Evaluation of Medium-term Budgetary Objectives for 2017-2020

The Council for Budget Responsibility (CBR) views positively that the government has presented a budgetary framework that assumes continued deficit reductions toward meeting the medium-term budgetary objective and bringing the government budget into balance by 2019. The meeting of these objectives is a prerequisite for the long-term sustainability of public finances. However, provided that the 2020 objective is met and the present assumptions remain unchanged, the keeping of public finances sustainable in the long run will require additional measures worth 0.3 % of GDP. This means that, in the medium term, the government should use both the favourable economic conditions and savings through measures adopted in the pay-as-you go pension system’s pillar to attain a surplus of 0.4 % of GDP by 2020 and reduce public debt to 43.5 % of GDP.