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The Government agreed on the budget proposal for 2003 on Friday 23 August 2002. The aim is to secure sustainability of the public sector and enhance the preconditions for employment and growth, thereby supporting confidence.
The Government has decided to ease taxes levied on labour income while taxes on energy and the environment are to be increased. Tax revenues for 2003 are estimated to remain roughly unchanged from this year.
The Government proposes expenditures excluding interest expenditure totalling EUR 32.2 billion. This is in nominal terms 3.4 per cent more than in the Budget for 2002. Among the most rapidly increasing items are development aid, which will grow by some 6 per cent and transfers to local governments, which are planned to increase by some 7 per cent. Interest expenditure is EUR 3.6 billion.
The central government balance will pose a slight surplus next year and the general government surplus will be about 2 1/2 per cent of GDP.
The long period of robust economic growth came to an end last year when exports and industrial production decreased for the first time in over a decade. This year growth is expected to be 1.3 per cent. If international demand recovers as expected increased export growth will raise GDP growth to 2.8 per cent next year.
The employment rate is expected to remain at its present level of 67 1/2 per cent. The unemployment rate is forecast to average 9.3 per cent this year and to edge up to 9.5 per cent next year.
The consumer price index is expected to rise by 1.7 per cent on average this year and the rate of growth is anticipated to remain in the range of 2 per cent next year.
Ministry of Finance P.O BOX 28 FIN-00023 GOVERNMENT Tel. +358 295 16001 E-mail: valtiovarainministerio@vm.fi
