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The Aspiration for Public Investment - NIESR
Our view of the economic outlook over the life of this parliament is shown in Table 1.1 below. We forecast output to grow at around 1.2 per cent per annum and the unemployment rate to remain around 4.5 per cent, while inflation rises over the second half of this year before returning to target in the medium term.
Under current spending and tax plans, we project the budget deficit to remain above 3 per cent of GDP and public debt at around 100 per cent of GDP, implying that, under the current fiscal rules, the new government can only increase spending if it is prepared to increase taxes to pay for it.
Against this backdrop we propose the following policy changes: Revise the fiscal framework; Address regional productivity disparities; Prioritise affordable housing and energy efficiency.
Under current spending and tax plans, we project the budget deficit to remain above 3 per cent of GDP and public debt at around 100 per cent of GDP, implying that, under the current fiscal rules, the new government can only increase spending if it is prepared to increase taxes to pay for it.
Against this backdrop we propose the following policy changes: Revise the fiscal framework; Address regional productivity disparities; Prioritise affordable housing and energy efficiency.
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