BRATISLAVA, December 1, (WEBNOVINY) — After the first eleven months of this year, the state budget gap of the Slovak Republic reached EUR 2.665 billion. According to data from the Ministry of Finance, the state budget deficit was 24.1 percent lower at the end of November than a year ago. The state budget gap is projected to reach EUR 3.81 billion this year while to date, 70 percent of the annual projection has been met. In November alone, the deficit widened by EUR 324 million. Decisive for the overall result of the state budget this year will be the end of the year, when the deficit usually grows the most.
Total budget revenue grew 7.5 percent y/y to EUR 10.239 billion, which is 77.9 percent of the annual projection. Total expenditures of the state administration moderately decreased, going down 1 percent to EUR 12.904 billion. As of late November, the state spent 76.1 percent of the total expenditures projected for this year.
Tax revenue, which makes up a better portion of the state’s revenue, grew 8.5 percent y/y to EUR 7.077 billion over the first eleven months representing over 88.8 percent of the overall plan. Corporate income tax revenue developed most positively, rising 36 percent y/y to EUR 1.487 billion. The collection of value-added tax, which accounts for the biggest part of tax revenue, amounted to EUR 4.25 billion, which was 4.1 percent more than a year ago. Excise tax revenue went up 3 percent y/y reaching EUR 1.833 billion. On the other hand, revenue from withholding tax declined 5.3 percent to EUR 132.6 million. Personal income tax revenue, which is almost fully transferred to budgets of self-governments within fiscal decentralization reached EUR 41.4 million in late November, down 39.2 percent y/y.
Non-tax revenue of the state budget soared by 16.8 percent to EUR 750.9 million in yearly terms, already exceeding the projections by 6.8 percent. On the other hand, grants and transfers shrank 0.3 percent to EUR 1.687 billion y/y. Although transfers from the European Union, which account for the major part of these revenues, grew 46.7 percent to EUR 1.651 billion in yearly terms, the projection was much more ambitious. They have only met the annual projection to 49.4 percent.
Current expenditures comprising expenditures on current operations of state offices and wages of public sector employees traditionally dominated the expenditure side. These expenditures dropped 1.2 percent y/y to EUR 11.075 billion in late November. Capital expenditures increased by 0.4 percent to EUR 1.828 billion. Current expenditures were drawn to 78.7 percent and capital expenditures to 63.2 percent of the annual plan.
According to the state budget law adopted by parliament, the state budget should have EUR 13.148 billion in revenue and EUR 16.958 billion expenses in 2011. The budget deficit is expected to be EUR 3.81 billion. The deficit of the general government as a whole, considering all public institutions, not only the state, should be 4.9 percent of GDP.
Cabinet’s latest projection assumes next year’s state budget deficit to reach 4.6 percent of GDP although the original plan counted on a 3.8-percent deficit. The initial plan has crashed because of the deepening financial and economic crisis as well as collapse of Iveta Radicova’s government. If the actual economic development was even worse that the Finance Ministry expects next year, which prognoses of several institutions indicate, the budget gap could be even wider next year.
SITA
