Bloomberg News

Slovak Tax Receipts a ‘Serious Threat’ to Budget, Kazimir Says

November 27, 2012

Slovakia’s budget goals face a “serious threat” from waning tax receipts, forcing the government to rewrite next year’s spending plan, Finance Minister Peter Kazimir said.

The slowing economy will cut tax receipts this year by 276 million euros ($357 million) and about 250 million euros in 2013, Kazimir told a news conference today in the capital, Bratislava. The government will trim spending to remain “as close as possible” to the original 2012 deficit target of 4.6 percent of gross domestic product, he said.

The east euro-region country is striving to improve its public finances at a time when the slowdown in western Europe is hurting demand for Slovak exports. To distance itself from the euro-area’s debt crisis, the administration has kept to a pledge to reduce the budget deficit below the European Union’s limit of 3 percent of GDP in 2013, Kazimir said.

“We are not giving it up, there is still a chance for meeting” the 2012 budget goal, Kazimir said. “We still hope to prepare a 2013 budget with a deficit below the EU’s limit without the need for more measures. We have a buffer.”

The government will withdraw the budget from parliament and resubmit it next month, Kazimir said. The spending plan targeted a shortfall equal to 2.94 percent of GDP.

The economy is set to grow 2.6 percent in 2012, the fastest pace in the euro area, which may shrink 0.4 percent this year, according to European Commission forecasts. Growth in 2013 is projected to be the second-fastest after Estonia.

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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