Budget deficit hit record low

The lowest deficit reached in the past eight years.

Finance Minister Peter KažimírFinance Minister Peter Kažimír (Source: TASR)

Slovakia posted a state budget deficit of €980 million at the end of last year, which is the lowest deficit to be recorded in the past eight years, the Finance Ministry informed on January 2. The deficit is €990 million (1.23 percent of GDP) lower than the deficit projection of €1.97 billion.

“When compared to the 2015 figure, the deficit went down by €952.3 million, or 49.3 percent,” stated the ministry, as quoted by the TASR newswire.

State budget incomes for the whole of last year amounted to €14.276 billion, while expenditures stood at €15.256 billion. Concerning budget incomes, the volume of tax collected last year exceeded the projected figure, chiefly in corporate tax. Other budget incomes were higher than planned as well, including dividends.

Meanwhile, savings were seen in actual expenditures when compared to projections, said the ministry, giving the examples of €269.7 million saved in a transfer to state-run social insurer Sociálna Poisťovňa and €91.9 million saved in a payment to the EU budget.

“Last year was very successful from the view of servicing the state debt,” the ministry said, as quoted by TASR. “We repeatedly managed to finance it at negative interest rates, which means that investors paid us to lend us money.”

The average interest rate on state debt was almost 2.5 percent, an all-time low in the history of independent Slovakia. New bonds worth €5 billion were sold at 0.7 percent on average in 2016.

“We thus saved €16.1 million on servicing the state debt last year,” the ministry added, as quoted by TASR.

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