Ministry of Finance of the Slovak Republic submits formal budget to tripartite meeting
Last update: 09.10.2023 13:05
Today, the Ministry of Finance of the Slovak Republic officially submitted the draft of next year's state budget. It will be discussed today by the Economic and Social Council of the Slovak Republic and then on Wednesday by the Government of the Slovak Republic. However, the Ministry of Finance reiterates that this is a formal balanced budget, which it has to present in this form according to the current law.
The need to prepare and present a balanced budget for next year has been discussed for months. After National Council’s vote of no-confidence in the caretaker government and the MPs’ failure to amend the law on the debt brake, the Ministry of Finance had to submit the draft in this form according to the law. However, a balanced budget for next year is not a realistic scenario, as this sanction will disappear with the arrival of the new government. The Ministry of Finance of the Slovak Republic does not even recommend its approval in the current economic situation.
“We are obliged to prepare a balanced budget draft on the basis of the Constitutional Act on Budget Responsibility, but neither the Ministry of Finance, nor I personally, will initiate and recommend the approval of this draft in the plenary of the Parliament at this moment. On the contrary, we will actively highlight the risks of such a huge consolidation now,” said Finance Minister Michal Horváth, adding that the state must gradually work its way towards a balanced budget so as not to damage the economy.
According to the latest forecast of the Ministry of Finance of the Slovak Republic, in the current situation the state would have to “cut” its spending by about 7% of GDP from one year to the next, and such a move would significantly damage our entire economy. It is estimated that it would fall by almost 6.5%, which would also have a significant negative impact on living standards. Wages would fall by 4% and unemployment would rise by around 130 000 people. A deep recession would directly threaten the functioning of the state and public state institutions.
The Ministry of Finance of the Slovak Republic expects to prepare a proper, realistic budget after the new government takes office, taking into account all current economic aspects and priorities in individual areas. In order to avoid a repetition of the current situation with the balanced budget, the Ministry of Finance of the Slovak Republic has prepared theses on the amendment to the law on the debt brake, which it will announce soon.
Ministry of Finance of the Slovak Republic