SLOVAKIA’S public debt as a percentage of GDP has increased by over 13 percentage points since 2008, with the total debt growing from 27.79 percent of GDP in 2008 to 35.42 percent in 2009 and to last year’s 40.97 percent, the SITA newswire reported, adding that large budget deficits recorded in the past two years are primarily to blame.
In 2009 the public budget deficit was 7.96 percent of GDP and it was only slightly less last year, at 7.90 percent of GDP, according to Slovakia’s Statistics Office. SITA wrote that the global economic crisis that caused Slovakia’s economic decline in 2009 can be blamed to a certain degree for the higher budget deficits but that the failure of the state to reign in spending was another factor.
“The bad budgetary situation over the past two years is a result of shrinking budgetary revenues without adequate cuts in expenditures over the past two years,” Eduard Hagara, an analyst with ING Bank, told SITA.
Analyst Michal Mušák of Slovenská Sporiteľňa shared a similar opinion.
“The state implemented hardly any measures to curb the deficit in 2009 and 2010 and launched the deficit reduction process as late as this year,” he said, as quoted by SITA.
Mušák added that this year's consolidation of public finances that are projected to cut the deficit this year to 4.9 percent of GDP must be even more radical.
“As for this year, I cannot see any signs of the deficit significantly deviating from the [budget] plan but it is still too soon to evaluate the whole year,” Mušák said.
2. May 2011 at 0:00 | Compiled by Spectator staff