BRATISLAVA, September 3, (WEBNOVINY) — Slovakia’s state budget deficit in late August widened to EUR 2.675 billion. Compared to the previous month, it grew by almost EUR 350 million. The eight-month deficit was higher year-on-year by 32.3 percent, when it totaled EUR 2.022 billion as of late August 2011. According to data released by the Finance Ministry, at the end of August of 2012 the budget deficit reached 72.8 percent of its annual budgeted amount.
The deteriorated development of the state budget is connected with a slower collection of revenue as well as a slight increase in overall expenditures. Overall revenue of the state budget at the end of August fell year-on-year by 3.2 percent to EUR 7.105 billion, representing 52.1 percent of the amount planned for the whole year. Budget spending over the first eight months of this year swelled 4.4 percent to EUR 9.78 billion, which is 56.5 percent of the annual budgeted expenditures.
Overall revenue of the state budget was negatively influenced by slower transfers from the EU budget. Tax revenue, which constitutes the largest portion of total revenue, increased slightly by 0.9 percent to EUR 5.575 billion, which is 60.4 percent of the annual projection. In particular, collection of the value added tax lagged behind, where EUR 2.782 billion was collected, which was 5.5 percent less than in the same period of last year. The amount of collected excise taxes rose only moderately from last year, namely by 0.5 percent to EUR 1.306 billion.
The finance department records a more positive development in collected corporate income tax, going up 11.2 percent to EUR 1.252 billion from August of last year. This accounted for 67.2 percent of the plan. Revenue from withholding tax increased by 19.1 percent to EUR 118.7 million. In collected personal income tax, which is almost entirely transferred to municipal budgets as part of fiscal decentralization, the Finance Ministry at the end of the eighth month registered EUR 85.2 million. Non-tax budget revenue decreased by 8 percent to EUR 486.5 million.
As in previous months, lagging behind are revenues from grants and transfers and among them especially from the European Union budget. Overall, the revenue from grants and transfers dropped 19 percent from last year to EUR 1.043 billion. From the EU budget, revenue decreased by 19.1 percent to EUR 1.027 billion or 33.3 percent of the volume budgeted for the whole year.
On the expenditure side of the state budget, current expenditures, which mostly ensure the functioning of government organizations and their wages, increased by 7.2 percent to EUR 8.766 billion. Capital expenditure fell by 14.4 percent to EUR 1.014 billion.
The Slovak Parliament last year approved this year’s budget with a deficit of 4.6 percent of GDP. The initial plan counted with a more resolute consolidation of 3.8 percent of GDP, but these plans collided with the continuing financial and economic crisis and also the collapse of the government Iveta Radicova. Current Finance Minister Peter Kazimir says that achieving the deficit of 4.6 percent of GDP will require additional measures.
According to the approved budget, spending is budgeted at EUR 17.3 billion and revenue is budgeted at EUR 13.6 billion. The budget deficit thus can be a hit higher than EUR 3.6 billion.
SITA