Economic Council Reports Significant Budget Deficits for Denmark in Autumn Forecast

The economic council forecasts a budget deficit of 560 million Danish kroner for this year, followed by 480 million next year, totaling 1.04 billion over two years. If the confirmed results for 2023 show a 400 million deficit, the cumulative shortfall across these three years would approach 1.5 billion kroner.

These figures include substantial transfers to the Economic Fund, amounting to 400 million for both 2023 and 2024. The council has raised concerns about these significant deficits as the autumn report is presented.

The anticipated deficits in the budgets for 2024 and 2025 reflect ongoing issues with public financial management. The council insists that the budget results should not exhibit such large deficits.

The message to the government is clear: relying solely on unspecified measures amounting to 35 million kroner annually, as proposed by the Ministry of Finance, is insufficient. The council advocates for a fundamental restructuring of fiscal policy to restore financial order.

Once again, the council urges politicians to establish a fiscal regulatory framework applicable to both national and municipal levels. This approach would allow for setting limits on the annual growth of public expenditures, exerting control over spending increases.

Furthermore, the council emphasizes that a sound financial policy is essential and suggests that the political system should project goals for the public sector outcomes a decade ahead.

Finally, the country should negotiate with municipalities regarding a fixed expenditure framework for, for instance, four years, within which they can prioritize spending. Municipalities also face deficits, with a shortfall of approximately 200 million kroner recorded last year.