Analysts warm to 2003 budget plans

ECONOMIC analysts agree that the 2003 state budget proposal published by the Finance Ministry on October 14, forecasting a deficit at 4.8 percent of GDP, is the most transparent, realistic and inclusive Slovakia has had to date.

The budget, which is calculated according to the 'ESA 95' methodology of the European Union, for the first time includes billions of crowns in bank restructuring costs, which had previously been omitted from budgets calculated according to International Monetary Fund methods.

On the other hand, the 2003 budget draft does not include suspect one-off income such as privatisation revenues or debt settlement proceeds from Russia.

The analysts generally agree that the ministry, which was taken over on October 16 by new boss Ivan Mikloš, has been modest in its macroeconomic targets for next year.

The incoming cabinet plans to reduce state budget expenditures in 2003, including scrapping scheduled civil service pay rises, in order to keep the public finance deficit at the targeted Sk55 billion.

The Finance Ministry in its prognosis expects Slovak economic growth to slow slightly next year from 3.8 to 3.7 per cent, while inflation will jump from 3.8 per cent in 2002 to 8.8 per cent and unemployment fall from 18.3 per cent this year to 18 per cent in 2003.

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