This Report analyses the September-October 2014 budget decision process (Update to the 2014 EFD, the 2015 Stability Bill and the 2015 Draft Budgetary Plan). The first chapter assesses the government’s macroeconomic forecasts and discusses the underlying risks. Next, the Report examines the public finance trend and policy scenarios, as well as the structure and financial impact of the budget measures presented for 2015. The third chapter looks at the fiscal policy targets within the context of national and European budget rules and examines certain problems associated with their application (estimation of potential GDP and the output gap, the size of fiscal multipliers, the sustainability of the debt during periods of deflation). The Report concludes with an analysis of the economic effects of certain budget measures that are particularly important due to their financial scope and their role in the overall design of the government’s action (reducing the tax wedge on labour, measures to support household consumption and local government finance measures).
