BRATISLAVA, July 27, (WEBNOVINY) — Finance Minister Peter Kazimir will reduce the available budgets for his colleagues in the Cabinet, including his own ministry. The Cabinet should discuss a spending freeze, which Finance Minister Kazimir has requested on Friday, at an extraordinary meeting probably on Monday next week. The reason for the request is a negative trend in tax revenues quantified by analysts of the Financial Policy Institute of the Ministry of Finance, as well as other expenses not covered by the budget. According to current fiscal forecasts, the shortfall in tax revenues this year is almost EUR 250 million and next year EUR 320 million.
According Minister Kazimir, if nothing was done this year, the general government deficit would not reach the planned 4.6 percent of projected GDP, but could approach 5.3 percent of GDP. The minister considers this year’s budget a „dead letter“. However, the Cabinet and the Finance Ministry, will do everything possible to achieve the goal of at least 4.6 percent this year, he said and he still regards as indisputable aim to press the deficit below 3 percent of GDP next year.
„I have no choice but to start a spending freeze this year. I will first talk about its details, the volume and titles with my colleagues in the Cabinet,“ he said. Details will thus probably not be known until after the Cabinet meeting. He indicated however, that cuts will not be across the board. „We will try not to talk about across the board spending cuts. It will be a mix of capital and current expenditures with the intent not to stifle growth,“ said Kazimir.
He further pointed out that problems with a deteriorated development of tax revenue does not concern only this year but also 2013, when Slovakia has pledged to press the general government deficit below 3 percent of GDP. He says that the updated fiscal forecast raises the need for consolidation in the coming year to achieve that goal from EUR 1.2 billion to EUR 1.5 billion. The budget plan for next year, as well as the priorities of individual departments will have to be discussed anew, according to Kazimir.
SITA