The draft budget will eventually be submitted to the Cabinet with a lower deficit than in the original one from August. The new version for next year speaks of a general government deficit at the level of 1.98 percent of gross domestic product, while the original proposal talked about a deficit of 2.49 percent of GDP.
Finance Minister Peter Kažimír stated that the new figure is the result of improved tax collection, a better situation on the labour market, and an overall improvement of the economic environment. He admits that the budget does not include some open questions, such as the outcome of collective bargaining, teachers’ salaries, or the question of deductible items from the income tax base for social and health insurance contributions. The Slovak Association of Towns and Villages (ZMOS) rejected the draft at a special meeting on Monday. Municipalities demanded increased transfers from the state budget to finance the duties devolved to self-governments such as funding social services and the construction of rental housing. They have also criticised the fact that the Finance Ministry outlined excessively large surpluses for them in the draft budget, the achievement of which they deem unrealistic. The draft state budget will be submitted to the Parliament this week.
