Business News

Public Budget Deficit at 8% of GDP in Q2

Ljubljana, 30 September (STA) - Slovenia's public budget deficit in the second quarter of 2010 stood at EUR 749m or 8% of GDP, up from EUR 671m or 7.4% of GDP in the same period last year. Presenting the data on Thursday, Andrej Flajs of the Statistics Office said that the Finance Ministry's target of a 5.6% deficit for 2010 was still attainable.

"Social transfers are the key problem, they are however already on the decrease," Flajs told the press, saying that the 5.6% goal can be attained with serious cuts in expenditure. In 2011 a deficit of around 3% is possible if nominal spending is decreased "by slightly more than one percentage point".

While feeling confident about the third quarter, Flajs said that "the last quarter will be a problem, since the deficit is usually relatively larger then, depending on inflation and economic growth".

Total state revenue was up 1.5% in nominal terms in the second quarter year-on-year, while total expenditure was up 3%. Deficit stood at EUR 749 in the first as well as in the second quarter, or at 9% and 8% of GDP respectively.

The difference between nominal growth and expenditure decreased from 7 to 1.5 percentage points in the second compared to the first quarter, Flajs pointed out.

The increase in expenditure was much smaller in the second quarter, especially in social transfers and gross investments. Interest and subsidy expenditure continued to grow fast.

Revenue was meanwhile up above all as a result of 2.2% more being collected from social security contributions.

State debt was at 37.5% of GDP in the second quarter, while it stood at EUR 37.7% in the first quarter.

Audited figures for past years meanwhile show a EUR 2.061bn or 5.8% GDP state deficit in 2009 and a EUR 667m or 1.8% GDP deficit in 2008. Corrections to corporate tax revenue figures were the reason for the 2009 deficit ending up bigger than originally reported, Flajs said.

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