Budget Outlook, December 2005


Budget Outlook, December 2005

The central government budget for 2006 and the agreements with local governments on the economy for 2006 reflect the economic priorities of the Danish government in 2006.

The central government budget includes a number of new initiatives. Continued strengthening of research, education, innovation and entrepreneurship has been ensured. In addition to this care for the elderly, healthcare and better terms for families with children are areas of high priority in the budget.

The new initiatives in the budget amount to DKK 5.85bn in 2006, which are fi-nanced through changed priorities, the use of reserves and the use of the assumed growth in public consumption expenditures of DKK 2bn.

Based on the short term forecast for the Danish economy,

cf. Economic Survey , De-cember 2005, and the central government budget, the central government current, investment and lending account, i.e. the CIL-account, and the general government finances are expected to show large surpluses in 2005 and 2006.

The present local government budgets for 2006 exceed the agreements from June 2005. Hence, a number of measures are prepared to ensure, that local government consumption in the budgets for 2006 are reduced to the agreed level.

From an overall perspective economic policy is in line with the medium term targets towards 2010, and fiscal policy is expected to be broadly neutral to economic activity in 2005 and 2006

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