Austria's finance minister admitted inevitability of exceeding budget deficit limit

Austria's budget deficit reached 4.7% of GDP last year, significantly exceeding the 3% limit set by the European Union. As Bloomberg notes, the country is facing serious economic difficulties, having to revise its fiscal policy.

Federal Minister of Finance Markus Marterbauer emphasized the impossibility of rapid reduction of the deficit to the target figures without significant damage to the economy and employment. Given the projected third year of economic recession, Austrian government is planning to present a two-year budget by May this year, which implies a gradual reduction of expenditures.

Austrian authorities have decided to abandon attempts to avoid EU sanctions on excessive deficits, recognizing the need for fiscal discipline. While sticking to the initial 6.4 billion euro ($6.912 billion) savings plan, they intend to develop a new medium-term plan for sustainable budget cuts. Thus, the government seeks to strike a balance between fiscal responsibility and maintaining economic activity in the midst of a prolonged recession.