Despite the ongoing consolidation of public finances, the results of the current government are very bland. This is confirmed by the data of the European Statistical Office (Eurostat), according to which the public finance deficit of Slovakia in 2024 increased by one tenth of the percentage point and reached 5.3 percent of the gross domestic product. Although the Ministry of Finance counts on a decline in the deficit to 4.9 percent this year and 4.1 percent in 2026, the target in the form of a deficit below three percent of GDP is to be reached until 2028. Originally planned a year earlier.
According to the finance department, the economic environment is responsible for the shift of the deadline. However, the main problem is the inefficient setting of consolidation measures. After the advent of the government, the Slovaks face an increase in taxes, levies and fees, while the state support of families and contributions to the second pension pillar was also reduced.
However, these measures did not lead to a significant reduction in the deficit. The government has decided to introduce full thirteen pensions and did not prevent the massive departure of people into premature pensions.
Healthcare and the increasing cost of operating public debt also contributed to further increase in expenditure. This year, this year, a populist increase in VAT was added. The adjustment of the basic rate from 20 to 23 percent is due to bring approximately EUR 1.2 billion to the Treasury as early as 2025. However, this income could be up to almost half a billion, not to be two exceptions to reduce prices. Nevertheless, Slovak inflation is still one of the highest in the euro area and the European Union.
The most disputed is a reduction in VAT from 20 to 19 percent for food, energy and drinks in restaurants. The expected drop in prices was almost not at all in practice. For example, a drink that cost one euro last year should cost 99 cents after a reduction. However, Slovakia canceled one cent coins, so the amount is rounded upwards when paying in cash. Therefore, the consumer pays the same price, even if the restaurant actually scored a reduced rate into the price. However, most of the operations only compensate for other increased costs. Only this one measure is to deprive the state budget by EUR 78 million this year and in the future by EUR 83 million.
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