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Published: 04/18/2024

Assessment by the Fiscal Council: Assessment of budgetary documents for the 2024–2027 period

The general government deficit, excluding the intervention measures, is expected to remain at a similar level until 2027, after an increase to around 2.0% of GDP this year, despite the projected stable and relatively favourable macroeconomic conditions mirrored in general government revenue. The projected deterioration of the fiscal position this year is mainly due to the projections of investment, which, in the Fiscal Council’s view, is again overestimated. The persistence of the deficit over the next three years is primarily expected to originate from the high level of current spending resulting from discretionary measures taken in previous years. This year, fiscal policy is inappropriately set with a markedly expansionary stance which is also not in line with last year’s recommendation of the EU Council. In the face of a number of risks, assessing the fiscal policy stance in the coming three years on the basis of the documents presented is uncertain. The Fiscal Council considers that the projections do not follow the currently estimated anticipated path within the new EU governance framework. The EU Council will make a final decision on this path in autumn. Moreover, the analysis suggests that debt is unsustainable in the long term. The transitional nature of the budget documents, as cited by the Government, does not justify their shortcomings. The documents represent a missed opportunity to put in place an appropriate medium-term budgetary framework as the new fiscal rules are about to enter into force. As a consequence, the preparation of the first medium-term fiscal and structural plan under the new fiscal rules framework this autumn remains a major challenge.

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