Deficit set to fall slower than expected

Source: OBR

Source: OBR

By Jakob Villumsen

The deficit is forecast to be 7.4 per cent of GDP in 2012-2013. It will fall in following years according to the Chancellor, albeit at a slower rate than originally expected reflecting the difficult economic environment both at home and abroad.

The deficit forecast is higher than the 6.9% at the time of December’s Autumn Statement.. However it does not change the prediction that the deficit will fall for the next couple of years.

The public sector borrowing numbers announced today by George Osborne were as follows.

2012-2013: £114bn, versus £108bn in the Autumn Statement
2013-2014: £108bn, versus £99bn in the Autumn Statement
2014-2015: £97bn, versus £88bn in the Autumn Statement
2015-2016: £87bn, versus £73bn in the Autumn Statement
2016-2017: £61bn, versus £49bn in the Autumn Statement
2017-2018: £42bn, versus £31bn in the Autumn Statement

In terms of percentage of GDP it is now set to develop as follows.

2013-2014 6.8 per cent, versus 6.1 per cent in the Autumn Statement
2014-2015 5.9 per cent, versus 5.2 per cent in the Autumn Statement
2015-2016 5.0 per cent, versus 4.2 per cent in the Autumn Statement
2016-2017 3.4 per cent, versus 2.6 per cent in the Autumn Statement
2017-2018 2.2 per cent, versus 1.6 per cent in the Autumn Statement

The deficit is the difference between revenues coming in to the government and public spending.

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