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Slovenia Business Week no. 30: Govt Adopts Budget Documents for 2007 and 2008

The cabinet has adopted the changes to the 2007 budget and a budget bill for 2008 at its session on Thursday, 28 September. The budget deficit is expected to stand at 1% of GDP next year and 0.9% the following year, Finance Minister Andrej Bajuk said

According to Bajuk, the changes to the 2007 budget foresee revenues of EUR 7.7bn and expenditure of EUR 8.1bn. The deficit is to stand at around EUR 325m.  

In 2008, revenues are to grow to EUR 8.1bn and expenditure to EUR 8.4bn, with the budget deficit at EUR 307m.  

Bajuk stressed that science and technological development was among the fields that will see the highest increase in budget spending, as funds available for this purpose will rise by 10% in 2007 and a further 7.5% in 2008.  

Spending on the promotion of enterprise will grow by 9.6%, justice spending will rise by 8.1% on account of efforts to cut court backlogs and transport spending will be up 8.9% next year, the finance minister said.  

Bajuk added that there will be a 20.3% increase in spending on state roads in 2007. According to him, these roads have been neglected ever since Slovenia gained independence in 1991.  

Spending on wages in the public administration will be up 5% in 2007 and another 1.2% in 2008 due to the increase in the number of soldiers in the Armed Forces as part of the ongoing professionalisation.  

The budget documents were for the first time drawn up in euros as Slovenia gets ready to enter the eurozone on 1 January, Bajuk explained.  

He stressed that the government was not planning to raise VAT rates in 2007, although the 2008 budget envisages the possibility of an increase of the lower rate from 8.5% to 9% and the higher rate from 20% to 21%.  

Moreover, he announced that the government today adopted changes to the act on municipal funding that will decrease the amount municipalities get from the state but increase their own revenues.  

The law to municipal funding will be outlined in greater detail by Local Government and Regional Development Minister Ivan Zagar on Friday, 29 September.

Author: STA, Slovenian National Press Agency