Parliament Okays Next Year's Budget; Deficit to Reach 0.49% of GDP

Parliament Okays Next Year's Budget; Deficit to Reach 0.49% of GDP

Bratislava, December 3 (TASR) – Parliament has approved the state budget for next year, with 78 MPs from the 143 lawmakers present in the chamber supporting the draft and 61 MPs voting against, TASR learnt on Tuesday.

All coalition caucuses, including those representing Smer-SD, the Slovak National Party (SNS) and Most-Hid, supported the draft budget. The entire opposition as well as some Independent MPs were against.

Slovakia won’t manage to achieve a balanced budget this year. The deficit is expected to reach 0.68 percent of gross domestic product (GDP). The deficit should fall to 0.49 percent of GDP next year, and a balanced budget should be achieved as of 2021.

Meanwhile, the budget anticipates a fall in the total state debt next year to just below 50 percent of GDP (49.9 percent).

The Finance Ministry stated that budgetary policy for the next few years is based on the Government Manifesto, and the main priorities include a recovery in public finances in order to achieve long-term sustainability.

The chamber also approved an amendment submitted by committees and prepared by the Finance Ministry. It adjusts both the revenue and expenditure sides of the budget. State budget revenues were reduced due to the omission of a levy on the profits of state-run forestry company Lesy SR amounting to €5 million. The Labour Ministry’s expenditures went up by €80.5 million due to the increase in minimum pensions.

The ministry also abandoned plans to increase excise duty on tobacco. Finance Minister Ladislav Kamenicky (Smer-SD) has calculated that this would have increased incomes by €101.8 million. Conversely, the increase in the bank levy will bring in an additional €114.1 million.

The expenditures side of the budget was significantly influenced by measures related to remuneration in public administration and by an increase in teachers’ salaries.

Growth in the Slovak economy should slow to 2.4 percent of GDP this year, mainly due to the weaker performance of the eurozone. “The more lukewarm performance of the economy will continue in 2020, with GDP growth reaching 2.3 percent,” said the Finance Ministry. Employment should remain at the same level next year.