Budget Outlook 2: A central government budget proposal to the limit in the Budget Law
Today the Ministry of Finance publishes Budget Outlook 2, August 2014 which contains a status of fiscal policy and general government finances and central government finances. With the planned fiscal policy in 2015 a structural deficit of ½ per cent of GDP is estimated which is to the limit in the Budget Law.
The Danish recommendation under the excessive deficit procedure was abrogated at the ECOFIN meeting in June 2014. The responsible economic policy continues in 2015 where the planned fiscal policy is in line with the Budget Law and EU’s Stability and Growth Pact.
The deficit on the structural balance is estimated to 0.5 per cent of GDP in 2015, while the actual public deficit amounts to 3.0 per cent of GDP. Hence, the planned fiscal policy supports the economy within the framework of the Budget Law and within the limits in the Stability and Growth Pact.
According to Budget Outlook 2 the government estimates a public deficit of approximately DKK 22bn in 2014 (1.2 per cent of GDP) and DKK 60bn in 2015 (3.0 per cent of GDP). In 2015, the budget balance will no longer be affected by the one-off measures from the reallocation of capital pension schemes.
Based on the central government budget proposal for 2015 the deficit of the central government account (the CIL-account) is estimated to DKK 45bn in 2015 or 2.3 per cent of GDP. The budget proposal and the government’s agreements with local governments for 2015 are in line with the Budget Law and the expenditure ceilings regarding 2015.
The estimates for the general government and central government finances are based on the short term projection for the Danish economy, cf. Economic Survey, August 2014.
Following an updated medium term projection to 2020 expenditure ceilings for 2018 have been determined in accordance with expenditure ceilings for 2014-2017.
Read more about Budget Outlook here.