Budget Outlook, August 2002
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With the budget proposal for 2003 the Liberal/Conservative government continues its efforts towards changing the prioritisation of public sector expenditures. The main goal is to reallocate resources from administrative affairs to central welfare areas. Redeployment is taking place within the framework of the tax freeze.
Furthermore the budget proposal for 2003 focuses especially on initiatives that contributes to safeguard the more longer run development of the Danish society, e.g. better education on all levels, increased prevalence of ICT, strengthened effort with respect to research and innovation.
From an overall perspective the budget proposal implies ongoing and robust surpluses on both central government CIL-account and the general government budget balance.
The CIL-account is expected to show a surplus of DKK 11bn or 0.8 per cent of GDP in 2003. Thus the CIL-surplus is expected to be somewhat lower than in 2002, where a surplus of DKK 16bn is estimated at the present time. It should be noted though, that the CIL-account is affected by one-off measures and extraordinary events of rather varying size from year to year. Thus corrected for one-off measures and extraordinary events the CIL-account exhibits an improvement from 2002 to 2003.
The general government budget balance is expected to exhibit surpluses around 2 per cent of GDP in both 2002 and 2003. Compared to the May estimates the forecasted surpluses have been lowered. Especially in 2003 where the expected budget surplus is reduced by DKK 9bn stemming primarily from lower revenue from the so-called pension yield tax due to the negative developments on the stock market.