Economic ministers are bracing themselves for a hard road to meeting the 18 billion crown ($403 million) budget deficit despite the release of encouraging figures for the first half of the year.
While commenting on a report showing that the state budget deficit for the first six months of the year narrowed to 753.9 million crowns - only one tenth of the figure for the comparable period of last year - Finance Minister Brigita Schmögnerová said July 3 that there were still risks ahead in the budget.
"The budget looks very favourable for now but I can see a couple of risks in the second half of the year," the minister said July 3.
Vladimír Tvaroška, advisor to Deputy Prime Minister for the Economy Ivan Mikloš, told The Slovak Spectator: "The results for the first half of the year are better than the government had expected, but there will be a lot of pressure on the budget in the second half."
He added: "We are expecting it to be much worse in the second half, but the year-end target is still the same for us and we hope that we can achieve this."
The budget deficit is projected at 18 billion for the close of 2000. However, government plans to deal with the debt of the health care sector and a 1.9 billion crown pay-out to the agricultural sector to off-set some losses from a crippling three-month drought in Slovakia have raised fears that the government would be pushed to meet the proposed target.
A pledge by Prime Minister Mikuláš Dzurinda that 2.9 billion crowns would be wiped off the 15 billion crown debt of the health care sector initially sparked media speculation that the government was not prepared to wait for proceeds from privatisation to lessen the debt.
However, Tvaroška made clear that 2.5 billion crowns from the three billion crown pay-out would come from privatisation and that the remaining 400 million crowns would be provided as a loan from the government.
"The 400 million crowns is a relatively small amount and won't affect the budget," said the advisor.
The government's announcement on expectations for the second half of the year was widely viewed as a prudent economic prognosis. "I wouldn't overestimate the first half [of the year] statistics," said Radomir Jac, an analyst at Commerzbank Capital Markets in Prague. "There are risks in the budget, such as the payments for the drought, but I think the government can still hit its target for the whole year," he added.
10. Jul 2000 at 0:00 | Ed Holt