The budget is balanced for the first time

Economists point to budgetary risks.

Slovak parliament, illustrative stock photoSlovak parliament, illustrative stock photo (Source: Sme)

This piece has been replaced with a story written by the Spectator’s staff.

Slovakia will have a balanced budget in 2019. This means that expenditures will not exceed revenues as it has always been since the establishment of independent Slovakia in 1993. While the ruling coalition hails this as a great milestone, the opposition and economists point to the risks the approved budget contains.

“What I promised, I delivered. My mission has ended,” said Finance Minister Peter Kažimír. This has been his seventh and probably last budget as he is heading to the post of the governor of the National Bank of Slovakia (NBS). The parliament has already approved his nomination while he is expected to take over the post next March.

The balanced budget sends a serious sign to other eurozone members that Slovakia is a country that does its homework and keeps its public finances under full control, commented Prime Minister Peter Pellegrini.

“It’s a good sign for people that it’s a country and governing coalition that adopts measures to the benefit of the public,” said Pellegrini.

Economists warn that if all risks they have identified in the budget materialise, the deficit might be even as high as 0.7 percent of the gross domestic product (GDP). Peter Goliaš from the economic think tank Institute for Economic and Social Reforms (INEKO) noted that even though the government historically approved its first balanced budget, this does not mean that there could be no deficit next year.

“Neither international, nor home institutions believe it and expect a slight deficit,” Goliaš told the Sme daily, pointing out that the budget is balanced only thanks to a technical change reducing budgetary reserves.

Goliaš opines that the goal of this change was more an effort to avoid the criticism of the European Commission. Originally, Slovakia was expected to receive a bad evaluation because it is not meeting growth and stability rules. But when the Finance Ministry promised a reduction of expenditures and a balanced budget, the European Commission alleviated the country, Sme wrote.

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