The cabinet has approved the state budget for 2023. (source: TASR)
The cabinet approved its draft budget bill on Friday, October 14. The deadline for sending budgetary legislation to parliament is October 15. It includes draft state budgets for 2023-2025 and general government budgets for 2023-2025.
Prime Minister Eduard Heger (OĽaNO) said after the cabinet session that the proposed state budget for the coming years is designed to help people. He believes that next year’s budget will receive support in parliament.
“Those numbers are self-explanatory,” Heger said, as quoted by the SITA newswire. “We should put away the political shirts.”
Finance Minister Igor Matovič, who is also Heger's party boss, added that the 2023 budget creates room for the government’s reaction to the ongoing, significant increases in energy prices.
Matovič noted, as quoted by the Denník N daily, that they will fight for every single vote in parliament, now that government lacks a majority following the departure from the coalition of the Freedom and Solidarity (SaS) party.
Pivoting to the antagonistic rhetoric that is his trademark, Matovič commented that “only a cynic and an antisocial would not vote for such a budget,” as quoted by the TASR newswire. “Only a person who wants to harm people and abuse the situation will not want to help people when they need it the most.”
Matovič stated that the projected deficit can be accounted for almost entirely by new assistance to citizens. On top of €3.4 billion allocated to compensating for the effects of increased energy costs, €1.2 billion is supposed to go to Matovič's so-called family package, €1.1 billion will cover an increase in pensions, €1 billion will go on higher salaries for teachers and state employees, and €400 million will go towards increased wages for medical workers.
“Together, this is more than €7 billion, which is close to the entire deficit,” said Matovič, as quoted by SITA.
Revenues of the general government budget for 2023 are projected at €50.6 billion and expenditures at €58.5 billion, leaving the public finance budget at 6.44 percent of GDP. This is an increase from the 5 percent deficit expected this year.
The deficit net of temporary effects next year is expected to reach 3.1 percent of GDP, which is close to the current year's estimate of 2.9 percent. In the following two years, the deficit should gradually decline to 3.4 percent of GDP in 2024 and 2.7 percent in 2025.
Funds from the EU Recovery Plan totalling €2.3 billion will contribute significantly to the growth of expenditures in 2023. In 2023, Slovakia plans to invest more than €7 billion, including resources from EU funds and the Recovery Plan.
After tripartite negotiations, it was agreed that in the draft bill, subject to parliamentary approval, €340 million will be transferred from the Finance Ministry to medical workers.
Out of the €3.4 billion reserved within the draft budget for compensation for high energy prices, the Economy Ministry should get €1.4 billion and the Labour Ministry €900 million. €940 million will be allocated for general treasury management. State-owned railway companies and the Slovak Road Administration should get €160 million.
Even as of this year the Finance Ministry expects a decline in the total state debt, which is expected to fall to 59.4 percent of GDP after two years of growth from last year’s record 62.2 percent. Next year, the debt should fall below 58 percent of GDP. According to the Finance Ministry, this development will be significantly helped by high forecast inflation as well as the use of accumulated liquid resources.
