Public Finances Under Substantial Consolidation Pressure

The medium-term budget projection for 2025 to 2029 indicates a persistently high need for fiscal consolidation in Austria's public finances. If the consolidation measures concretised by mid-April remain unchanged, the general government deficit would remain close to 4 percent of GDP throughout the projection period, thus clearly exceeding the Maastricht threshold. The targeted consolidation volumes set out in the government programme are unlikely to be achieved in 2025 and 2026. Without ambitious reforms to improve efficiency across all levels of government, the debt-to-GDP ratio would rise to over 90 percent by 2029. The projection assumes a hypothetical "no policy change" scenario and does not account for any potential additional measures in the planned 2025-26 dual-year budget.