Slovak Finance Ministry Targets Narrower Budget Deficit in 2015

The Slovak Finance Ministry wants to narrow the budget deficit more next year as the reviving economy is set to boost revenue and cut welfare spending.

The ministry plans the 2015 shortfall at 2.49 percent of gross domestic product, down from 2.64 percent targeted for this year, according to the 2015 budget framework posted on the government’s website. The achieve the goal, additional measures worth 218 million euros ($302 million) will have to be adopted, according to the document. It didn’t elaborate.

The administration of Prime Minister Robert Fico is counting on economic growth accelerating to 3 percent from 2.3 percent projected for 2014 to improve public finances and slow the buildup of debt as the country seeks to differentiate from ailing members of the euro bloc. The recovery will fuel creation of new jobs and reduce unemployment, which at 13.3 percent in March, is one of the highest in the euro area.

The plan envisages cutting the gap to 1.61 percent of GDP in 2016 and to 0.54 percent a year later. To meet these goals, the government will need to take austerity measures worth as much as 500 million euros a year, the ministry says.

The cash deficit of the central budget will drop to 2.75 billion euros in 2015 from 3.28 billion euros projected for this year, according to the budget framework.

The public debt is set to reach 56.2 percent of GDP, just below the 57 percent limit that would trigger the need for a balanced budget, helped by expected proceeds from sale of state’s stake in Slovak Telekom AS.

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