The medium-term budgetary objectives of the Government for the years 2016 to 2018 indicate its intention to continue reducing the deficit but it also carries several risks, the Council for Budget Responsibility (RZZ), an independnet body set up to monitor Slovakia's fiscal performance reported in its latest Assessment of medium-term budgetary objectives. The Government plans to comply with the budgetary target for this year at the level of 2.49 percent of GDP, even though the current estimate is at 2.55 percent of GDP. The Government will postpone the decrease of public debt under 50 percent of GDP, however. Another risk is that the medium-term budget plan is based on optimistic assumptions of economic growth. The Council also points out that the Government does not consolidate quickly, especially in times when several positives affect the public governance budget. "More effective tax collection representing 1.2 percent of GDP in 2015 and the decrease in debt management costs by 0.4 percent of GDP due to low interest rates are factors which are helpful to reaching the targets quicker," stated the report.
The Budgetary Council also identified risks with fulfilment of non-tax revenues, mainly dividends from Slovak Gas Industry (SPP) worth €156 million, whose budgeted amount does not reflect financial circumstances in profitable subsidiaries. The risk of higher expenditures in health care, the Social Insurance Company (SP) and in the case of the Bratislava bypass construction rose significantly. "Even if the ultimate impact of transactions relative to receivables purchased from Vahostav's creditors is not currently clear, it can have a zero or negative impact on the balance. Also it can be affected by the announced takeover of the Bratislava football stadium construction, the budgetary impact will depend on the new schedule of construction," concluded the report.
