Our Significant Changes analysis of the government budget deficit outlook (in local currency terms and as a % of nominal GDP) shows the evolution of the 2016 consensus. In the US, the deficit is set to widen this year afterdecliningforthe past three years. Countries in the Euro area, meanwhile, have struggled to meet European Commission targets. France and Spain are expected to breach the 3% of GDP deficit ceiling again this year. Germany is the exception. It achieved a €21.2bn surplus last year and could maintain this trend. The UK deficit is falling and could be eliminated by 2020 if it meets the chancellor's balanced budget target. In Canada, an expansionary budget this year will drive up the deficit. More aggressive policy measures may also lift the 2016 deficit to 5% of GDP in Japan.
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