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Parliament approves budget for next year, deficit to fall

At its December 4 session, MPs the approved the 2015 budget with the deficit of public expected to f all to 2.29 percent of gross domestic product (GDP).

At its December 4 session, MPs the approved the 2015 budget with the deficit of public expected to f all to 2.29 percent of gross domestic product (GDP).

This is down from 2.9 percent for this year. The public debt shall remain under the cap of 55 percent of GDP, according to the budget of the public administration for the next year, ultimately approved by MPs. Out of 142 present, 81 MPs of the ruling Smer party voted for the draft budget, 53 MPs were against and 8 opposition and independent MPs abstained, the TASR newswire wrote.

For the possibility of deficit, the cabinet has also left a stand-by of 0.2 percent of GDP (€155 million) because of risks of the macroeconomic development – mainly due to ongoing geo-political conflict Ukraine-Russia that has been also impacting the European economies. A stand-by related to the collection of taxes was also set (meaning that additional revenues of €300 million will be put aside and not allotted for a certain ministry or purpose).

The Finance Ministry had to find resources in the budget to cover several new measures that will become effective as of 2015: new rules for health insurance for low-income employees, increase in teachers’ salaries, public administration and state administration officials. Nursery schools and kindergartens will be also enhanced, and it will be possible to earn a salary and receive poverty benefits.

Finance Minister Peter Kažimír told TASR that the biggest item to absorb the public money is the change in health levies system – it is expected to amount to a minus €150 million in the budget.

Parliament approved some changes proposed by parliamentary committees, and thus more money than originally planned will go for Presidential Office, Supreme Court, Government Office, education, economy, labour and health ministries. Also the environment, interior and transport ministries saw their funding increased, according to the SITA newswire. Some money will also be shifted, against the original plans, between the Education Ministry and the Slovak Academy of Sciences (which saw a cut in its budget for 2015 as liquidation step and organised protests).

Due to this, the originally proposed deficit of 1.98 percent swelled to the approved 2.29 percent of GDP. The budget’s calculations expect Slovak economy to grow at 2.4 percent for 2014 and at 2.6 percent next year. The employment shall increase in 0.4 percent in 2015, especially in market services and industry. The real wage shall grow at 2.1 percent – in harmony with the growth of productivity.

The opposition’s amending proposals were turned down as expected, SITA wrote.

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