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Slovakia’s deficit definitely below 3 percent GDP in 2013

SLOVAKIA’s public administration deficit reached 2.77 percent of GDP in 2013 based on common European methodology, according to a proposal of the 2013 final state balance sheet that was acknowledged by Parliament on July 8.

SLOVAKIA’s public administration deficit reached 2.77 percent of GDP in 2013 based on common European methodology, according to a proposal of the 2013 final state balance sheet that was acknowledged by Parliament on July 8.

"The deficit in 2013 was 0.17 percent of GDP lower than estimated in the budget proposal. At the same time it was 1.71 percent of GDP lower than the figure recorded in 2012," said Finance Minister Peter Kažimír when presenting the document to legislators, as quoted by the TASR newswire.

The minister went on to say that by reducing the country's deficit below 3 percent of GDP within the prescribed period, Slovakia has met the key precondition for the country to be exempted from the excessive deficit procedure emerging from EU budgetary policy. Eight EU-member countries grouped in the eurozone recorded higher deficits than Slovakia and 14 countries posted higher public debts.

According to the final balance sheet, the reduction of the deficit was achieved despite worse economic developments than expected within the budget.

"While the budget was counting on economic growth of 2.1 percent, real growth amounted to only 0.9 percent. This triggered the introduction of several measures throughout 2013 aimed at maintaining the deficit under the level of 3 percent of GDP," reads the document as quoted by TASR.

At the same time, based on the EU's methodology, Slovakia's public administration debt stood at 55.4 percent of GDP in 2013, recording a hike of 2.8 percentage points year-on-year.

"Among the main factors behind the increase were the level of the current deficit at 2.8 percent of GDP, an increase of Slovakia's obligations emerging from the country's participation in the bailout mechanisms of the eurozone to the tune of 0.9 percent of GDP, and the redirecting of a part of the budget of a newly-established Emergency Oil Reserves Agency to a volume of 0.6 percent of GDP," Kažimír said as quoted by TASR.

Conversely, the drop in the public deficit was facilitated thanks to the current reserves within the treasury system - by 0.6 percent of GDP. The growth of nominal GDP contributed towards a year-on-year decrease in the proportion of the state debt vis-a-vis GDP of 0.8 percentage points.

Source: TASR

Compiled by Michaela Terenzani from press reports.
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