Red alarm level: Austria's debts will explode to 91%by 2029!

Red alarm level: Austria's debts will explode to 91%by 2029!

Austria faces a significant financial dilemma that exists despite the announced austerity measures. As OE24 reports, the debt guards are skeptical about the effectiveness of the current consolidation measures. The fiscal council predicts that an additional savings requirement of 2.2 billion euros is required by 2029 to achieve an acceptable deficit.

The current financial situation shows a worrying development: the deficit will probably not decrease below 4% of GDP by 2029. In 2024, a deficit of 4.7% of GDP is expected, while the 2023 deficit is 4.3%. Even the progress that the Ministry of Finance is aiming for in 2026, whereby a decline is planned to 4.2% of GDP, appears ambivalent. emphasizes that the maastricht-upper limit of 3% of the BIP is clearly exceeded. The fiscal council also emphasizes that the forecasts of the Ministry of Finance are more optimistic than their own estimates.

outlook and challenges

The economic framework also tightens the financial difficulties. According to WIFO, a minimal economic growth of only 0.2% is forecast for 2024, while the inflation rate is to decrease from 11.2% in 2023 to 3.8% in 2024. For the coming years there will be a forecast trend with stagnating growth and persistently high deficits that limited the government's scope for action.

In order to reduce the debt rate sustainably, a budget deficit of around 2% of GDP is considered necessary. Another deficit over 4% could lead to problems not only in the national budget, but also at European level. The EU Commission is already planning a procedure for excessive deficits, the formal recommendation of which is expected on June 20th.