RTL Today – Forecasts in Luxembourg: Public finances are likely to worsen by the end of the year

According to the Ministry of Finance, the public finances are still doing well, but the forecasts are quite negative for the coming months.

These conclusions come from figures prepared by the Ministère des Finances for triangle this weekend and communicated to RTL.

In August wascentral statethe state budget without municipalities and social security, listed a billion euros in profit. This result was partly due to a increase in some income, increased with inflation. On the other hand, due tostill relatively limited effect of inflation on public expenditure.

Over the whole year, however, the Ministry of Finance expects a deficit of between 1 and 1.5 billion eurosdue to a drastic deterioration of the balance in the coming months.

On the one hand, the authorities explain this negative development with energy tax deduction which compensates for the index tranche postponed until next April. that macroeconomic context can also mean a decrease in turnover. Finally, the Ministry of Finance’s tables clearly show that the ongoing budget work between the administrations and the ministry should also lead to a deterioration of the balance not only in 2022but also in the coming years.

After his bilateral meetings with employers and unions, Prime Minister Xavier Bettel promised again on Wednesday help for households and businesses affected by the sharp rise in energy costs. At the same time, he also said that the government would stick to budget target appears from the coalition agreement. The three parties DP, LSAP and déi Gréng are committed to maintain public debt below 30% of GDP.

Read also: After the bilateral meetings – the employers sound the alarm, the trade unions in a united front

Finance Minister Yuriko Backes (DP) and her party repeated again that the country has not not enough reserves to finance an adjustment of the tax scales to inflation. Such a reform would cost between 500 to 600 million euros per yearaccording to them, but they fail to mention that other adaptations and this kind of reform could also generate additional revenue.

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