The shortfall in state incomes will grow by another €450 million because of the forecast deceleration in economic growth in 2012, said Prime Minister Iveta Radičová at a session of the parliamentary committee for EU affairs on Thursday, November 3.
It isn't clear in this situation whether the planned pace of consolidation of the public finances can be maintained, Radičová conceded. She recalled that the revision to the economic growth forecast presented by the Finance Ministry in September spoke about a fall in state incomes of €240 million. At the time, however, it said that certain measures could compensate for the loss.
"A certain level of deceleration in the consolidation of public finances may be necessary. [I don't know] whether we'll be able to resolve the €240 million plus the €450 million. This is a huge sum. I'm not going to show off, claiming that yes, we can sustain this," Radičová said, as quoted by the TASR newswire. The Finance Ministry in September announced that its prognosis of economic growth for 2012 had fallen from 4.4 percent to 3.4 percent. At the same time, it promised to hold to the planned cut in the public finance deficit from 4.9 percent of GDP in 2011 to 3.8 percent in 2012. Finance Minister Ivan Mikloš conceded, however, that this plan wouldn't be achievable if economic growth decelerated further.
The Finance Ministry is due to publish an updated forecast of economic growth and estimated tax revenue in the coming days. Radičová added, as quoted by the SITA newswire, that the cabinet was open to new proposals for consolidation measures. Given its mandate, however, these measures should result from an agreement in parliament. "I think that this is an issue for open discussion by the parliamentary budget committee," she added. Ministers discussed the state budget at the government session on Wednesday.
Sources: TASR, SITA
Compiled by Zuzana Vilikovská from press reports
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4. Nov 2011 at 10:00