2018 state budget approved
Parliament approved the 2018 state budget on Wednesday. The budget deficit will fall to 0.8% of GDP from the 1.3% planned for this year, mainly thanks to the €800m increase in income tax and payroll levy revenues. The public debt will fall to just under 50% of GDP. The government is planning a balanced budget for 2020. Analysts warn that the government is not using the current period of solid economic growth for a faster deficit reduction. Instead, the government is drawing attention to approved public sector wage hikes and higher social benefits.
The independent fiscal responsibility council RRZ sees €1.1bn risks in the budget with revenues of €14.0bn. The council expects higher than planned spending on social measures and healthcare, higher spending by municipalities, and says the dividend income plan is unrealistic. The budget includes no money for increased pay for night, weekend, and holiday work.
