NBS Analysts: Projected Deficit Next Year Achievable, May Be Even Lower

Bratislava, November 27 (TASR) - The planned public finance deficit for next year of 4.7 percent of the gross domestic product (GDP) is achievable, analysts of Slovakia's central bank (NBS) stated in the current analysis of the draft general government budget for 2025-2027, and they even expect the deficit to be slightly lower, at 4.5 percent of GDP. Compared to what the government expects this year, the deficit is anticipated to fall by 1.1 percentage point (pp) next year, according to the budget. The main contribution to achieving this target will come from a package of measures to consolidate public finances totalling 1.9 percent of GDP. In this context, analysts noted that the adopted consolidation package is partly budgeted for new expenditure titles. They pointed out that although Slovakia is one of the eight euro area countries reducing its deficit between 2024-2025, it is also the only one increasing its spending. The deficit target is still the second highest in the euro area. In the next two years, the budget targets are set for a gradual reduction of the deficit by 1 p.p. and 0.7 p.p., but without specified measures so far. "To achieve the targets, additional measures of 0.4 percent of GDP are needed in 2026 and an additional 1.5 percent of GDP in 2027. Without these measures, the budget envisages deficits of 4.2 percent and 4.9 percent of GDP for 2025 and 2026, respectively," stated the analysts. If the budgetary targets are achieved, Slovakia's public debt should stabilise at 60.5 percent of GDP in 2027, which is about 10 p.p. above the debt brake cap. If additional measures aren't taken, the difference with the debt cap could be more than 15 p.p. am/mcs