Overview

Business, / By STA, T. M.

The general government deficit was estimated at EUR 465m or 5.5% of Slovenia's GDP in the first quarter of 2014, down from EUR 856m or 10.5% of GDP in the same period last year, the Statistics Office said on Monday. Slovenia's public debt stood at 78.7% of GDP at the end of the January-to-March period.



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When excluding expenditure related to financial crisis, which was at EUR 322m in the same period last year, the deficit was down EUR 69m or 1 percentage point year-on-year.

But due to heavy borrowing for covering bank losses in the second half of December 2013, expenditure on interest payments increased in the first quarter of 2014 year-on-year, from EUR 207m or 2.6% of GDP to EUR 279m or 3.3% of GDP or by 35% in nominal terms.

The primary deficit (deficit without expenditure related to the financial crisis and the interest) was estimated at EUR 186m or 2.2% of GDP in the first quarter, after standing at EUR 327m or 4.0% of GDP in the same period last year.

The consolidated Maastricht gross debt of the general government increased by EUR 2.666bn or 7.5% in the first quarter to 27.973bn or 78.7% of GDP.

Andrej Flajs of the Statistics Office told the press that first quarter deficits are usually higher relative to other quarters and that this can also be expected this year.

While noting that the situation was much easier this year than at the beginning of 2013, Flajs said that the primary deficit remains a key problem in terms of public finances, while he also pointed to the rising costs of interest payments. These rose from EUR 583m annually in 2010 to EUR 917m last year.

"This year we can expect these costs to increase by more than EUR 200m," he added, pointing out that this reduces possibilities for state investments.

What is more, there have been no crisis-related costs this year so far, but this could follow in the second or third quarter, probably because of banks Banka Celje and Abanka Vipa.

Flajs said that fresh borrowing is not planned for this year for know, but it is possible that some of the old debt will be repaid. "If we are lucky the debt will not exceed 80% of GDP at the end of the year."