Another actor representing employers has questioned the optimistic tone of the budget project, as published by the government. The Chamber of Skilled Trades and Crafts (CDM) has stressed the need for the government to examine the future in a cautious manner.
The CDM expressed scepticism at the government's optimism for three reasons - the state finances would deteriorate over the course of 2019, there are cyclical and structural risks, and the social budget continues to evolve.
However, the heads of the CDM did not just criticise the budget, highlighting the positive aspects looking back at 2018's finances. For the first time in ten years, the state treasury had a surplus. The CDM was quick to praise this point, attributing it to the cyclical economic activity and the government's overestimation of fiscal receipts. The CDM also pointed out that businesses had contributed to the budget surplus in paying taxes.
In contrast to the 2018 budget, the 2019 edition forecasts a budget deficit. Despite this, the CDM praised the planned economic measures to make Luxembourg more appealing, most notably the investments in transport and digitalisation.
In its press release, the chamber did outline a need for more caution. In the chamber's opinion, the budget is based on rather optimistic hypotheses despite the many insecurities taking place in both Europe and worldwide, such as Brexit and global trade disputes.
The CDM also highlighted the European Commission's growth predictions, which in turn were less optimistic than Statec's predictions. One issue raised by the chamber in particular is the inherent risk if the cyclical economic activity does not deliver. This could lead to fewer profits and more expenses.
The CDM also questioned the evolution of the social budget, wondering whether it is acceptable in light of additional social transfers.
Mainly, the chamber called for the government to ensure that residents could have an acceptable work-life balance. The press release ended by highlighting that governing includes a certain amount of predicting the future, especially economically.
2019 budget: Chamber of Commerce evaluates "optimistic" economic growth and understatement of risks
