The Slovak economy’s likely growth this year will have a “limited” impact on the country’s budget, which means immediate measures will be needed to hit the deficit target, Finance Minister Peter Kazimir said.
The European Union raised today its forecast for Slovakia’s gross domestic product growth in 2012 to 1.8 percent from 1.2 percent. The revision is based mainly on external demand, which won’t raise revenue enough to offset other budget risks, Kazimir said in a phone interview from Bratislava today.
Prime Minister Robert Fico’s government wants to cut the deficit to insulate the country from the euro area’s debt crisis at a time when a European slowdown is weighing on the export- oriented Slovak economy. The growth forecast for Slovakia compares with a predicted 0.3 percent contraction in the euro region as a whole.
“Growth has been revised, but its impact on the budget is small,” Kazimir said. “We see bigger budget risks than the EU.”
The European Commission, the EU’s executive arm, predicted today that Slovakia’s budget deficit will, at 4.7 percent of GDP, exceed the target for this year. Kazimir said the government’s goal is still to cut it to 4.6 percent of GDP, and that will require additional measures.
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