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IN SHORT BUSINESS

EC to Slovakia: Cut deficit faster

THE EUROPEAN Commission suggested that Slovakia cut its budget deficit faster than planned, provided that economic development allows it, the TASR news agency reported.
The suggestion comes in the EC's report on Slovakia's new convergence programme for 2004-2007, published February 2.The report says Slovakia should make use of any possible budgetary savings in expenditures and better-than-planned revenues.

THE EUROPEAN Commission suggested that Slovakia cut its budget deficit faster than planned, provided that economic development allows it, the TASR news agency reported.

The suggestion comes in the EC's report on Slovakia's new convergence programme for 2004-2007, published February 2.The report says Slovakia should make use of any possible budgetary savings in expenditures and better-than-planned revenues.

Slovakia plans to cut the deficit to the required 3 percent of gross domestic product (GDP) by 2007.

This is in line with the suggestion made by EU finance ministers in July 2004.

However, the Slovak government's plans could be more ambitious - especially for 2005 - given anticipated higher revenues and considering that Slovakia's macroeconomic outlook is favourable, the EC report states.

The EC thinks that Slovakia's projected economic growth figure, around 5 percent of GDP, is achievable.

However, a decrease in inflation to 2.5 percent by 2007 will only be possible if the secondary effects of high headline inflation in 2004 are contained.

According to the Slovak government's programme, the country's public debt will rise from 43 percent in 2004 to 45.5 percent by the end 2007.

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