Slovakia may need additional savings of EUR 200mn to meet 2014 budget gap target – report.

By bne IntelliNews June 26, 2013

Slovakia’s government may need to implement additional savings of EUR 200mn to meet its target of keeping the budget deficit below EU’s threshold of 3% of GDP next year, SME.sk reported without citing sources.

According to the daily, the finance ministry that has already announced budget consolidation measures of EUR 800mn, may have to raise the expand the savings package to EUR 1bn given the slowdown in economic growth which results in lower-than-expected revenue.

The government targets to cut the budget gap to 2.6% of economic output in 2014 from 2.94% planned for this year, according to the so-called Stability Programme, a three-year budget plan that all eurozone countries submit to Brussels every year.

In April, ratings agency Moody’s warned that Slovakia may miss its 2013 budget deficit goal due to the weaker economy adding that it expects the government to adopt additional corrective measures to meet the target.

Concerns have emerged that Slovakia would not be able to meet its 2013 deficit target, after the finance ministry cut its budget revenue prognosis for 2013 by EUR 361mn, or 0.5% of GDP, following a downgrade of its 2013 economic growth forecast to 1.2% from 2.1%. Earlier this month finance minister Peter Kazimir has admitted that the government would most likely further cut again its GDP growth.

Slovakia's budget posted a deficit of EUR 1.6bn at the end of May 2013 equalling to 2.2% of the projected full-year GDP.

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