The government is not adequately taking advantage of favourable economic conditions to speed up consolidation. This is how the Budgetary Responsibility Council assesses the draft general government budget for 2018 to 2020. The council draws particular attention to the fact that the government in the budget is again worsening the targets regarding the general government deficit compared to the original plans and the fact that to achieve a balanced budget in 2020, additional measures will need to be taken.
Parliament will deal with the draft general government budget for 2018 to 2020 at its next session, starting on November 28.
The council has identified risks in the budget, ranging from 0.6 percent to 0.8 percent of GDP, informed Ivan Šramko, the head of the Budgetary Responsibility Council. If these risks are fulfilled and adequate additional measures are not taken, the general government debt may amount to 47.5 percent of GDP and thus Slovakia would remain in the first sanction band of the debt brake. Simultaneously, if the risks are fulfilled, it would be necessary to adopt more fundamental consolidation measures to achieve a balanced budget in 2020 as planned, the SITA newswire reported.Read more
The council has identified risks in traditional sectors like the operation of municipalities and health care. Other risks include overestimated non-tax revenues, risks in the operational expenditures of the social security provider Sociálna Poisťovňa or the railway company ZSSK. The draft budget also lacks money for increasing salaries in state administration and education for the years 2019 and 2020.
The council praises the creation of reserves in the budget. Some should serve for the coverage of concrete risks and others are not specified.
In 2018 the general government deficit is projected to fall, for the first time in Slovakia’s history, below 1 percent of GDP, to 0.83 percent. The year after it should be 0.1 percent of GDP and in 2020, the year when Slovakia will hold general elections, the ministry is planning a balanced budget. Originally Robert Fico’s government had planned to achieve a balanced budget in 2018.
The general government debt should decrease to 49.9 percent of GDP in 2018 and further to roughly 45 percent in 2020.
16. Nov 2017 at 13:38 | Compiled by Spectator staff