Budget Outlook 2 Structural deficit close to the limit in the Budget Law
Today the Danish Ministry of Finance presents Budget Outlook 2, August 2013, which includes a status of the general and central government finances. Budget Outlook 2 reflects that the structural deficit – with the planned fiscal policy in 2014 – is close to the limit in the Budget Law.
Based on the central government budget proposal for 2014 the deficit on the central government account (the CIL-account) is estimated to DKK 31¼bn in 2014 corresponding to 1.6 per cent of GDP. The central government budget proposal for 2014 and the agreements with local governments and regions for 2014 are in line with the Budget Law and the expenditure ceilings for 2014.
Fiscal policy in 2014 is planned in order to support growth and employment within the framework of a healthy and responsible economic policy. The structural deficit is estimated to 0.4 per cent of GDP in 2014 and the structural deficit is thus close to the limit in the budget law.
Fiscal policy and other economic policy initiatives from 2012 and onwards are estimated to increase the GDP-level by just under ½ per cent of GDP in both 2013 and in 2014.
The general government deficit is estimated to DKK 31¼bn in 2013 (1.7 pct. of GDP) and DKK 38½bn in 2014 (2.0 pct. of GDP). The public deficit is thus reduced in line with the requirement in the EU-recommendation. The estimated general government deficits in 2013 and 2014 are respectively DKK 8¼bn and DKK 7½bn higher that projected in May.
The estimates for the general and central government finances are based on the current short term projection for the Danish economy, cf. Economic Survey, August 2013.
Read more about Budget Outlook here.