Evaluation of the General Government Budget Proposal for 2020-2022

The Council for Budget Responsibility (CBR) has updated its evaluation of the general government budget for 2020-2022 in response to the State Budget Act approved by the parliament. The evaluation also takes into account additional documents provided by the Ministry of Finance of the Slovak Republic (the Ministry and/or the Ministry of Finance).

The budgetary objectives have not changed compared to the general government (GG) budget proposal submitted by the government. The 2020 general government deficit target is set at 0.49 % of GDP, with a balanced budget to be achieved in the subsequent years. The difference between the budgetary objectives and the deficits set out in the budget for 2021 and 2022 have increased against the budget proposal, amounting to 0.77 % of GDP in 2021 and 1.23 % of GDP in 2022, since the adopted changes have, according to the Ministry, a neutral impact on the balance in 2020 and a moderately negative impact in 2021 and 2022.

The risks identified by the CBR in the budget proposal remain present even after its approval in the parliament, even though their amount fell slightly. Compared to the evaluation of the budget proposal, the balance estimated for 2019 improved, and the risks for 2020 through 2022 decreased. It means that assuming that no additional measures are adopted, the deficit will grow at a slightly slower pace over the next years and may reach 2.4 % of GDP in 2022. The CBR has updated the estimate of gross debt development to cover the change in the level of risks between 2020 and 2022. In comparison with the evaluation of the budget proposal, the gross debt estimate has declined slightly over the entire forecast period and is expected to stand at 50.2 % of GDP at the end of 2022. The assumption that additional measures would have to be adopted throughout the entire period in order to keep the debt outside the sanction brackets specified in the Fiscal Responsibility Act continues to apply.