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Finance Ministry predicts 2012 budget deficit will slightly exceed forecast

The state budget deficit could be slightly higher than was originally predicted this year, according to a report on macroeconomic development and the development of the public finances during the first three quarters of 2012 by the Finance Ministry. The cabinet will discuss the report at its session on November 7, the SITA newswire reported.

The state budget deficit could be slightly higher than was originally predicted this year, according to a report on macroeconomic development and the development of the public finances during the first three quarters of 2012 by the Finance Ministry. The cabinet will discuss the report at its session on November 7, the SITA newswire reported.

The deficit is now expected to be 4.69 percent of GDP, 0.05 percent more than expected, reads the report. Overall, compared to the projected deficit, the shortfall will be €30 million higher. The Finance Ministry also enumerated positive factors in the development of the public finances amounting to €562 million and negative factors of €595 million.

The positive factors include grants received by local and regional governments, public universities and the state budget, and savings in co-financing for EU funds. In addition to this, savings by the social insurer Sociálna Poisťovňa and lower transfers to the EU budget also positively impacted the general government finances, SITA wrote.

On the other hand, lower revenue from taxes and levies, lower non-tax revenue, expenditures on resolving the crisis situation in the health sector and spending on corrections connected with the drawing of money from EU funds are expected to negatively affect the development of the general government finances. A negative impact is also expected by higher-than-budgeted spending by local and regional governments, and increased expenses at the National Property Fund, the Environment Fund and the Slovenská Konsolidačná bailout agency, as well as other entities of the general government.

Source: SITA

Compiled by Radka Minarechová from press reports
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