Despite efforts to rein in spending after years of pandemic and inflation-related outlays, Austria’s public finances took another hit in 2024. New figures from Statistik Austria show that the country’s deficit rose to €22.5 billion - or 4.7 percent of GDP - fuelled by rising public service wages, pensions, and social benefits.
Public debt also jumped by €22.6 billion, reaching a total of €394.1 billion by the end of the year. That translates to roughly €42,849 in debt per person living in Austria.
What’s behind the growing gap?
The main reason for Austria’s growing deficit is not hard to spot: spending rose much faster than revenue. Government income increased by 4.9 percent compared to 2023, while spending grew by 8.8 percent.
On the revenue side, total income reached €248.8 billion in 2024. Taxes and social contributions made up the bulk - €215.9 billion - with income taxes and capital gains taxes rising due to higher wages and earnings.
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Expenditure, on the other hand, surged to €271.3 billion. A significant portion of the spending increase went to personnel costs and pensions, both of which rose sharply in response to inflation. Social benefits in cash, including adjusted welfare payments, increased by 10.9 percent, while public sector wages jumped by 10 percent.
Additional one-off expenses also played a role, including back payments for civil servants’ service time and flood recovery after the September 2024 storms. These costs were recorded as capital transfers and added €1.1 billion to the government’s outgoings.
Interest payments on Austria’s growing debt added further pressure. In 2024, the country paid €7.3 billion in interest - up €1.6 billion from the year before - with most of that increase occurring at the federal level.
Subsidies down, but not gone
While many pandemic-era supports have been phased out, some subsidies remain. The “electricity cost brake” and other measures to cushion high energy prices continued into 2024, though total subsidies actually fell by €1.2 billion compared to 2023.
It wasn’t just the federal government running a deficit. Austria’s Länder (states) and municipalities also spent more than they earned. The state-level deficit rose to €2 billion, while municipalities recorded a €2.6 billion deficit.
Debt levels continue to climb
At the end of 2024, Austria’s total public debt stood at €394.1 billion - up from €371.5 billion the year before. This pushed the country’s debt-to-GDP ratio from 78.5 percent to 81.8 percent.
Most of this debt - €349.2 billion - was in the form of bonds, while €42.9 billion came from loans and €2 billion from deposits. The biggest increase occurred in the federal sector, which added €17.6 billion in new debt, largely to finance the deficit.
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Investments in rail infrastructure and other off-budget entities also contributed to the growing debt burden.
How does this compare to EU rules?
Under the Maastricht criteria, eurozone countries are supposed to keep their annual deficits below 3 percent of GDP and total public debt below 60 percent. Austria now exceeds both limits - a reality shared by many EU countries in the wake of COVID-19, inflation, and war-related energy shocks.
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