director not only demands cuts, but a long-term plan for sustainable budget goals. The fundamental necessity of austerity measures is undeniable, whereby the amount of the savings must be strategically addressed. The IHS boss emphasizes the relevance of a five-year consolidation path for the upcoming government. Without savings, the state debt level will increase to alarming 84.5 percent of GDP by 2026, warn the economic economists.

fiscal challenges and austerity measures

The predictions show that the deficit this year is 3.7 percent of GDP this year and that the challenges are reinforced by the increasing number of pensioners and the subsequent indexation of social services. These aspects raise expenses in social areas such as health and education. The WiFo economist Felbermayr emphasizes that in order to correctly assess the austerity measures, it must also be considered with regard to the economy. Together with the IHS, he pleads for a review of socio -political services, such as the climate bonus to preserve an economic balance.

Overall, a consolidation requirement of 6 billion euros could arise to reduce the deficit from 4.2 to 3 percent of GDP. The disturbing scenario illustrates the need for a targeted and well thought -out household management in order to stabilize the country's economic foundations. The question arises as to how the future government wants to master this economic perspectives, while according to Statista, its expenses are distributed to a variety of departments.