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National budget deficit drops to EUR 346m in H1

Ljubljana, 03 July (STA) - The national budget deficit stood at EUR 346 million in the first half of 2024, down 15% from the same period in 2023. Excluding the direct impact of emergency measures, the figure would be at EUR 60 million, shows preliminary data from the Fiscal Council.

Excluding the emergency measures, national budget revenue grew by 7.9% in the first six months of 2024, which is a much brisker pace than in the same period in 2023 when the increase was at 0.5%.

The Fiscal Council notes that this is almost exclusively due to higher corporate tax revenue. The contribution of income tax revenue was also higher, while VAT revenue growth has slowed down.

Excluding the emergency measures, the pace at which budget expenditure increased accelerated, from 7.2% to 10.6%.

The main reason for this can be found in the category "other expenditure" where some EUR 350 million was spent in June alone and nearly EUR 500 million in the previous five months.

As part of the emergency measures in the first half of the year, a total of EUR 193 million was paid out to help finance reconstruction after the August 2023 floods, of which roughly a half went for watercourse works.

Another EUR 94 million was allocated to help mitigate the impact of price hikes, mostly going to electricity and gas suppliers, and EUR 10 million was dedicated to measures related to Covid.

Same as the national budget, the state pension and health insurers, and municipal budgets also ran a deficit.

The Fiscal Council and other local and international institutions project that by the end of the year these deficits will drop below the limits set in the existing budget documents.

However, the Council warns that due to many emergency measures and lack of a systemic approach to long-term challenges transparency of public finances is worse than before the Covid epidemic, which makes planning and monitoring fiscal policy more difficult.

Experts on the Council have called on the government to take a more responsible approach when drafting the upcoming budget documents.

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