Energy subsidies contributing to larger budget deficit
We now expect the price of Brent crude oil to remain high throughout this year, which means that fiscal measures to cap retail energy prices will cost an additional 0.6% of GDP this year. And with the government pressing ahead with its plan to reduce the sales tax on food from April 2027, the budget deficit will widen further next year. Even so, we expect the ratio of public debt to GDP to keep falling.
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