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Finance Ministry estimates budget deficit of 6.3% of GDP for 2009

Slovakia's state deficit is expected to reach 6.3 percent of GDP this year and the outlook for the future still holds several risk factors that could further deepen the deficit, wrote Slovakia’s Finance Ministry in its long-awaited report on the macro economy and state finances which the government approved on September 9, the TASR newswire wrote.

Slovakia's state deficit is expected to reach 6.3 percent of GDP this year and the outlook for the future still holds several risk factors that could further deepen the deficit, wrote Slovakia’s Finance Ministry in its long-awaited report on the macro economy and state finances which the government approved on September 9, the TASR newswire wrote.

"The biggest risk in terms of estimating the public administration balance is the continuing uncertainty regarding the development of the economy," Finance Minister Ján Počiatek told TASR. Gross domestic product (GDP) fell in the first quarter of 2009 by 5.6 percent, in the second quarter by 5.3 percent and is expected to decline by 6.2 percent for the entire year of 2009.

The downturn had a negative influence on state tax revenues as well as lower tax incomes to towns and regions. As a result, towns and regional authorities will need to borrow funds to maintain service levels.

Last year before the worst of the crisis affected the Slovak economy, the government had estimated a deficit of 2.1 percent. The deficit will be €2.5 billion higher than originally planned and will reach €4 billion. The Finance Ministry also indicates that the deficit will also increase by some €1.439 billion because of higher government expenditures. TASR

Compiled by Zuzana Vilikovská from press reports
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