While the ratio of tax revenue to GDP last year was the highest it has been since the 1980s, growth in tax revenue has been weaker in recent months than we had anticipated despite strong growth in the tax base. Accordingly, we now expect the budget to remain in deficit for the foreseeable future rather than return to surplus. Nonetheless, with high inflation boosting nominal GDP growth, the budget shortfall should be small enough for the ratio of public debt to output to keep falling.
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