At its session on Thursday, the government approved and commented the draft state budget for the next year, as well as the general government budget for the upcoming three years. Slovakia should show a state budget deficit amounting to 4.94 percent of GDP at the end of 2022. This year the deficit is expected to reach almost 8 percent of GDP. The original draft has been completed by a resolution on the execution of shareholder rights by state representatives regarding dividends.
The draft budget projects an allocation from the recovery plan of a total volume of €4.59 billion in 2022-2024. Next year, the highest portion from the plan should be directed towards the green economy (€454 million), education (€323 million) and health care (€218 million).
Finance Minister Igor Matovic (OLaNO) repeatedly stressed that the final version of the 2022 budget is conditional on the approval of several important laws, particularly the law on pension reform, on spending limits and on the debt brake. If the governing coalition fails to agree on these laws and they are not approved by Parliament, the budgetary deficit will not equal 4.94 percent of GDP, but only 4.3 percent of GDP. The difference is some €700 million. The coalition now has a couple of weeks to hold a debate on the issue. The parliamentary debate on the budget usually takes place at the turn of December.
According to Prime Minister Eduard Heger, the draft budget for next year is a budget of development and stability. "We are still in the pandemic and there must be room for the needs that it might bring. We know at the same time that we will implement a recovery plan and with that it is important to make reforms," stressed Heger. The premier also called on people, trade unions and companies to try to understand the need for long-term sustainability and thanked all partners for a constructive discussion.
The total expenditure of the general government budget directed to the economy is to reach €1.62 billion next year. The money will be targeted mainly at the area of business support, energy and innovation, the restructuring of industrial sectors, informatisation and support for tourism. The largest package of funding, €477.2 million, is to be spent on regional development.
There will never be enough money for culture, but my colleagues in the Government and I are aware of the need to look after public resources responsibly, Culture Minister Natalia Milanova (OLaNO) commented on the approved 2022 public budget and the expenditure allocated to culture. In 2022, the Culture Ministry is expected to see almost €425.5 million in its budget, which amounts to a year-on-year rise of about €33 million. Milanova noted that the budgeting for cultural organisations would remain the same as in 2021.
Defence spending for 2022 at 1.8 percent of GDP is a reasonable compromise, Defence Minister Jaroslav Nad (OLaNO) stated after the Government approved the draft budget for next year on Thursday. Nad, however, admitted that a defence expenditure of two percent of GDP is unlikely to be achieved in this electoral term. Slovakia has committed itself within NATO to achieve defence spending of two percent of GDP by 2024. As stated in the draft budget, last year Slovakia met this NATO target, but mainly due to an unprecedented decline in GDP.
Source: TASR
