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Slovakia's general government deficit to reach 4.62% of GDP in 2012

The general government deficit in Slovakia is expected to reach 4.62% of gross domestic product (GDP) this year, according to a current report on macroeconomic development approved by the cabinet of Prime Minister Robert Fico on Wednesday, December 19.

The general government deficit in Slovakia is expected to reach 4.62% of gross domestic product (GDP) this year, according to a current report on macroeconomic development approved by the cabinet of Prime Minister Robert Fico on Wednesday, December 19.

The government's key fiscal objective should thus achieve a slightly better result than the approved budget for this year where the Finance Ministry foresaw a deficit of 4.64% of GDP. The predicted positive performance by the government should be influenced by spending cuts, for example in funds earmarked for financing joint programmes in Slovakia and the EU of €203 million associated with lower-than-expected use of EU funds this year. General government revenues will be about €154 million higher - by received grants of local governments, public universities, and the state budget. The ministry calculated the effect of transferred spending limits at €114 million and cost saving in the Operational Program Transport beyond co-financing at €120 million.

"Lower spending on social insurance saved €84 million, mainly associated with lower spending on early retirement pensions," the SITA newswire quoted the finance department. On the other hand, the sum of negative influences amounts to €767 million: lower revenue from tax and payroll levies, that also include, however, the positive impact of the consolidation package, represents the amount of €321 million. Without the impact of legislative changes, the shortfall would have reached €609 million. Finance Minister Peter Kažimír reported already in late November that tens of millions of euros will be missing in this year's and next year's budget. The reason is a weaker collection of taxes.
(Source: SITA)
Compiled by Zuzana Vilikovská from press reports
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