The Budgetary Responsibility Council (RRZ) has improved its general government deficit estimate for this year from the 6.3 percent of GDP prognosticated in February to 6 percent at the end of March. According to RRZ's latest prognosis, the deficit might reach €7.093 billion this year, down €346 million from the figure published in the February prognosis.
"The monthly improvement in the deficit forecast can chiefly be ascribed to estimated additional income from a solidarity contribution, whose period of collection has been extended by an amendment to the whole of 2023," stated RRZ. The extension of extraordinary taxation of refineries and an increase in its rate should bring in almost €490 million extra to the state.
RRZ's positive deviation from the figures in the approved budget currently amounts to 0.4 percent of GDP. The risk of exceeding the projected deficit is viewed by RRZ as low, therefore. RRZ expects current state budget expenditures to have a positive impact on general government performance. It estimates savings of €744 million (or 0.6 percent of GDP) when compared to the budgeted level.
Meanwhile, lower tax and levy revenues represent the most significant risk to the budget deficit. The shortfall is estimated at €769 million (or 0.6 percent of GDP). The revenues should be lowered by measures that haven't been included in the approved budget, such as a cut in VAT for the catering sector and an increase in the tax bonus.
Expenditures on government measures to compensate for high energy prices are expected to amount to €3.195 billion (2.7 percent of GDP), of which €456 million (0.4 percent of GDP) should be covered from EU funds.
(TASR)
