Official data show a sharp decline in the budget deficit but it remains sizeable and we don’t expect the narrowing to continue. In any case, the key determinant of the sustainability of the public finances is not the size of the deficit but whether the economy is generating reasonable increases in nominal output. Unfortunately, we expect nominal GDP growth to slow both this year and next. As a result, the government debt burden will continue to climb.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services