Public debt reached 58 percent of GDP in 2Q13, critical level

The Slovak debt increased from 54.8 of GDP in 1Q13 to 58.0 percent in 2Q13, Finance Ministry’s Financial Institute Policy director Martin Filko said October 23. This means it exceeded the critical level of 55 percent set for launching austerity measures, the daily Sme wrote, adding that the amount - almost €42 billion – was €6 billion higher than a year ago.

The Slovak debt increased from 54.8 of GDP in 1Q13 to 58.0 percent in 2Q13, Finance Ministry’s Financial Institute Policy director Martin Filko said October 23. This means it exceeded the critical level of 55 percent set for launching austerity measures, the daily Sme wrote, adding that the amount - almost €42 billion – was €6 billion higher than a year ago.

The main factors that contributed to the increase in the first half of 2013 were the issuing of government bonds to the amount of €6.965 billion and T-bills for €250 million. The increase in issues was reflected also in an increase in cash reserves from €3.2 billion up to €6.3 billion.

The Institute expects a gradual decline in the public debt to a level of 54.3 percent of GDP towards the end of the year, which corresponds with a reduction of €2 billion. This should happen mainly due to the repayment of bonds and treasury bills to a total amount of €1.5 billion, as well as to early re-purchasing worth €1.4 billion.

“In the second half of 2013, the issuing of bonds and T-bills totalling €362 million, as well as loans taken out worth €350 million, are expected,” said Filko.

If the 55-percent limit for the public debt is overstepped, further budget cutting measures would be launched – including the need to freeze 3 percent of public expenditures, the SITA newswire wrote.

(Source: TASR, Sme, SITA)
Compiled by Zuzana Vilikovská from press reports
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