1.33 Table 1.2 provides a summary of the OBR's central forecast for the public finances based on this economic outlook and including the measures set out in the Autumn Statement.
1.34 Public sector net borrowing will continue to fall from its post-war peak of 11.2 per cent of GDP in 2009-10, but at a slower rate than previously forecast:
• at Budget 2011 it was forecast that borrowing would fall by 2.0 per cent of GDP in 2011-12 and by 1.7 per cent of GDP in 2012-13;
• borrowing is now forecast to fall by 0.9 per cent of GDP in 2011-12 and by 0.8 per cent of GDP in 2012-13; and
• the reduction in borrowing from 2012-13 to 2015-16 is forecast to remain broadly the same as predicted in March, with a reduction of 4.7 per cent of GDP over the period.
1.35 As set out above, the OBR have also reassessed the level of potential output in the UK economy in the medium term. This assessment implies that more of the UK's deficit is structural than estimated at Budget 2011. The structural deficit (cyclically-adjusted net borrowing) is projected to be 1.2 per cent of GDP higher in 2015-16. The cyclically-adjusted primary balance, a measure of the structural deficit excluding debt interest payments, is in surplus in 2014-15.
1.36 Higher borrowing feeds through into higher than expected debt levels. Public sector net debt as a proportion of GDP is forecast to be 8.6 per cent higher in 2015-16 than forecast at Budget 2011. But as a result of the fiscal consolidation plans reducing borrowing in the future, it is set to fall from a peak of 78.0 per cent of GDP in 2014-15 to 75.8 per cent of GDP in 2016-17.
Table 1.2: Overview of OBR central fiscal forecast
|
|
| Per cent of GDP | |||||
| Outturn | Forecast | ||||||
| 2009-10 | 2010-11 | 2011-12 | 2012-13 | 2013-14 | 2014-15 | 2015-16 | 2016-17 |
Deficit |
|
|
|
|
|
|
|
|
Public sector net borrowing | 11.2 | 9.3 | 8.4 | 7.6 | 6.0 | 4.5 | 2.9 | 1.2 |
Surplus on current budget | -7.0 | -6.7 | -6.5 | -6.0 | -4.7 | -3.3 | -1.8 | -0.1 |
Primary balance | -9.1 | -6.5 | -5.4 | -4.9 | -3.2 | -1.7 | 0.0 | 1.6 |
Cyclically-adjusted net borrowing | 9.0 | 7.1 | 6.4 | 5.5 | 4.0 | 2.8 | 1.7 | 0.6 |
Cyclically-adjusted surplus on current budget | -5.5 | -4.5 | -4.6 | -3.9 | -2.7 | -1.6 | -0.6 | 0.5 |
Treaty deficit3 | 11.6 | 9.5 | 8.4 | 7.6 | 6.1 | 4.6 | 3.0 | 1.3 |
Cyclically-adjusted Treaty deficit | 9.5 | 7.3 | 6.4 | 5.5 | 4.0 | 2.9 | 1.8 | 0.7 |
Debt |
|
|
|
|
|
|
|
|
Public sector net debt2 | 52.9 | 60.5 | 67.5 | 73.3 | 76.6 | 78.0 | 77.7 | 75.8 |
Treaty debt ratio3 | 71.5 | 76.5 | 84.2 | 90.1 | 93.1 | 93.9 | 92.6 | 89.7 |
Output gap | -4.0 | -2.8 | -2.8 | -3.1 | -2.8 | -2.3 | -1.5 | -0.7 |
Memo: HMT estimate of cyclically-adjusted primary balance4 | -7.0 | -4.4 | -3.5 | -2.7 | -1.2 | 0.0 | 1.2 | 2.2 |
Memo: Total policy decisions5 |
|
| 0.0 | 0.0 | 0.0 | 0.0 | 0.5 | 0.8 |
1 General government net borrowing on a Maastricht basis. 2 Debt at end March; GDP centred on end March. 3 General government gross debt on a Maastricht basis. 4 This is a Treasury estimate of the cyclically-adjusted primary balance. It has been calculated by applying the cyclical-adjustment methodology set out in Public finances and the cycle: Treasury Economic Working Paper No.5 (November 2008), which the OBR also use for their forecast of cyclically-adjusted aggregates. 5 Equivalent to the 'Total policy decisions' line in Table 2.1. Source: Office for Budget Responsibility, Office for National Statistics and HM Treasury. | ||||||||