Austria’s government is adjusting its forecast for 2021 tax revenue and public spending, leading to a bigger budget deficit as lockdowns crimp economic growth and force the government to expand assistance to hard-hit sectors of the economy.
Planned payments stand at 97.4 billion euros, an increase of 5.5 billion euros ($6.59 billion) compared to previous estimate, the Finance Ministry said on Sunday.
Meanwhile, tax revenue is likely to come in 2.6 billion euros less than had been expected at 72.5 billion euros, boosting the forecast budget deficit by 8.1 billion euros to 30.7 billion euros.
Altogether, the general government debt ratio will rise 1.7 percentage points to 89.6% of gross domestic product, the government said.
“We’re adjusting the budget to secure further resources for healthcare and economic aid,” Finance Minister Gernot Bluemel said, adding the move follows budget revisions in neighbouring Germany and Switzerland.
The action comes after Austria’s Wifo institute, which provides forecasts for the government, said in March that in a “lockdown scenario” the country’s GDP in the current year would grow only 1.5%, lower than an estimated 2.3% growth if lockdowns were lifted soon.
As it stands, Austria is planning broad easing in mid-May, but the government said that these budget changes were needed as the crisis persists.
“I always said, if more money is needed, there will be more money,” Bluemel said.