BRATISLAVA, June 4, (WEBNOVINY) – The state budget deficit considerably deepened over May. According to data disclosed by the Finance Ministry, the gap widened by nearly EUR 1 billion and reached EUR 2.16 billion. In yearly terms, the state budget deficit was 37.8 percent higher and five months into the year fulfilled the yearly budgeted volume to nearly 59 percent. A month earlier, the gap increased by only EUR 16 million and was EUR 1.171 billion as of late April.
The main reason behind the unfavorable development were lower revenues that totaled EUR 4.332 billion at the end of May, and were 1.5 percent lower than a year ago. This means that over the first five months of this year, the state collected in taxes and other revenues only 31.8 percent of the annual projection. Yet overall state expenditures continued to grow. After five months, they were 8.8 percent higher than a year ago and totaled EUR 6.491 billion, which was 37.5 percent of the yearly plan.
Tax revenue that constitutes the better portion of state budget revenues increased year-on-year by 3.3 percent to 3.292 billion euros as of late May. After five months, the state collected only one-third of its annual plan. Within tax revenue, in particular results in value-added tax and excise taxes worsened. VAT collection dropped 4.8 percent on the previous year to EUR 1.725 billion and in collection of excise taxes the drop was 0.4 percent to EUR 775.7 million. On the other hand, the treasury recorded growth in collected corporate income tax of 22.9 percent to EUR 750.5 million.
As for personal income tax revenue, which as part of fiscal decentralization is directed almost entirely to budgets of counties and municipalities, the Finance Ministry registered negative balance of EUR 66.8 million at the end of May. The collection of withholding tax rose 26.3 percent to EUR 85.2 million.
The Finance Ministry reported an annual increase of 15.6 percent in non-tax revenue to EUR 318.3 million. Revenue from grants and transfers fell by 22.8 percent to EUR 720.8 million. The main item there are transfers from the European Union, which compared to a year ago fell by 23.1 percent to EUR 710.4 million.
On the spending side, current expenditures, which are mostly used to finance functioning of government organizations and salaries of public sector employees increased 11.8 percent to EUR 5.918 billion. Capital expenditures fell by nearly 15 percent to EUR 573.1 million.
The Slovak Parliament last year approved this year’s general government budget with a deficit of 4.6 percent of GDP. The initial plan of consolidation was more ambitious with 3.8 percent GDP, it collided with continued financial and economic crisis and also the collapse of the government Iveta Radicova. Current Finance Minister Peter Kazimir says that achieving the deficit target of 4.6 percent will require additional measures.
According to the approved state budget law, this year’s budget spending is planed to reach EUR 17.3 billion and revenues of EUR 13.6 billion. The state budget deficit can thus be over EUR 3.6 billion.
SITA