Deficit to drop to 1.29% of GDP next year

Deficit to drop to 1.29% of GDP next year

The public finance deficit should reach 1.29 percent of GDP next year, while it should drop to 0.44 percent in 2018 and switch to a surplus of 0.16 percent in 2019, according to the state budget draft for next year, approved by Parliament at its session on Tuesday. In a similar fashion to previous years, the Finance Ministry is counting on a budgetary reserve of €100 million. The reserve is intended for 'rainy days', or for covering investment projects. A part of this reserve should be used for increasing the salaries of civil and public servants. Lower revenues from a levy in the insurance sector has been incorporated in the budget, since a levy will only apply to new policies signed after January 1, 2017. Meanwhile, revenues have been increased as a result of scrapping the ceiling calculation basis in compulsory transfers to health insurance funds and increasing the ceiling in transfers to social funds.

Increased revenues were directed towards the Health Ministry's chapter for hospital reconstruction (over €70 million) and the Labour, Social Affairs and Family Ministry for implementing laws that are being adopted (almost €31 million). An additional reserve of €50 million will be created in the health sector for covering potential negative impacts in the sector. The state budget draft has been based on the prognosis that the Slovak economy should grow by 3.5 percent in 2017. The Finance Ministry expects the negative impact of Brexit to be compensated by better export productivity in Slovakia. Investment activity should be supported by construction in the automotive industry, as well as the resuming of growth in public investment.


Anca Dragu, Photo: TASR

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