Dun&Bradstreet maintains Slovenia's risk rating at DB2c in its latest report, the highest rating in Eastern Europe
Dun&Bradstreet maintains Slovenia's risk rating at DB2c in its latest report, the highest rating in Eastern Europe. However, the rating firm is sceptical about the government's plan to cut budget spending.
The report quotes Finance Minister Andrej Bajuk as saying that spending on areas such as technology, science and competitiveness will be increased, along with more money for transport infrastructure, health care and regional development, whereas funds are to be cut for justice, the Motorway Company and the Labour Ministry.
In addition, the government expects to downsize the public administration, with 1% of civil service posts to be cut. "This is a highly ambitious undertaking and D&B is not convinced that such a drastic cut in government spending is either feasible or desirable, given the potential negative effects on overall real GDP growth," the report says.
The rating firm therefore "doubts the government's choice of target," as it expects the deficit under EU-compatible methodology to remain at 1.9% of GDP in 2005, before declining to 1.6% of GDP in 2006. "This level of deficit is not excessive and remains well below the 3.0% of GDP ceiling required for adoption of the euro in due course."
Source: Slovene Press Agency STA