BUSINESS IN SHORT

Public debt reaches 40 percent of GDP

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.

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.


Get daily Slovak news directly to your inbox

Top stories

Here's what the across-the-board coronavirus testing should look like

The Defence Ministry introduced the basic steps of the planned testing.

Bratislava is testing special trolleybus

Public transport should become greener in the capital.

Bratislava borroved the hybrid trolleybus from the Czech city of České Budějovice for a week.

Teachers trust conspiracy media, they think the government is not handling the pandemic well

One-third of teachers think the coronavirus vaccination is a preparation for implanting chips, recent poll shows.

The school in Trenčianske Stankovce.

Ombudswoman, summer festival and a scientist. The awards for sustainable development have been granted

The Pontis Foundation awarded organisations, institutions and individuals for the second time.