Evaluation of Medium-term Budgetary Objectives for 2016-2019

The meeting of these objectives should steer the public debt by 2019 outside the debt limit sanction zones, despite the progressive decrease in debt thresholds from 2018 onward. The medium-term budgetary framework is based on realistic assumptions on the development of macroeconomic environment and revenues from taxes and social contributions, as approved by the respective committees in February 20161.

In comparison with the approved general government budget for 2016-2018, the objectives are less ambitious and the meeting of the medium-term objective has been pushed back by two years, from 2017 to 2019. The Stability Programme specifies mainly deficit-increasing measures, but it falls short of explaining sufficiently enough the measures to be taken for deficit reduction. The Council for Budget Responsibility (CBR) has also identified certain significant risks which increase the need to adopt additional measures if the objectives are to be met. The CBR estimates that if the government does not adopt any additional measures, general government deficit may reach 2.5 % of GDP in 2016 and then gradually decline to 1.0 % of GDP in 2019.