The Fiscal Council believes the envisaged revision of the national budget will not lead to the Government deficit target being overshot for the current year, but only because of a very likely failure to spend the money on public investment as a result of the 2014 experience and the half-year programme, the Fiscal Council says in an opinion on the incoming budgetary revision.
“The Fiscal Council believes keeping the government deficit within the limits of the annual target for the current year is easy to do because the current parameters of the tax and budget policies are preserved and the balance of risks seems tilted to the side of a smaller than targeted deficit, given that investment underspending looks very likely, given the experience of 2014 and the developments in the half-year programme,” the opinion reads.
As far as the Government revenue is concerned, the Fiscal Council says the estimates are grounded in updated actual performance following economic growth that exceeded initial projections and an improvement in collection efficiency.
On the other hand “The Fiscal Council has serious reservations over the upward revision of the revenue from social security contributions, but it believes that the high risk of smaller such revenue becoming true is offset by high probability of higher tax revenue than initially projected, given prudent extrapolation of H1, 2015 performance,” the Council says. More…