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State budget may face cuts says NBS vice-governor

If the effects of the global economic crisis and the recent gas crisis have an influence on Slovakia's tax revenues, one of the Finance Ministry's reactions may be to cut budget expenditures, said Slovak central bank (NBS) vice-governor Martin Barto after the government session on January 20.

If the effects of the global economic crisis and the recent gas crisis have an influence on Slovakia's tax revenues, one of the Finance Ministry's reactions may be to cut budget expenditures, said Slovak central bank (NBS) vice-governor Martin Barto after the government session on January 20.

"This is the task of the Government. We'll see how the projection of tax revenues comes out and then it will be up to them. If we want to meet the requirements of the Growth and Stability Pact and if there really is a fall in tax revenues, cuts are one of the possible courses of action," Barto told the TASR newswire.

The budget counts on a public-finance deficit of 2.08 percent of GDP in 2009. It is also built on expectations that Slovakia will enjoy 4.6-percent economic growth during 2009, but the Finance Ministry may well have to revise this figure down.

The recent suspension of gas supplies to Slovakia, which lasted almost two weeks and forced many businesses to reduce or halt production, will certainly have an effect on this year's economic growth and tax revenues, Finance Minister Ján Počiatek conceded a week ago.

According to the European Commission (EC), the economic growth of European countries, including Slovakia, will be slower than previously expected, partly because the effects of the global crisis will be greater than originally anticipated. The EC said on Monday that it expects Slovakia's growth to reach only 2.7 percent in 2009. TASR

Compiled by Zuzana Vilikovská from press reports
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