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Public Finances Under Substantial Consolidation Pressure. Medium-term Budget Projection 2025 to 2029

Author

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  • Simon Loretz
  • Hans Pitlik

    (WIFO)

Abstract

The medium-term budget projection for 2025 to 2029 indicates a persistently high need for fiscal consolidation in Austria's public finances. If the consolidation measures announced by mid-April remain unchanged, the general government deficit would remain close to 4 percent of GDP throughout the projection period, thus clearly violating the Maastricht threshold. The targeted consolidation volumes set out in the government programme are unlikely to be achieved in 2025 and 2026. Without ambitious reforms to improve efficiency across all levels of government, the debt-to-GDP ratio would rise to over 90 percent by 2029. The projection assumes a hypothetical "no policy change" scenario and does not account for any potential additional measures in the scheduled 2025-26 dual-year budget.

Suggested Citation

  • Simon Loretz & Hans Pitlik, 2025. "Public Finances Under Substantial Consolidation Pressure. Medium-term Budget Projection 2025 to 2029," WIFO Reports on Austria, WIFO, issue 6, May.
    • Handle: RePEc:wfo:repoau:y:2025:i:6
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    File URL: https://www.wifo.ac.at/?p=426248
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    References listed on IDEAS

    as
    1. Hans Pitlik & Michael Klien & Simon Loretz, 2018. "Ausgabendynamik in den Budgets der Gebietskörperschaften im Lichte einer aufgabenorientierten vertikalen Finanzmittelverteilung," WIFO Studies, WIFO, number 61535, July.
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    Keywords

    Public finances; Austria;

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