According to the amending proposal, the state budget deficit in the last four months of this year will amount to as much as 1.7 billion euros. At the end of the year, there will be a deficit of 2.04 billion euros, of which 83.3 percent will be of everything produced in the last four months.
It can be seen from the graph that the deficit began to increase with the appearance of Golob’s coalition (June), they spent more every month than flowed into the state budget. In August, for example, spending was 342 million euros higher. Now, for the period from September to the end of December, they are planning an average loss of 425 million euros per month.
The data are shocking, as revenues to the state budget are increasing markedly with the recovery of economic activity and high growth (mainly tax) revenues, while expenses related to the epidemic are decreasing.
Half a billion euros less from European funds
The Fiscal Council predicts that revenue growth will slow down significantly in the last four months of the year, which is in line with the expected slowdown in economic activity. They also predict that the projection of revenues from EU funds has been reduced by 500 million euros compared to the existing budget. The withdrawal of funds from European funds is therefore slowed down, which we already know. During the time of this government, activities in this area almost stopped, this is now also confirmed by the Fiscal Council.
Record high growth in current consumption
On the basis of the above, the overall growth in consumption should slow down, but instead we are witnessing an enormous growth in current consumption, which, according to Golob’s proposal, will be record high this year mainly due to the expected strong strengthening in the last four months of the year.
The amending proposal for 2022 implicitly foresees a marked strengthening of consumption growth at the end of the year, even unrelated to investment plans, which has no basis in the currently valid measures. The Fiscal Council warns of this and adds: “The volume of spending, where we exclude the effect of investments in addition to one-off factors, is expected to increase this year by 11.4 percent, or by 1.2 billion euros, which would be a record high. Such growth would significantly exceed medium-term sustainable growth, determined by the currently estimated long-term growth of potential output at the level of around 4.5 percent.”
Flawed, unrealistic, estimated, dilettante, rude
They assess the amending budget proposal as unrealistic and add that the government does not fully consider the updated macroeconomic forecasts in the proposal, which further contributes to the unreliability of the presented public finance plans in the face of extremely uncertain conditions.
By: Vida Kocjan
