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State budget deficit falls, y-o-y

AT THE END of May 2011, Slovakia’s state budget deficit was nearly one-quarter less than at the same point a year ago. According to data published by the Finance Ministry, the budget gap stood at €1.567 billion at the end of May, down 24.6 percent year-on-year, the SITA newswire reported.

AT THE END of May 2011, Slovakia’s state budget deficit was nearly one-quarter less than at the same point a year ago. According to data published by the Finance Ministry, the budget gap stood at €1.567 billion at the end of May, down 24.6 percent year-on-year, the SITA newswire reported.

In monthly terms, the deficit grew by €550 million. Behind the improvement of the state budget deficit in annual terms was an 11.1-percent year-on-year increase in total revenues to €4.396 billion, as well as a moderate decrease in expenditure of 1.2 percent to €5.964 billion.

The year-on-year increase in state revenues was based mainly on growth in tax revenues, as well as revenues from transfers and grants, according to the ministry. Tax revenues reached €3.187 billion by the end of May, up 7.6 percent year-on-year, and amounting to 36.3 percent of forecast full-year tax receipts. Corporate income tax revenue swelled 60.6 percent to €610.7 million. VAT collection grew 1.1 percent year-on-year to €1.812 billion. Proceeds from excise tax declined 2 percent in comparison with the same period in 2010 to €778.6 million, while collection of withholding tax fell by 0.9 percent to €67.5 million. Personal income taxes, which as part of fiscal decentralisation end up almost entirely in the budgets of local and regional governments, were down by €99.6 million as of the end of May.

Non-tax revenues were lower compared with the same period of last year, declining 6 percent to €275.4 million. However, grants and transfers posted a significant increase of 32.6 percent to €933.5 million and revenues from the EU budget rose 38 percent to €923.5 million.

On the spending side, expenditure in the first five months fell by 2.1 percent year-on-year to €5.293 billion. Capital expenditure rose 6.5 percent to €670.8 million, SITA reported.

According to the state budget law adopted by parliament, the state should receive €13.148 billion in revenue and spend €16.958 billion in 2011. The budget deficit is thus forecast to be €3.81 billion. The deficit of the general government as a whole, including all public institutions, not just the state, should be 4.9 percent of GDP. The government plans to squeeze the deficit below 3 percent of GDP in 2013.


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