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Opinion of the Chamber of Commerce on the Government draft budget - Uncertainties, deficits, resilience, recovery

Christel Chatelain, Head of Economic Affairs of the Chamber of Commerce and Carlo Thelen, Director General of the Chamber de Commerce

Uncertainties, deficits, resilience, recovery

On 14 October, the Government presented its 2021 draft budget,  accompanied by a   multi-year draft budget, in a peculiar environment, to say the least, with expenditures exploding as a result of aid measures and sharply declining revenues. Central government spending in 2020 is set to exceed the amounts budgeted last year by EUR 2 billion, while public revenue is meant to fall by some EUR 2.5 billion in 2020, compared to the amounts in the 2020 draft budget, against the backdrop of a 6% decline in real GDP in 2020. The result  is  a  central  government  deficit  that  could  exceed  EUR 5  billion  in  2020.  Even  with  a  mechanical economic rebound in 2021, this deficit is expected to remain high, at EUR 2.5 billion in 2021. The public debt, for its part, would be 27.4% of the GDP in 2020 and could reach 29.4% of the GDP the following year. This w ould surpass what is considered the ‘ government norm’  of 30% as early as 2022

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