Short- and Medium-Term Prospects of Fiscal Policy. Draft Federal Budget 2014-15 and Federal Medium-Term Expenditure Framework 2015-2018

Margit Schratzenstaller

WIFO Bulletin, 2015, vol. 20, issue 3, 31-46

Abstract: Framework conditions for fiscal policy remain difficult: besides the medium-term outlook of only moderate economic growth, the liquidation of Hypo Alpe-Adria-Bank International AG will weigh on the budget. The need for further subsidies to (partly) nationalised banks in distress cannot be ruled out. Due to statistical revisions, the public debt ratio for 2013 rises to 81.2 percent of GDP. With the draft federal budget for 2014-15 and the Medium-Term Expenditure Framework 2015-2018, the federal government pursues its strategy of consolidation. By 2016, the structural deficit is to be brought down to 0.4 percent of GDP. There remains the need for a fundamental overhaul of the current tax system with its heavy burden on labour, and for further expenditures for education including universities, child-care and research and development to strengthen long-term growth and employment potentials of the Austrian economy.

Keywords: Federal budget; financial aid for banks; fiscal consolidation; government ratios; indebtedness; taxes (search for similar items in EconPapers)
Date: 2015
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