Slovakia’s FinMin sees 2015 budget gap narrowing to 2.49% of GDP on higher tax revenue

By bne IntelliNews April 22, 2014

Slovakia’s finance ministry has projected that the budget deficit will shrink further in 2015 to 2.49% of the GDP from an estimated 2.64% this year thanks to expected higher tax revenue and improving economic environment, according to a draft budget framework for 2015-2017 that is to be approved by the government on April 23. The document, posted on the government's website, sees the deficit at 1.61% in 2016 and at 0.54% in 2017.

The finance ministry expects the tax and contribution income to increase to EUR 20.6bn in 2015 from EUR 20.16bn estimated for 2014. The revenue should further go up to EUR 21.47bn in 2016 and to EUR 22.42bn in 2017.

According to the winter edition of the European Commission’s forecast, Slovakia’s budget deficit is expected to reach 3.3% of the GDP in 2014 from an estimated 2.5% in 2013. The GDP is expected to expand by 2.3% in 2014 and further speed up to 3.2% in 2015 supported improving domestic demand.

According to the draft framework, the GDP growth is expected to accelerate to 3% next year from 2.3% projected for 2014 and further gain speed to 3.2% in 2016 and to 3.4% in 2017, in line with the EC’s forecast.

Slovakia's unemployment rate is seen falling to 13.2% in 2015 from 14% estimated for 2014. The rate should continue retreating to 12.3% and to 11.3% in the next two years. At the same time, the employment level is projected to increase by 0.6%, 0.7% and 0.9%, respectively, in the next three years, compared to an estimated growth of 0.3% in 2014.

Slovakia's jobless rate is one of the highest in Europe but local analysts expect it to stabilise and slightly decrease in 2014 supported by stronger economic activity. The unemployment rate edged down to 13.49% in February 2014 from 13.61% the month before, according to the latest available data from the Centre for Labour, Social Affairs and Family.

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