Slovakia’s public debt is approaching the limit of 55 percent of Gross Domestic Product, according to the current report of the European Union’s Statistical Office Eurostat. In the first quarter of this year it rose to 54.9 percent of GDP. Slovakia is still one of the European Union members with relatively low debt and remains below the average public debt of both the euro zone and the European Union as a whole. The negative news is, however, the pace at which the Slovak government debt has been rising in recent months. In annualized terms, it was the sixth fastest in the EU. Debt grew faster only in troubled countries, such as Greece, Ireland, Spain, Portugal and Cyprus.
Most of Slovakia’s public debt is covered by government issued securities. Their share of gross domestic product was 48.7 percent. Foreign aid, by which Slovakia joined in the fight against the debt crisis in the euro area, contributed to the debt by 2.2 percent of gross domestic product. In the current stability program that the Slovak Government sent for assessment to Brussels, it plans this year to keep the public debt at 54.8 percent of GDP. In subsequent years, however, the debt should rise to over 56 percent and start falling only in 2016, to 55.9 percent of GDP. The limit of 55 percent of GDP is already the third limit of the constitutional debt brake. Exceeding this limit would mean that the Finance Ministry would have to freeze 3 percent of budget expenditures, block the Government and Prime Minister’s reserves, and the Cabinet would also have to submit a budget for following year with no annual expenditure growth.
