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Pociatek: Deficit Higher Due to Worse Economy of Municipalities
Thursday 22 April 2010 Zoom in | Print page
Bratislava, April 22 (TASR) - According to Finance Minister Jan Pociatek, it was mainly the poorer-than-expected economic results of municipalities that caused the public finance deficit to end up on 6.8 percent of GDP instead of the projected 6.3 percent.
Following the fiscal decentralisation introduction in 2006, municipalities have their own economies, set apart from the state budget and outside the influence of the central Government. "In 2009, the results of local administrations were by €255 million worse than projected. We can only take due note of this, and factor it into the (national) deficit," said Pociatek.
In this connection, the minister pointed out that the accounting methodology applied by municipalities (ESA95) differs from that used by the state (EU-harmonised), which always creates scope for certain differences. The use of methodology should be unified in the future, Pociatek said, adding that the Government agrees on this along with the municipalities themselves – with the objective to scrap the ESA95 methodology.
Slovakia's public finance deficit reached €4.29 billion last year, or 6.77 percent of GDP, according to recent data published by the Slovak Statistics Office and sent to Eurostat in Brussels. The deficit exceeded the earlier expectations of 6.3 percent, which was already a revised estimate. The original estimate of 2.1 percent had to be corrected by the Finance Ministry in the scope of last year. By comparison, the deficit stood at 2.3 percent of GDP in 2008. The ministry officially counts on reducing the deficit to 5.5 percent this year.
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