Last year the long-term sustainability of public finances improved according to a report issued by the Council for Budgetary Responsibility (RRZ) on Monday. The improvement is mainly due to the decrease in the public finance deficit.
“Budgetary consolidation along with the reform of the pension system for the police and army improved the long-term sustainability indicator to 3 percent of GDP, compared to 4 percent in 2012”, said the Council's Chairman Ivan Sramko. Slovakia managed to meet its international obligation and squeeze the budget deficit below 3 percent of GDP. "This good result was achieved partly thanks to some factors that may not be repeated in the future and that may negatively affect the potential growth of the economy such as saving expenditures associated with the co-funding of EU-funded projects, a significant decline in local governments' capital spending and the transfer of assets to the Social Insurance Agency. We must also negatively assess the fact that the state debt in 2013 exceeded 55 percent of GDP”, said Sramko.
For the first time, the report also includes a "generational bill", which shows in detail what fiscal burden may be carried over to the next generation. "The people not yet born will have to pay €20,000 more to the state than what they will receive from it to cover what today's generation 'enjoys'," said Council member Michal Horvath. The generational bill also shows that the biggest contributors to the state budget are people aged 42. On the contrary, 94-year-old people tend to receive the most.
