Evaluation of Medium-term Budgetary Objectives for 2018-2021

The Council for Budget Responsibility (CBR) views positively that the new government has presented a budgetary framework that assumes continued deficit reductions towards meeting the medium-term budgetary objective and bringing the government budget into balance by 2020. The meeting of these objectives would contribute to improving the long-term sustainability indicator by 0.7 % of GDP. Considering the present assumptions, attaining the long-term sustainability of public finances would require additional measures amounting to 0.4 % of GDP, which would imply setting the budgetary objective at a structural surplus level of 0.4 % of GDP in 2021. With an increase in state budget expenditures by 1.0 % GDP in 2019 in comparison with the approved General Government Budget for 2018 – 2020 and, simultaneously, with a worsened budgetary objective for 2019, the necessary improvement of Slovakia’s fiscal position is being put off to the subsequent years. Slovakia’s consolidation targets have been mostly defined, in the long run, on the basis of requirements arising from European rules. According to the CBR, this is insufficiently reflecting the requirements of national fiscal rules, in particular as regards faster reduction of the general government debt and ensuring the long term sustainability of public finances.