Originally, the Peter Pellegrini cabinet planned to close the year 2019 with the first balanced budget in the history of modern Slovakia. Nevertheless, in the autumn it changed its plans and aimed to close the year with a general government deficit of 0.68 percent of GDP. But it failed to meet this plan too when Slovakia ended 2019 with a deficit of €1.22 billion or 1.3 percent of the country’s gross domestic product (GDP).
The government's debt last year reached €45.202 billion, which represented 48 percent of GDP. This stems from the first notification of the statistics office of the European Union, Eurostat, based on data provided by the Slovak Statistics Office. The Eurostat will confirm the final data for 2019 in the second, autumn analysis.
“This is the reflection of the health of public finances and the larder, which the previous government has left to us,” said Finance Minister Eduard Heger (OĽaNO) as cited by the SITA newswire, recalling that the previous governments led by the Smer party failed to finish even good economic years with a surplus.
Only six EU member countries had higher deficits as a share of GDP than Slovakia: Italy, Belgium, Hungary, Spain, France, and Romania, while Great Britain ended in a deeper deficit, too. As many as 16 EU member countries, including Germany, the Czech Republic and Greece, reached budgetary surpluses.
Former finance minister Ladislav Kamenický (Smer) objected Heger’s criticism, pointing out that the public finance deficit has been decreasing for the fifth consecutive year. It 2019 it decreased by 1.4 percentage points and remained beyond the sanction zone of the debt brake. However, the plan was 47.3 percent.
The Council for Budget Responsibility (RRZ) points out that the deficit means that the budgetary goal has not been met again, even though the Slovak economy grew 2.5 percent. It recalled that when the Pellegrini cabinet introduced the draft budget, it pointed to hidden budgetary risks.
“The situation from the years 2015, 2016 and 2018, when the deficit was worse than planned, repeats again,” wrote the fiscal council in response to the notification. “Only in 2017 the deficit was lower than planned.”
Budget for 2020 is not realistic eitherRelated articleRead more
The situation may also repeat in 2020, for which the Pellegrini cabinet projected the general government deficit at 0.5 percent. Even before the outbreak of the COVID-19 pandemic, RZZ estimated that the deficit might exceed 2 percent. Now it is expected that the novel coronavirus would deepen it to some 9 percent. Public finance debt could jump to 60 percent of GDP from the planned 47 percent of GDP.
22. Apr 2020 at 22:07 | Compiled by Spectator staff