Government expenditure will peak at an all-time high of €16.69 billion in 2023 before dropping to €15.51 billion in 2024 under budget documents endorsed by the National Assembly on 23 November. With substantial funds set aside for energy crisis mitigation, the deficit is to projected to hit 5.3% of GDP in 2023 and then fall below 3% in 2024.

The revised 2023 budget increases the projected expenditure by a quarter compared to the document passed by parliament a year ago as part of Slovenia's two-year budget planning.

The outlays include a EUR 1.2 billion reserve for potential measures to help households and companies cope with the energy and cost-of-living crises.

Revenue is projected to reach EUR 13.38 billion, a 13% increase over the original 2023 budget. This will make for a deficit of EUR 3.3 billion.

In 2024, the government plans EUR 13.79 billion in revenue and EUR 15.51 billion in expenditure. The deficit is projected at EUR 1.7 billion.

Government says budget development-oriented

Finance Minister Klemen Boštjančič has argued the budgets are development-oriented even if the documents were drawn up amid the uncertainty over the energy crisis and continued presence of Covid-19.

Investments and investment transfers in 2023 are budgeted at a record high of EUR 2.4 billion. The figure is to drop to EUR 1.8 billion in 2024, the minister told MPs during budget debate.

Budgetary funds and various EU funding mechanisms would be tapped to boost green investment and investment in digitalisation. The minister also listed investments in healthcare, research and development, and in making the economy more competitive as priorities.

Along with the budgets, parliament also endorsed changes to the general government framework regulation which increase the cap on general government expenditure to EUR 30.1 billion in 2023 and EUR 29.6 billion in 2024.

Concern about high spending

The opposition lambasted the government over the budget documents. They raised issue in particular with the historically high expenditure, arguing the deficit was excessive and revenue projections too optimistic.

Concerns about high current expenditure were also raised by the European Commission, which in its assessment of Slovenia's 2023 budgetary plan on 22 November warned that current expenditure growth goes against the recommendations issued in spring.

Back than the Commission urged EU member states to ensure that the growth of nationally financed primary current expenditure is in line with an overall neutral policy, taking into account continued temporary and targeted support to households and businesses most vulnerable to energy price hikes and to people fleeing Ukraine.

The Commission, which based its assessment on the budgetary plan sent in by Slovenia in the autumn, could not say yet whether those measures were temporary or targeted because the country did not yet sufficiently detail them in the budgetary plan.

Overall, the Commission finds Slovenia's draft budgetary plan to be partly in line with the fiscal guidance contained in the recommendations issued in spring as the country made limited progress on recommendations for structural reforms.

On a positive note, the Commission did note plans to finance public investment for green and digital transitions, including by making use of the Recovery and Resilience Facility and other EU funds.