IFP: State Revenues Should Grow Much Faster than Expenditures Next Year

Bratislava, October 7 (TASR) - The state's tax and levy revenues should grow significantly faster year-on-year (10.1 percent) than accumulated expenditures (2.9 percent) next year, according to the October tax prognosis published by the Finance Ministry's Financial Policy Institute (IFP) on Monday, which involves an improvement from the previous (June) prognosis. This would be a significant change compared to this year, when expenditures should grow by 20.2 percent and revenues by only 8.4 percent. "The decisive factor in this prognosis is the inclusion of a €2.4-billion influence from the consolidation package [which forms part of the total sum of the package amounting to €2.7 billion - ed. note]. The economy's response to the impact of consolidation measures will be felt more keenly only as of 2026. A number of uncertainties are associated with estimating the effects of consolidation measures over the entire period of the forecast," stressed IFP in its commentary on the prognosis. According to IFP, the growth of selected expenditures this year is being driven by a double-digit increase in pensions, as well as legislation introducing the right to early retirement after 40 years of work. Following dynamic developments in the past two years, the growth of selected expenditures should stabilise at lower levels as of 2025. Changes in parental pensions should dampen the growth in expenditures. However, pensions will increase more significantly in 2026 due to higher expected inflation. Compared to the previous (June) prognosis, tax and levy revenues in 2025-2028 should increase significantly thanks to the adoption of consolidation measures, namely worth €1.9-2.3 billion in individual years. Meanwhile, slower GDP growth will have the opposite effect. "Compared to the June prognosis, consolidation will dampen growth in revenues in 2026-2028 by €131-638 million," quantified IPF. ko/df