Budget Outlook 3, December 2012

Budget Outlook 3, December 2012 includes an overview of the central government budget for 2013 and updated estimates for the central and general government finances.

The central government budget for 2013 reflects a continuation of the responsible economic policy, while growth and employment are supported at the same time.

The actual budget balance is weakened by the international economic crisis. Therefore it is necessary to conduct a responsible fiscal policy, so the public deficit will remain under 3 percent of GDP.

The general government budget deficit is estimated at 4 per cent of GDP in 2012, 2½ per cent of GDP in 2013 and 2¾ per cent of GDP in 2014. Denmark is therefore likely to meet the recommendation by the EU to reduce the actual general government budget deficit below the limit of 3 per cent of GDP in 2013 and strengthen the structural budget by 1½ per cent of GDP from 2010 to 2013.

Public consumption is downward adjusted by 8 bn. DKK in 2012 compared to the forecast in august. The growth in real public consumption is therefore reduced from 1.5 percent to 0.3 percent in 2012.

The estimate for the real growth rate in public consumption is upward adjusted from 0.1 percent to 1.6 percent compared to the August projection. This upward adjustment in the growth rate is due to the reduced level in 2012.

The fiscal policy together with other economic-political initiatives in 2012 and 2013 supports growth by ¼ percent of GDP in 2012 and ½ percent of GDP in 2013.

The minister of finance Bjarne Corydon says:

The government initiatives support growth and employment. This is important, because of the uncertainty in the global economy. Next year our many initiatives support growth with ½ percent of GDP, which is among other things due to massive investments and a tax reform that will have an impact on private consumption.

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