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Cabinet approves budget plans

Slovakia should see a surplus of its general government budget in 2019.

(Source: TASR)

The government approved the draft of the general government budget for 2017-2019 at its October 5 session.

“The budget is based on the current macroeconomic situation in Slovakia which predicts for the country, compared with other European states, an above-average economic growth at 3.5 percent of GDP for next year,” the Finance Ministry wrote in the press release.

The general government budget predicts a gradual decrease in the general budget deficit that should amount to 1.29 percent of GDP in 2017, which is predicted to fall to 0.44 percent in 2018. The government planned the surplus for 2019, predicting it to be 0.16 percent of GDP.

Moreover, the gross debt of public administration should also drop, to 49.1 percent of GDP in 2019.

As for the state budget, the draft predicts the deficit to amount to €2.017 billion next year. Total incoming finances should amount to €15.415 million, while expenditures are predicted to stand at €17.432 billion.

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The incomes will be impacted by the tax changes that should be soon discussed by the parliament. This includes the drop in corporate income tax by 1 percentage point to 21 percent and the increase in lump-sum allowances for self-proprietors from 40 to 60 percent. The amendment also introduces a new tax on dividends and changing fees for regulated industries, the Finance Ministry said.

The ministry expects that the negative impact on economic growth of Slovakia caused by the departure of the United Kingdom from the EU will be compensated by better exports from Slovakia. Investment activities will be supported by construction in the automotive sector and increase in public investments.

Employment is also expected to grow by 1.5 percent next year. The jobless rate should drop to 8.5 percent and continue decreasing in the following years.

The increase in nominal salaries will speed up to 3.5 percent, resulting in the rise of the average wage to €940 a month next year, the TASR newswire reported.

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