This Significant Changes analysis of government budget deficits (in local currency and as a % of nominal GDP) shows the evolution of the 2018 consensus. Forecasts for the US budget deficit in FY17/18 and FY18/19 have swelled considerably this month, reflecting White House tax cuts and a recently struck Congressional deal to boost domestic and military spending by US$300 bn. Budget positions in the Euro area economies have gained traction from the economic resurgence. The German surplus rose above 1 % of GDP in 2017, while the Netherlands is on track for similarly positive figures. France, Italy and Spain should all abide by European Commission deficit rules this year (-3% of GDP ceiling). The Japanese government expects to achieve a primary budget surplus in FY27/28, two years later than previously planned.
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