State to Also Use Cash Reserve to Stabilise Debt, Will Fall from 8 to 5% of GDP

Bratislava, October 21 (TASR) - Part of the stabilisation of public debt in the coming years will also include the active use of the state's cash reserve, according to Slovakia's Draft Budget Plan for 2025, which is submitted annually by eurozone countries to the European Commission (EC). From the current above-average levels of around 8 percent of gross domestic product (GDP), it should thus fall to the pre-pandemic average level of 5 percent of GDP by 2027. In the plan, the Finance Ministry pointed out that Slovakia's debt-to-GDP ratio has been declining over the past two years. This is because high nominal growth in the economy due to strong inflation has compensated for high government deficits. "In the current year, the debt will return to growth in line with previous forecasts and will reach 58.9 percent of GDP. This is due to the expected deficit of 5.8 percent of GDP, which can only be dampened to a lesser extent by receding inflation," said the ministry. The Finance Ministry also announced that in 2025, debt growth will be slowed by a decline in the general government deficit of more than 1 percent of GDP as a result of consolidation. Again, above-average nominal GDP growth, dragged by higher inflation, should cushion the impact of deficit management. Debt will thus increase only slightly year-on-year and still remain below 60 percent of GDP, forecasts the ministry in the budget plan. am/mcs