Budgeting in Austria During the Outbreak of the COVID-19 Pandemic
The COVID-19 crisis has a considerable impact on public finances in Austria. A part of the rescue measures totalling 38 billion € at the federal level and 1.4 billion € at the level of the Länder (altogether 9.9 percent of GDP of 2019) will immediately worsen the budget balance. Moreover, the COVID-19-induced recession will cause public expenditures to increase (e.g., unemployment or social assistance payments) and cyclically sensitive taxes to decrease (automatic stabilisers). The Maastricht deficit is expected to increase to –7.4 percent of GDP in 2020 and to –3.3 percent in 2021. The debt ratio will rise to above 80 percent of GDP. Due to the uncertainties surrounding duration and depth of the recession as well as the take-up of the rescue measures the budgetary forecast is subject to considerable uncertainty.