FinMIn: Deficit Will Exceed €5 bn and Reach 7.8 percent of GDP in 2010

Bratislava, September 8 (TASR) - The current estimate for the this year's public-finance deficit stands at 7.8 percent of GDP, meaning that it will be €1.403 billion higher than the originally-planned 5.5 percent, reaching €5.109 billion, the Finance Ministry stated in its report on the state and development of public finances, which was approved by the Government on Wednesday.

The most recent prognoses rely on a more remarkable recovery in the Slovak economy, which was originally expected in the state budget for this year as well. When it comes to tax and levy incomes, the growth structure is less favourable, however, as a lower growth in salaries and a deeper cut in employment figures is expected, with resulting lower household consumption.

"An extensive share of the unfulfilled budget resulted from the fact that the 2010 budget was badly prepared," said Finance Minister Ivan Miklos (SDKU-DS), criticising his predecessor Jan Pociatek (Smer-SD).

The 2010 budget, which was approved last year, anticipated that local authorities would be able to cope financially, even though this was clearly unrealistic at that time, the ministry claims. The deficit has also been increased by deferred expenditures from 2009, a loss of incomes from the sale of emission quotas, the losses posted by state-run railway-freight companies, and recurring devastating floods in 2010.

"Based on the information currently available, it is expected that the state budget will increase the deficit by €647.8 million," reads the ministry's report.

In addition, state-insurer Socialna Poistovna expects to see its financial results deteriorate by €94 million. Local councils and the regional authorities expect an extra €404 million loss, while the National Property Fund (FNM) anticipates losing an extra €202 million. The only positive influence on the deficit will come from government assets, which are now expected to be €62 million higher than originally thought.

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