In its annual Public Finance Report, the Fiscal Advisory Council of Austria projects a real GDP drop by 7.7% in 2020, which would be the worst economic slump since World War II.
The COVID-19 pandemic is causing a historic deterioration of the general government budget balance from +0.7% of GDP (2019) to –10.1% of GDP in 2020 and –6.4% of GDP in 2021, according to the Fiscal Advisory Council’s forecast. Austria's general government debt ratio is set to rise from 70.5% of GDP in 2019 to 84.8% of GDP in 2020 and to 87.1% of GDP in 2021. While in 2020 the debt ratio is being driven up mainly by the high primary deficit and the contraction of GDP (“denominator effect”), in 2021, the economic recovery and debt-reducing stock-flow adjustments (also because of the ESA recording of tax deferrals) are expected to slow down the increase in the debt ratio.
- Thoroughly preparing and rigorously implementing the return to sustainable fiscal policy after COVID-19 pandemic
- Maintaining local government investment and services of general economic interest, sustainable financing of more clearly defined areas of responsibilities under the fiscal sharing framework
- Continuing with policies to strengthen the labor market as warranted by its special fiscal and social relevance
- Creating the basis for a valid ex ante evaluation of national fiscal rules by operationalizing the general escape clause and making available recent data
- Actively participating in the necessary reform of the EU fiscal framework by contributing previous experience
The Annual Report can be read here