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Makuch: NBS Always Needs to Be Unhappy With State Budgeting

Bratislava, January 12 (TASR) - Every national bank should be discontent with the way the government manages the state budget in order for improvements to be made, said new Slovak central bank (NBS) governor Jozef Makuch on Tuesday.

"Of course, governments do manage the budget to the best of their abilities, but there's always room for a slight improvement," said Makuch.

His predecessor Ivan Sramko recently told TASR that the Government needs to react to the economic situation more quickly in future than it did in 2009. As much as the NBS appreciates the effort to save more than €700 million in the budget, measures to achieve this must have a realistic and tenable basis.

"Consolidation is based first and foremost on the revival of the revenue side of public finances and an increase in nominal GDP. This approach, however, is closely connected with uncertainty and developments outside Slovakia in particular," cautioned Sramko. In order to lower the deficit, active measures regarding expenditures need to be made, so that the pace of structural consolidation will speed up and the savings achieved will be tenable and long-term.

According to the official public-finance consolidation plan, the deficit should fall from 6.3 percent of GDP in 2009 to 5.5 percent this year. It should reach 3 percent, the level required by European budget regulations, in gradual stages by 2012.

The new NBS governor views unemployment as the greatest threat to Slovakia's economy in the near future. "The crisis has gone away as far as GDP and other economic parameters are concerned. However, its impact on unemployment is still present. I see the greatest threat in this respect," said Makuch.

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