The budget framework estimates that government debt will reach 45 percent of GDP by the end of 2017. The cabinet hopes the adjustment measures announced in the framework budget talks will reduce the debt to GDP ratio
Government hopes to cut back on spending to the tune of 900 million euros between 2014 and 2017. Next year spending is set to be cut by 150 million euros, and by 450 euros in the following year, 2015.
The spending cuts are expected to save half a billion euros by the year 2015. The cabinet had previously estimated that its adjustment programme would have to save some 600 million euros, but the sum was ratcheted down to 500 million following last week’s talks.
The figures published Wednesday estimate that government revenues will grow by an average 3.5 percent until 2015.
Government debt is estimated to rise to 105 billion euros or 45 percent of GDP by the end of 2017. However state economists expect the debt to GDP ratio to decline between this year and 2015. Government debt to the end of February this year was 84.8 billion euros.Half of the savings are to be achieved through cuts, and the other half through tax hikes.
The government also tabled a report on its framework budget decisions for 2014-2017 in the parliament.
At the same time, the Ministry of Finance published its economic review for spring 2013, in which it trimmed its economic growth forecast from 05. percent to 0.4 percent.
Following its framework talks last week, the government had been criticized by the opposition for not providing sufficiently clear and precise information about its decisions.