fiscal drag


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Related to fiscal drag: Contractionary fiscal policy

fiscal drag

n
(Economics) economics the process by which, during inflation, rising incomes draw people into higher tax brackets, so that their real incomes may fall; this acts as a restraint on the expansion of the economy
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This resulted in a significant economic and fiscal drag on its own.
The softening of the fiscal drag is likely to play an important role in supporting a pick-up in global growth," said Jose Ursua, a New York-based economist at Goldman Sachs Group, referring to the negative effect of budget-chopping on an economy.
Economists continue to see fiscal drag as a significant near-term risk to the U.
People are looking at a better backdrop, whether it is the jobs data, the GDP data or the consumer stepping up on the retail sales side in spite of fiscal drag.
This will result in a fiscal drag of approximately one per cent but the economy is still predicted to grow over the next twelve months.
Put that together with the freeze in the basic rate limit and fiscal drag more generally and the number of higher-rate payers could increase from 3.
But the social and business costs of casino gambling can outweigh the fiscal drag on the state, according to Kelly P.
Nevertheless the public finances are on a sustainable path, helped by fiscal drag and slow growth in public spending from 2008-9 onwards.
Still, market activity could again be hit by fiscal uncertainties in March, when debate over sequestration and the expiration of federal spending authority could raise the risk of fiscal drag later in the year.
In some countries, fiscal stimulus will turn into a slight fiscal drag, because consolidation is necessary to arrest erosion of fiscal and external buffers.
Besides seeking a flexible exchange rate, Ukraine will also need to reduce the energy-sector s fiscal drag, which entails a hike in the price of domestic gas by 50% from May along with the phasing out of energy subsidies by 2016 .
With fiscal drag less than half of what it was last year and consumer finances in the best shape in several years, economic growth is set to accelerate.