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Slovenia Business Week no. 25: Parliament Passes 2007 Supplementary Budget

Parliament passed the supplementary budget bill for 2007 and an amended budget implementation act (45:22), which envisages two changes that raise the projected budget deficit from 1% to 1.2% of GDP in 2007

Parliament passed on Thursday, 12 July the supplementary budget bill for 2007 and an amended budget implementation act (45:22), which envisages two changes that raise the projected budget deficit from 1% to 1.2% of GDP in 2007.

The supplementary budget is needed because certain activities in the domain of the Public Agency for Rail Transport will be transferred to the newly established Directorate for the Management of Investment in Public Rail Infrastructure.

The second change is a supply of fresh capital to NLB, Slovenia's leading bank, in the amount of EUR 50m. The money will come from the proceeds from the recent sale of the majority stake in steel group SIJ.

Overall, budget revenues will remain unchanged at EUR 7.76bn while expenditures will increase by EUR 60.5m to EUR 8.087m. The general government deficit is expected to remain level at 1.4% of GDP.

Explaining the supplementary budget, Prime Minister Janez Jansa said that the reducing the general government deficit and retaining the public debt at a low level remained the priorities of the government's public finance policy.

Slovenia is committed to the mid-term goal of the EU's Stability and Growth Pact to keep the cyclically-adjusted general government deficit below 1% of GDP. "Due to pressing investment in rail infrastructure, we will reach this goal in 2009," Jansa said.

Despite the increased spending on rail investment, public spending will have been reduced by 3% of GDP during this government's term, he said.

According to Finance Minister Andrej Bajuk, given annual GDP growth of 4.7% the budget deficit will be at 24.7% of GDP in 2007, dropping to about 23% of GDP in 2009.

Source: Slovenian Press Agency STA

Author: STA, Slovenian National Press Agency