Parliamentary budget office: The government’s 2017 budget has a “strongly recessionary character”

The government’s 2017 budget has a “strongly recessionary character” although the effects might be somewhat offset by a change in economic climate if the program review is completed, the parliamentary budget office said on Wednesday in its report on the draft submitted by the government.

The draft budget is currently being discussed at the parliament’s economic committee.

“The 2017 budget, as it is being prepared, will have on the short-term an intensely recessionary character although the recessionary effects may be partly offset by the change in economic climate after the completion of the program reviews,” the report states.

The budget office proposes a downward revision of the targets for primary surpluses and a redistribution of the burden between taxes and expenses in favour of the latter. The report also notes the need to reduce the primary surplus targets until and after 2018.

“Therefore, in the coming months, the downward revision of primary surpluses targets and the final settlement of the debt will become increasingly important. The government and the opposition seem to agree on this goal and they have the IMF as an ally [on this],” the report adds.