RRZ Estimates That Deficit Will Decrease to 4.4 percent of GDP This Year

Bratislava, 30 January (TASR) - In its January fiscal 'traffic light' prognosis published on Friday, the Budgetary Responsibility Council (RRZ) expects the general government deficit to drop from last year's estimated 5 percent to 4.4 percent of GDP (or €6.2 billion) in 2026. The negative deviation from the budget target reaches 0.3 percent of GDP (€402 billion), which means a medium risk for implementing the approved budget. The most significant negative deviation in RRZ's estimate when compared to the targeted budget is a shortfall in tax and levy revenues, especially lower-than-expected revenues from labour-related taxes and value-added tax (VAT). Within the framework of the its budgetary traffic-light prognosis, RRZ estimates cumulative growth in net expenditures as of 2024, which mustn't exceed a maximum rate permitted under current European fiscal rules. The estimated cumulative growth in net expenditures amounts to 7.4 percent, which is 3.8 percentage points below the permitted growth rate, with the buffer standing at 2.8 percent without the application of the defence clause. RRZ also anticipates that the nominal public expenditure ceiling set under the approved budget will be met. According to the council, public expenditures falling below the ceiling will reach €61.6 billion, meaning that the expenditure limit approved by Parliament shouldn't be exceeded. ko/df