Austria's 2026 Deficit Projected to Reach 4.0%

Austria's Fiscal Council warns the budget deficit will exceed Maastricht limits through 2027 due to rising health and pension spending.

The office released a flash estimate on Friday projecting 's budget deficit to reach 4.0% of in 2026 and 3.6% in 2027. These figures significantly exceed the 3% , driven by high growth in health and pension spending.

Economic measures enacted since summer 2026, including a VAT reduction on select foods and the Future Depot, have added 240 million euros to the deficit. While social security and capital gains tax revenues are rising, they fail to offset the rising costs.

Austria's debt ratio is forecast to climb from 80.7% in 2025 to 83.6% by 2027. Interest expenses are also set to rise to 2.0% of GDP. To stabilize debt at current levels, the deficit would need to be reduced to approximately 2.4% of GDP by the year 2027.


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