www.fs-rs.si / News / News / Assessment by the Fiscal Council: Assessment of budgetary documents for 2023 and 2024
Published: 10/17/2022

Assessment by the Fiscal Council: Assessment of budgetary documents for 2023 and 2024

Under current circumstances, fiscal policy needs to maintain the flexibility to act fast and ensure effective measures to cushion the blow of the cost of living crisis but at the same time avoid creating additional inflationary pressures and putting at risk the sustainability of public debt in the medium term. The draft budgets have taken such orientations into account to some extent, but they come with a number of shortcomings and risks. We assess that the fiscal stimulus envisaged in the proposed budget documents, mainly in the form of a further increase in the already high level of investment, is neither necessary nor appropriate under the given circumstances and in view of expected economic trends. The assessment of projections in the submitted budget documents was made more difficult as their basis was set unrealistically in the 2022 revised budget. This increases the likelihood of higher-than-projected growth rates in 2023, particularly for government expenditure. In addition to the continued acceleration of investments, the rapid growth in expenditure is primarily due to discretionary measures taken after the entry into force of the applicable budget last autumn. These measures, coupled with a deteriorated starting position of public finances in 2022, the envisaged large-scale measures to tackle the cost of living crisis and the cooling of economic activity, contribute to the projected high deficit in 2023.

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