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Parliament starts discussing the draft state budget

THE DRAFT state budget for the first time contains a statement that Slovakia will have a balanced budget in 2018, Finance Minister Peter Kažimír stressed when opening the parliamentary discussion on the law of the year on November 18.

Finance Minister Peter Kažimír(Source: TASR)

“I am convinced that this draft provides a basis also for further consolidation of public finances,” Kažimír said, as quoted by the SITA newswire.

The Finance Ministry projects the deficit of the general government to decrease to 1.93 percent of GDP next year. It should continue shrinking to 0.42 percent in 2017 and in 2018 the government expects a balanced budget. The overall debt of the general government should decrease as well to 52.1 percent of GDP in 2016, 51.3 percent in 2017 and 48.9 percent in 2018.

The state budget deficit for 2016 is projected at €1.97 billion (down from €2.984 billion projected in 2015) on revenues of €14.027 billion and expenditures of €15.997 billion. The budget is based on macroeconomic projections that the country’s economy will grow at 3.1 percent, the unemployment rate will fall to 10.6 percent and the inflation rate will be 0.9 percent in 2016.

Read also:Budget plans are ambitious

Though the consolidation concerns some €400 million a year for 2017 and 2018, the aim is not unrealistic, the minister continued.

“I’m introducing the state budget draft with which we want to support the domestic economy, reduce the deficit, increase the employment, and create the conditions for a balanced budget in 2018,” Kažimír added, as quoted by SITA. “I am convinced that the aims are achievable.”

Among the most important budgetary measures is reduction of VAT on basic foodstuffs, or the possibility to pay VAT only after receiving money for the invoice. Also the financing of municipalities will change. Their only income as of next year will be the income tax.

The budget draft also covers the gas refunds for households and the 4-percent salary hike of public administration employees. It also contains two new reserves: for important investments and for solving the migration crisis. The budget also includes a reserve for operating health facilities, SITA wrote.

Kažimír admitted that several amending proposals to the budget draft will be submitted to the parliament, as reported by SITA.

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