In the first three quarters of 2019, the general government balance recorded a surplus of 0.7% of GDP and was thus within the forecast of the October Draft Budgetary Plan, which projected a surplus of 0.8% of GDP for the whole of 2019. Achieving the nominal surplus was mainly the result of further improvement in […]
At the end of 2019, the Fiscal Council held a regular consultation with experts in public finance and economic policy. Participants to the meeting were Marijana Bednaš, Anže Burger, Saša Jazbec, Bogomir Kovač, Janez Šušteršič and Boštjan Vasle. On the initiative of the Fiscal Council, the discussion touched upon two broad areas: fiscal rules and long-term fiscal sustainability.
Having reviewed the supplemented proposal of the budget documents (the supplemented 2020-2021 Budget proposal and the supplemented 2020 Draft Budgetary Plan), the Fiscal Council continues to assess that the fiscal development projections are clouded by significant negative risks. While projections formally comply with the fiscal rules, the Fiscal Council still notes inconsistencies between the projections of certain items and the proposed or applicable measures. The materialisation of only a small fraction of identified risks could result in a deviation from formal compliance.
Fiscal rules need to be stable and should clearly impose restrictions on the economic policy when it comes to the selection of measures that would lead to excessive deficits and unsustainable levels of the general government debt.
The Fiscal Council assesses that the Proposal of budgets of the Republic of Slovenia for 2020 and 2021 is clouded by significant negative risks. While projections are formally compliant with the fiscal rules, even a realisation of a small fraction of identified risks could result in a deviation from formal compliance.
The calculations submitted to the Fiscal Council by the Ministry of Labour, Family, Social Affairs and Equal Opportunities are similar to the estimates made by the Fiscal Council and indicate that the proposed legislation would have a significant impact on the long-term increase in the general government expenditure.
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