Evaluation of Medium-term Budgetary Objectives for 2016-2018

Evaluation of Medium-term Budgetary Objectives for 2016-2018
The medium-term objectives approved for 2016–2018 confirm the intention of the government to continue the process of reducing general government deficit and improving the long-term sustainability of public finances. The CBR views as positive that the government remains consistent in presenting its intention to achieve a nearly balanced budget in 2017 (without temporary and one-off effects). The meeting of this commitment at the European level may increase Slovakia’s credibility in the eyes of foreign investors.

On the other hand, the suggested way in which the medium-term objective is to be achieved carries certain risks. The CBR views as negative in particular the following four aspects: 1) relaxation of the deficit targets in nominal terms, 2) optimistic estimates of the economic growth potential, 3) missed opportunity to make use some of the positive effects to step up consolidation, and 4) a relatively high volume of potential risks without indicating the ways in which these risks will be mitigated, averted or offset by other measures.

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