The International Monetary Fund (IMF) estimates that Slovakia’s public finance deficit will reach 7-8 percent of GDP this year. In order to reduce it gradually to 3 percent in 2013, the deficit will have to be cut by 2.5 percent of GDP next year, according to Mark de Broeck, the head of the IMF mission in Slovakia, the TASR newswire reported.
Finance Minister Ivan Mikloš agreed with the IMF’s projection and noted that the necessary cuts may total €1.66 billion.
“It’s a sort of recovery that shouldn’t undercut economic growth on one hand, but should allow us to achieve that 3 percent in 2013 on the other,” Mikloš said, as quoted by TASR.
According to Mikloš the government will have to pass measures on both sides of the budget – in revenues and expenditures. He was reluctant to give any further details at the moment TASR wrote.
Slovakia's public finances have deteriorated dramatically over the past few years, especially due to slumps in tax incomes, said Broeck, as reported by TASR, adding that the IMF recommends that Slovakia work hard in consolidating its public finances over the next few years, including setting new expenditure ceilings in the budget, for example. Mikloš said his ministry may actually introduce such measures.
The IMF thinks that the prospects for Slovakia's economy are relatively positive. It estimates that this year’s growth will reach 4 percent while Slovakia’s financial authorities are taking a more conservative approach in their official prognoses. The Finance Ministry predicts the economy to grow by 3.2 percent while Slovakia’s central bank is slightly more optimistic, projecting growth to reach 3.7 percent.
Source: TASR
Compiled by Michaela Stanková from press reports
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