Bloomberg News

Slovak 2012 Budget Deficit to Miss Target as Economy Slows

October 27, 2011

(Updates with GDP forecast in second paragraph.)

Oct. 27 (Bloomberg) -- The Slovak budget deficit is set to exceed the government’s target next year as the debt crisis is hurting growth prospects in the euro-region, Finance Minister Ivan Miklos said.

The economy will expand at a slower pace than 3.3 percent projected in the spending plan for next year, causing a revenue shortfall of several hundred million euros, Miklos told reporters today in the capital Bratislava.

Miklos didn’t specify how much the 2012 deficit will overshoot the target of 3.8 percent of gross domestic product. The collapse of the ruling coalition earlier this month makes it impossible for the caretaking government to push through measures that would bring the gap back to the target, he added.

The export-oriented Slovak economy is vulnerable to slowing demand from western Europe, its main trading partner. The European Bank for Reconstruction and Development on Oct. 18 slashed its forecast for Slovakia’s GDP growth next year by 3 percentage points to 1.1 percent as the debt crisis spread through Europe.

--Editors: Douglas Lytle, Zoe Schneeweiss

To contact the reporter on this story: Radoslav Tomek in Bratislava at rtomek@bloomberg.net

To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net


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