IMF praises Slovakia's public-finance consolidation package

Slovakia should prepare reforms to public institutions next year, International Monetary Fund (IMF) analysts have recommended. The reforms should include the drawing up of new rules, establishment of a fiscal council that would oversee their observance, and the introduction of medium-term expenditure ceilings, according to an IMF mission that visited Slovakia last month. The mission praised Slovakia's consolidation package to cut the public-finance deficit to below 5 percent of GDP in 2011 in its report published on Tuesday, November 23.

Slovakia should prepare reforms to public institutions next year, International Monetary Fund (IMF) analysts have recommended. The reforms should include the drawing up of new rules, establishment of a fiscal council that would oversee their observance, and the introduction of medium-term expenditure ceilings, according to an IMF mission that visited Slovakia last month. The mission praised Slovakia's consolidation package to cut the public-finance deficit to below 5 percent of GDP in 2011 in its report published on Tuesday, November 23.

Slovakia's main fiscal goal in the medium term is to reduce the public finance deficit to below 3 percent of GDP by 2013. In order to achieve this, a more detailed medium-term strategy is needed, including strict supervision over expenditures. The fund therefore recommends setting a 2-percent ceiling for real growth in public expenditure in 2012 and 2013. The government's plans to hold the 2011 deficit to 4.9 percent would require intense supervision and possible cuts in state expenditures, said the IMF, adding that these measures should be monitored and enforced especially at the local council level and in healthcare.

The Finance Ministry pointed out that the IMF is slightly more optimistic in its forecasts for Slovakia's economic development than the ministry itself. "The ministry expects the package to have a milder influence on price developments, while it predicts stronger economic growth and lower inflation in Slovakia in overall terms," ministry spokesman Martin Jaroš said, as quoted by the TASR newswire. The IMF expects the Slovak economy to grow by more than 4 percent this year, with a slight slowdown to 3.75 percent in 2011. The ministry, meanwhile, expects growth to drop from 4 percent in 2011 to 3.3 percent next year.

Source: TASR

Compiled by Zuzana Vilikovská from press reports
The Slovak Spectator cannot vouch for the accuracy of the information presented in its Flash News postings.

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