Long-term Perspectives of Public Finances in Austria

This study examines the impact of demographic change on Austria's national budget within the context of the current legal framework. As the baby boomer generation ages, the demand for healthcare and nursing services is increasing. Their withdrawal from the labour market due to age weakens the contribution base and increases pension expenditure. Furthermore, the situation has deteriorated since the last long-term forecast in 2022, due to the recession reducing government revenues and a lack of significant expenditure savings. By the end of the forecast period in 2060, government debt in the baseline scenario will amount to almost 150 percent of GDP. The higher public debt ratio compared to the previous long-term forecast is primarily due to the poorer initial conditions in the current forecast. Even under more favourable economic conditions, further reforms appear necessary to consolidate public finances in the long term and limit interest expenditure.