Finance Ministry Proposes Public Spending Limit of €39.326 bn for 2020

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illustration picture (photo by TASR)

Bratislava, December 12 (TASR) – The public spending limit for next year should be €39.326 billion, which corresponds to a structural deficit accounting for 0.5 percent of GDP, according to a proposal to launch a correction mechanism prepared by the Finance Ministry and due to be discussed by the Cabinet next week.

The sum represents the ceiling for expenditures approved in the 2020 state budget and for what the public sector can spend next year.

In line with the law on budgetary rules, the Finance Ministry was obliged to prepare a proposal to launch a correction mechanism with regards to last year’s deviation from meeting the balanced budget rule. The rule defines a balanced budget as a structural deficit accounting for 0.5 percent of GDP, or an adequately rapid procedure towards achieving this.

The Finance Ministry reported on a deviation in public finances in late November. Last year’s structural deficit equalled 1.6 percent of GDP, thereby significantly diverging from the consolidated trajectory of 0.6 percent of GDP. The spending rule posted a significant divergence as well, amounting to 1.1 percent of GDP.

The Finance Ministry has prepared the proposal, which it plans to submit for the final session to be held by the Cabinet this year on December 18.