Slovakia has reduced the general government deficit below 3 percent of gross domestic product (GDP) last year, says Eurostat data. According to it, the deficit last year reached 2.77 percent of GDP, compared with almost 4.5-percent deficit from the previous year. The government debt thus increased from 52.66 percent of GDP in 2012 to 55.42 percent last year.
On Wednesday Finance Minister Peter Kažimír praised the fact that Slovakia succeeded in squeezing its public finance deficit. “We’ve done better than we expected ourselves. We’re not losing credibility on financial markets, we don’t need to be worried about penalties from the European Union, and the funding of businesses and households isn’t jeopardised either," stated minister Kažimír. He accentuated the need to continue to pursue consolidation efforts in 2015 via improved collection of VAT, savings via the public administration-reform known as ESO, wage cuts in public administration and other measures.
As the public debt of Slovakia last year reached more than 55 percent of GDP, under the law on the debt brake, or Act on Budgetary Responsibility, the Finance Ministry will have to cut state expenditure by 3 percent starting as of next month. “Cutting expenditures will take place on 15 May, we’re ready for this,” stated Finance Minister Peter Kažimír at the meeting of the Cabinet. The Government won’t be allowed to submit a budget for 2015 that would involve a rise in expenses in public administration expenditures incurred in the co-funding of EU-funded projects and servicing of the state debt, stated head of the Institute of Economic and Social Studies Richard Durana. According to him, in reality this could create a difficult situation, as for instance expenditure towards pension payments will need to be covered from savings in other areas. According to Slovak Academy of Sciences economist Vladimir Balaz, Slovakia remains among the countries in Europe with the lowest debt. However, being a small economy, Slovakia can’t afford such high levels of debt.
