The Slovenia Times

Slovenia's Deficit to Drop Below 3% of GDP in 2015


The Stability Programme, which sets the course of fiscal consolidation in line with EU policy, says that the deficit would top out at 4.2% of GDP this year before dropping to 2.5% in 2015.

The deficit figure for this year includes outlays for completion of bank recapitalisation of 0.9% of GDP; excluding this one-off cost, the deficit would be at 3.2%.

The consolidation drive is also projected to improve the structural balance, a figure that is adjusted to the business cycle and excludes one-off expenditure.

Under the plan, Slovenia's average "fiscal effort" - the amount by which the structural deficit will drop - will be 0.48% annually through 2017, in line with commitments it made to the EU.

The primary balance, which excludes interest expenditure, will be in the red in 2014 (-0.7% of GDP) but is expected to turn into surplus in 2015 to reach 3.3% in 2018.

The Stability Programme is a key document that member states must submit to the European Commission along with the National Reform Programme. Slovenia has until the end of April to send the documents to Brussels.

Like the majority of EU member states, Slovenia has formally been subject to an excessive deficit procedure since 2009.

It was originally told to reduce its deficit below 3% of GDP by 2013, but the Commission later deferred the deadline to 2015 after finding that the government was taking action on reform and fiscal consolidation.


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