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General Govt Deficit Drops to 3.7% of GDP in 2012

Ljubljana, 29 March (STA) - The general government sector deficit in 2012 was estimated at EUR 1.315bn or 3.7% of GDP, which is significantly less than a year before when it stood at EUR 2.298bn or 6.4% of GDP, the Statistics Office said on Friday. National debt reached EUR 19.189bn or 54.1% of GDP at the end of 2012.

In the last quarter of 2012, the government deficit was estimated at EUR 136m or 1.6% of GDP, which is the lowest quarterly deficit since 2009. In the same period in 2011, it topped EUR 337m or 3.8% of GDP.

On the annual level, the deficit was gradually falling the entire year due to cuts in expenditure. "The deficit in 2012 dropped to the early 2009 level," the Statistics Office officials said.

Last year, total revenue of the state decreased by 0.4% in nominal terms, while total expenditure decreased by 5.7%.

In nominal terms, expenditure decreased the most in capital transfers (by 57% or EUR 423m), gross investments (by 19.6% or EUR 257m), welfare benefits (by 2.4% or EUR 171m), funds for employees (by 3.3% or EUR 151m) and in costs of goods and services (by 2.7% or EUR 67m).

The deficit was also lowered by specific transactions which are listed as one-off capital transfers (recapitalisations of state companies, acknowledging of state-owned companies' claims, super dividends and paying out of state guarantees).

Last year these transfers amounted to EUR 134m or 0.4% of GDP, of which EUR 61m was allocated for recapitalisation of banks. In 2011 EUR 459m or 1.3% was allocated for the purpose, of which EUR 243m went for recapitalisation.

Without the one-off transactions the government sector deficit would have stood at 3.3% of GDP in 2012, compared to 5.1% of GDP in 2011.

Social security funds reported a deficit of EUR 108m or 0.3% of GDP in 2012, which is significantly more than a year earlier, when deficit was estimated at EUR 9m.

The Statistics Office attributes the low 2011 deficit to the capital injection from the central government to the KAD pension fund in the amount of EUR 90m.

Consolidated Maastricht gross debt of the general government was estimated at 54.1% of GDP at the end of 2012, while a year before it stood at EUR 16.954bn or 46.9% of GDP.

The general government deficit for this year is estimated at EUR 1.499bn or 4.2% of GDP, where the recapitalisation of banks in the amount of EUR 420m or 1.2% of GDP in the first quarter is taken into account.

Without recapitalisation the deficit is projected to top EUR 1.079bn or 3% of GDP. At the end of the year the public debt is forecast to stand at EUR 21.016bn or 59.2% of GDP.

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