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Slovenia Business Week no. 23/2005: European Commission Forecasts Higher Deficit than Government

The European Commission has forecast a budget deficit of 2.2% of GDP for Slovenia for this year, compared to the Slovenian government's forecast of 1.9% of GDP

The European Commission has forecast a budget deficit of 2.2% of GDP for Slovenia for this year, compared to the Slovenian government's forecast of 1.9% of GDP.

In a report on public finances in the Economic and Monetary Union, the Commission bases its forecast on the "absence of corrective measures in the emerging supplementary budget, and taking into account the plans proposed by the new government."

The difference between the government's and the Commission's forecast is similar for 2006, as the two foresee deficits of 2.1% and 1.8%, respectively. The deficit is to drop gradually from then on, to 1.1% of GDP in 2007.

Yet the Commission also points out that Slovenia posted a deficit of 1.9% of GDP in 2004, whereas it had expected it to be at 2.1%.

In order to meet the criteria for the euro, Slovenia may not have a deficit in excess of 3% of GDP, a figure which it last exceeded in 2000.

In the report, the Commission has assessed the condition in all EU members. The general conclusion is that overall deficit rate went down last year for the first time in years.

Eleven EU members last year had a deficit in excess of 3% of GDP, including four eurozone countries.

Source: Slovene Press Agency STA

Author: STA