The Slovenia Times

Fiscal Council urges more budgetary restraint


Responding to fiscal data for the first quarter and the government's planning of the budgets for the coming two years, the council wrote that the fiscal goals Slovenia had committed to at the European level were attainable given the current figures.

However, it added that the primary structural surplus would also decrease this year even if the fiscal targets are met.

"This indicates a continuation of a pro-cyclical expansionary fiscal policy, which we feel is not appropriate in the current macroeconomic circumstances," the watchdog said.

According to the the council, the economy is passing into the mature stage of the boom cycle. Given the skills gap on the labour market, cost and price pressure is mounting and presents a threat to Slovenia's export competitiveness.

Uncertainty is also felt in the international arena, mostly because of the trade disputes between the US and other major economies.

Thus, the Fiscal Council is urging fiscal caution, criticising the drafters of the budget plan for insufficiently exploring the effects on public finances, especially in terms of long-term sustainability.

The council is expected to issue a detailed assessment of the budgets for the coming two years after they are adopted by the government.


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