Consolidation of the Federal Budget is a Medium-Term Task

  • Gerhard Lehner

In 1991-92 the federal government continued the consolidation of the budget. In 1991, the net deficit was reduced to 3.3 percent of GDP (1990 3.5 percent); for 1992, a shortfall of 3.1 percent is projected. The development of the net deficit conforms to the medium-term plans. The austerity course, however, encounters a steady increase in problems. The emphasis shifts increasingly to the revenue side; a further reduction on the expenditure side is impeded by a rigid structure. The consolidation of the budget is a task that must be carried out by the central government, but in the long run, the whole public sector, must be involved in this process. Thus, financial links within the public sectors are of increasing importance.