Economic Developments and Public Finances 2023-2027
According to the notification by Statistics Austria in March 2024, the general government Maastricht balance for 2023 amounts to Euro -12.7 bn or -2.7% of GDP. Compared to 2022, this is an improvement of Euro 2.0 bn or 0.6 percentage points. This means that the Maastricht deficit limit of 3.0% of GDP was met in 2023 for the first time since 2019 and the COVID-19 and energy crisis.
This budget policy course will also be maintained in the coming years. A Maastricht balance of Euro 14.6 bn or -2.9% of GDP is forecast for 2024, followed by a slight decline to -2.8% of GDP in 2025 and 2026 and to -2.7% of GDP in 2027.
The Maastricht debt level amounted to Euro 371.1 bn at the end of 2023, while the debt ratio in relation to GDP was 77.8% of GDP (-0.6 percentage points compared to 2022). A further slight decline in the debt ratio to 77.5% of GDP is forecast for 2024, followed by an almost constant debt ratio until the end of the forecast period in 2027.
General government Maastricht indicators 2023
According to the notification by Statistics Austria in March 2024, the general government Maastricht balance 2023 amounts to € -12.7 bn or -2.7% of GDP. Compared to 2022, this is an improvement of € 2.0 bn or 0.6 percentage points. This means that the Maastricht deficit limit of 3.0% of GDP was met in 2023 for the first time since 2019 and the COVID-19 and energy crisis.
Looking at the sub-sectors, the central government sector recorded a deficit of € 9.7 bn (-2.0% of GDP), which represents an improvement of € 7.4 bn (+1.8 percentage points) compared to the previous year. The other sub-sectors also recorded a negative Maastricht balance in 2023, but in contrast to the central government sector, these worsened compared to 2022.
General government revenue grew by € 13.9 bn or 6.2% to € 236.1 bn (49.5% of GDP). General government expenditure rose by € 11.9 bn or 5.0% to € 248.8 bn (52.1% of GDP).
Maastricht debt totalled € 371.1 bn at the end of 2023. The increase of € 20.4 bn is larger than the Maastricht deficit as a result of stock flow adjustments (in particular liquidity build-up and accrual-based allocation of interest payments). The public debt ratio fell to 77.8% of GDP (-0.6%-points of GDP) as a result of nominal GDP growth.
General government fiscal forecast 2024-2027
For 2024, a Maastricht balance of € -14.6 bn or -2.9% of GDP is forecast. For the subsequent years 2025 to 2027, the fiscal forecast shows a slight decline in the Maastricht deficit in relation to GDP, which thus remains within the 3.0% deficit limit throughout the forecast period. In 2025 and 2026, the forecast Maastricht deficit amounts to 2.8% of GDP and further falls to 2.7% of GDP in the final forecast year 2027.
Compared to the previous year, the public debt ratio is forecast to fall slightly by 0.3%-points of GDP to 77.5% of GDP in 2024. The absolute debt level will increase by € 15.4 bn or 3.1% of GDP to € 386.5 bn. The effect of the absolute increase in debt on the debt ratio is outweighed by the opposing denominator effect resulting from the nominal GDP growth, which explains the slight overall decline in the debt ratio. In the following years, the debt ratio will remain at a roughly constant level of 77.4% of GDP until the end of the forecast period in 2027.
Economic conditions
In March 2024, WIFO prepared a short and medium-term economic forecast for Austria, on which the current budget forecast for the years 2024 to 2027 is based.
Austria's economic output fell by 0.8% in real terms in 2023. The economy should expand more strongly again from mid-2024. WIFO is forecasting weak economic growth of 0.2% for the year 2024 as a whole. Austria's gross domestic product is expected to expand by a strong 1.8% in 2025. In 2026 and 2027, the Austrian economy is expected to grow by 1.4% and 1.2% respectively.
The unemployment rate (national definition) is expected to rise by 0.3 percentage points to 6.7% in 2024. The unemployment rate is expected to fall again to 6.5% as early as 2025. A gradual decline to 5.9% is expected by 2027. This would put the unemployment rate just under two percentage points below the average for the years 2010 to 2019.
Austria's inflation rate (CPI) fell noticeably over the course of 2023 from 11.2% at the start of the year to 5.6% in December. The average inflation rate for 2023 was 7.8%. WIFO has lowered its inflation forecast (CPI) for 2024 to 3.8%, which corresponds to a decline of 4.0 percentage points compared to the previous year. A further decline to 2.7% is expected for 2025. By 2027, the inflation rate is expected to gradually fall to 2.1%.