BRATISLAVA, August 26, (WEBNOVINY) – Opposition SMER-SD leader Robert Fico believes that bank houses, monopoly companies and the wealthy should fill the state budget gaps. On Friday, Fico predicted that the Cabinet would have to table a revised draft budget since Slovakia’s economic growth will probably be slower than expected. In Fico’s words, the center-right government thinks differently. The proposal to revoke millionaire tax is absurd amidst this situation.
“We sense what kind of proposals the center-right government intends to come up with,” Fico told journalists at the week’s end. He anticipates that the Cabinet is considering hiking indirect taxes, excise taxes and, according to the former prime minister, the coalition has already mentioned a further VAT increase.
“SMER-SD rejects the philosophy that income from the weakest is to resolve the lack of money in the state budget,” Fico announced. His party will once again forward concrete proposal to impose bank levy following the next gathering of the party leadership. In addition to this, they will also propose to tax profits of monopolies and above-standard earnings of individuals.
Finance Minister Ivan Miklos found himself under fire, too. Fico argues the minister must be here and act amidst mushrooming reports about worsening economic outlooks. “I consider it a misplaced joke that the finance minister contentedly bikes with Mr. Mikulcik in Costa Rica,” Fico slammed the minister.
Negative impact of development on global markets contributed to worse GDP growth prognoses, . Banks in August downgraded their predictions for this and next year. In a regular poll by the National Bank of Slovakia (NBS), analysts of local bank houses foretold 3.1 percent GDP growth for this year, which was down 0.5 percentage points in monthly terms. Bankers revised the estimates for next year even more. July’s predictions mentioned a 4.3 percent increase in economic activity, contrasting to 2.9 percent in August.
Q2 2011 flash estimate of the Statistics Office of the Slovak Republic indicated slackening economic growth, showing that GDP growth in the observed period amounted to 3.3 percent compared with 3.5 percent in Q1. Regarding quarterly terms, the Slovak economy maintains growth close to 1 percent. Net of seasonal influences, q/q growth in the April-June period stood at 0.9 percent, which was the same figure as in Q1.
Representatives of the Slovak government have already admitted negative impacts of slower economic growth on the budget. If the bleak scenario becomes reality, the Iveta Radicova Cabinet will have to find an additional EUR 250-300 million to cover the shortfall.
SITA