The draft state budget for 2007 expects revenues of Sk308.1 billion and expenditures of Sk346.9 billion, with a public finance deficit of Sk52 billion, or 2.9 percent of GDP.
The public finance deficit figure, which is Sk12 billion less than the 2006 target, would thus fulfil one of the main ‘Maastricht’ criteria for adopting the euro in 2009, which is that the deficit be under three percent of GDP.
Finance Minister Ján Počiatek said he was convinced that parliament would pass the budget in the form the government approved it, but did not say what he would do if MPs made substantial changes to it.
In the category of expenditures, Sk51 billion, or Sk3 billion more than in 2006, is to go towards social programs, in line with the ruling socialist Smer party’s pre-election promises to deliver greater social “solidarity”.
“In approving this budget, Slovakia would take an important step towards adopting the euro in 2009, and this could reassure financial markets and help the crown strengthen,” said Ján Toth, the main economist with ING bank.