Higher rates force Austria to revise deficit forecast, finance minister says

VIENNA, Oct 14 (Reuters) — Rising interest rates make it harder for Austria to shrink its budget deficit to within the European Union's limit, and have forced it to revise up its budget deficit forecast for 2027, Finance Minister Markus Marterbauer said on Wednesday. Austria has said it plans to cut its budget deficit back to the EU limit of 3% of gross domestic product by 2028 from just over 4% this year and last. In his last budget in June, Marterbauer said he expected a deficit of 3.5% next year, but he told ORF radio on Wednesday that would not hold. "Interest rates are climbing in all of Europe. For Austria in recent months, the rise in interest on benchmark 10-year bonds has been 0.7 percentage points. That will cost us roughly €500 million ($560 million) extra in interest payments in the coming year," Marterbauer told ORF. "In our forecast for next year that we send to the EU, we will therefore increase the (expected) deficit from 3.5% of economic output until now to 3.6%. One tenth (of a point) is exactly those 500 million," he said, adding that Austria would continue to strive to hit its 3% target in 2028. ($1 = 0.8925 euros) (Reporting by Francois Murphy; Editing by Andre