RRZ: Extension of Across-the-board Energy Subsidies May Cost another €1 billion

Bratislava, March 17 (TASR) - Continuing the policy of capping regulated gas and heating prices for households may mean costs for Slovak public finances totalling €1 billion in the next two years, analysts from the Budget Responsibility Council (RRZ) pointed out in a recent commentary, adding that unless the government adopts additional consolidation measures, this would mean an increase in the planned deficit of 0.4 percent of gross domestic product (GDP) in 2026 and 0.3 percent of GDP in 2027. The analysts pointed out that across-the-board subsidies of regulated energy prices are nothing new. They are in fact the continuation of an established policy in recent years of postponing price increases at the expense of higher public spending. In 2023, the cost of this measure reached almost €3 billion as a result of the security and energy crisis of 2022. Last year, energy aid amounted to just over €1 billion. "While the initial rapid response in the form of across-the-board aid was understandable given the size of the shock and the lack of time to prepare for targeted aid (applied by several EU countries), as time passes and most of this price shock has passed, it is much less objectively justifiable to continue with across-the-board aid," stated the RRZ analysts. am/df