Sustainability of public finances improved

THE LATEST report on the long-term sustainability of public finances issued by the Council for Budgetary Responsibility (RRZ) showed that the year 2013 brought improvement in Slovakia, mainly due to a decrease in the public finance deficit.

THE LATEST report on the long-term sustainability of public finances issued by the Council for Budgetary Responsibility (RRZ) showed that the year 2013 brought improvement in Slovakia, mainly due to a decrease in the public finance deficit.

“Budgetary consolidation along with the reform of the pension system for the police and army improved the long-term sustainability indicator to 3 percent of GDP, compared to 4 percent in 2012,” said RRZ chairman Ivan Šramko, as quoted by the TASR newswire, on April 28.

Slovakia managed to meet its international obligations and shrink the budget deficit below 3 percent of GDP, according to the report. It referred to preliminary data from Eurostat, showing that the country’s deficit stood at 2.8 percent of GDP, as reported by TASR.

“This good result was achieved partly thanks to some factors that may not be repeated in the future and that may negatively affect the potential growth of the economy,” Šramko said, as quoted by TASR. He referred to the saving of expenditures associated with the co-funding of EU-funded projects, a significant decline in the capital spending of local governments and the transfer of assets to the state-run social insurer Sociálna Poisťovňa.

The RRZ also negatively assessed the state debt in 2013, which exceeded 55 percent.

For the first time, the report also includes “a generational bill” which shows in detail the fiscal burden that may be carried over to the next generation.

“People not yet born will have to pay €20,000 more to the state than what they will receive from it to cover what today’s generation ‘enjoys’,” said RRZ member Michal Horváth, as quoted by TASR.

The generational bill also shows that the biggest contributor to the state budget are people aged 42. On the contrary, 94-year-old people tend to receive the most.

Source: TASR

Compiled by Radka Minarechová from press reports

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