ISA: Changing Demographics Already Increasing Slovakia's Public Finance Deficit

Bratislava, September 28 (TASR) - Contributions to the public budget by economically active people didn't cover spending on children and the elderly last year, creating a deficit of €1.7 billion, which will increase over time, the Institute for Strategy and Analysis (ISA) stated in its latest review of economic developments. The institute pointed out that the net contributors to public finances are mainly people of working age, which means between 15 and 64 years of age. In 2023, according to the Budgetary Responsibility Council (RRZ), their average contribution was €4,900 per person, mainly through taxes and levies. "Although the number of contributors is almost double compared to the inactive population, it isn't enough," noted the ISA. Last year, the average of net public transfers and services per inactive inhabitant, that is for children and pensioners, was €10,400. An average of €9,500 was spent per child up to the age of 14, most of it on education and family policy. An average of €11,100 was spent on each senior inhabitant over 65, most of it on pensions and health, stated the institute. The ISA pointed out that already in 2018, the ratio of children to seniors had levelled off and then continued to decline. The ratio of net contributors to net beneficiaries is also declining. This combination will exacerbate the deficit going forward. "The possible solutions include changing public policies on taxes and transfers, importing labour or increasing labour productivity," stated the ISA. am/mcs