Fiscal sustainability report

• Increasingly larger budget fiscal gap to emerge in the long term, which may be addressed with short- to medium-term action
• It will take structural reforms, accompanied by investment to support growth, in order to offset the fiscal gap that is building up in the long term
• Austria’s long-term fiscal position largely unaffected by the COVID-19 pandemic
• Outcomes sensitive to assumptions on population, productivity and interest rates but qualitatively robust with regard to the fiscal scope and the fiscal gap
• Demographics-related expenditure forecast to rise by 5.8% of GDP until 2070
• Government revenue ratio forecast to remain broadly unchanged, with a slight decline in the long term
• Primary balance forecast to remain positive until the late 2030s, before moving into increasingly negative territory
• Interest payments relative to GDP forecast to go down further in the medium term but to visibly exceed current levels in the long term
• Policy implications of indicators S1 and S2 limited so far
• Accurate Fiscal Advisory Council OLG model provides value added for a comprehensive analysis of fiscal sustainability for Austria

Year of publication: 2021