Ljubljana, 30 December (STA) - Slovenia's public deficit in the third quarter of 2010 stood at EUR 421m or 4.5% of GDP in what is the first year-on-year fall in two years, the Statistics Office presented at a press conference on Thursday. Public deficit in Q3 last year was EUR 444m or 4.9% of GDP.
In the July-September period, total revenues increased by 3.6% year-on-year in nominal terms, whereas expenditure only rose by 2.7%.
The falling trend of nominal revenues was meanwhile cut off already in the second quarter.
On the annual level, the deficit in Slovenia's public finances at the end of September was slightly lower at EUR 2.4bn or 6.7% of GDP compared to the end of the second quarter when it stood at EUR 2.42bn or 6.8% of GDP.
According to Andrej Flajs of the Statistics Office, the country's public finances seem to have reached the bottom, yet the positive trends are not distinctive enough to know how long it will take for the public purse to bounce.
The Q4 deficit is estimated at EUR 300m-400m, while it stood at EUR 637m in the same period last year. The annual public deficit for 2010 should thus reach 6% to 6.4% of GDP, although it was initially estimated at 5.6% of GDP.
Flajs noted that the first three months of 2011 will be crucial for the consolidation of Slovenia's public finances and as the deficit is expected to be high in this period, the threshold for knowing if the situation is stabilising will be at EUR 700m.
He said the key factors in the consolidation would be the growth of GDP and employment as well as freezing public spending despite growing revenues. He believes increasing public spending would not help the economy.
The main reason for the slower growth of public spending was meanwhile the slower growth of social compensations, while the annual growth of workers' expenditures went from 3.5% in the second to 4.9% in the third quarter.
The total revenues from taxes and social contributions in Q3 were up 1.4% year-on-year, which is 0.7 percentage points more than in Q2.
Public debt has stabilised below 38% of GDP, standing at EUR 13.555bn or 37.7% of GDP in the third quarter (+0.1 percentage points from Q1 and -0.2 points from Q1) and estimated at EUR 13.559bn or 37.9% of GDP at the end of the year.
Flajs stressed as positive that Slovenia generated a EUR 93m surplus in foreign transactions in the third quarter, mostly due to a EUR 274m surplus in the trade in goods and services, which stood at EUR 79m in Q3 of 2009.
In the first nine months of 2010, Slovenia made a surplus of EUR 50m in foreign transactions, while making a EUR 410m loss in the same period last year.