The primary deficit (excluding the costs associated with the crisis and debt servicing) rose 0.9 percentage points over the year before to 4% of GDP.

The general government deficit sky-rocketed mainly due to the conversion in December 2012 of EUR 320m-worth contingent convertible (CoCo) bonds as part of the recapitalisation of the state-owned bank NLB.

The recent recapitalisation of the NKBM bank to the tune of EUR 100m will be included in the calculation of the deficit for the second quarter of 2013.

The NLB recapitalisation excluded, the deficit would have stood at 6.5% of GDP, but this is still 1.2 percentage higher than a year ago, according to the Statistics Office.

The other reason for the rising deficit was a drop in the total revenue of the general government in nominal terms, from EUR 3.795bn in Q1 last year to EUR 3.636bn or 4.2%.

"The state of public finances has deteriorated, much like GDP has fallen. The fundamental characteristic is the nominal contraction in revenues," said Andrej Flajs of the Statistics Office.

"The robust cut in spending last year translated into a drop in consumption, which subsequently brought about a drop in GDP...and a drop in revenues," he said.

Among the key revenue groups, tax revenues and social security contributions contracted the most in nominal terms, by 4.1% and 4.9% respectively.

The total expenditure of the general government meanwhile dropped by only 1.9% (NLB recapitalisation excluded) in the same period.

Interest expenditure surged 7.5% year-on-year whereas decreases were recorded in outlays on gross capital formation (-8.8%), compensation of employees (-5.9%) and social benefits (-1.4%).

Public debt, meanwhile, dropped by EUR 68m to EUR 19.1bn, but due to the contraction of GDP, it rose in relative terms, to 54.5% of GDP from 54.1% a year earlier.

Flajs said the first goal of the government should be to correct the primary deficit (the total deficit less the costs of the crisis and servicing of debt).

While Slovenia registered a small primary surplus in the last quarter of 2012, the primary deficit in the first quarter of this year stood at EUR 329m, which is EUR 64m more than in the same period last year.

At the end of the year, the primary deficit is expected to stand at 2.5%, which is 0.8 percentage points more than in 2012.