Slovenia's general government deficit stood at 5.5% of GDP at the end of the third quarter, up a percentage point year-on-year, but it is projected to surge by about ten percentage points as a result of the recent bank bailout, suggest figures released Monday by the Statistics Office.
The EUR 3.2bn bailout will bring the whole-year bank recapitalisation costs to EUR 3.6bn. "We're talking about a deficit of about 10.3% of GDP attributable to bank recapitalisation," said Andrej Flajs, the head of national accounts.
Slovenia's gross debt is projected to increase accordingly. It is to surge by at least ten percentage points from 62.6% of GDP at the end of the third quarter, according to Flajs.
Despite the end-year surge, Flajs said it was important that the bulk of the bank recapitalisation outlay will be on the budget balances this year, which will reduce the burden next year.
Aside from the bailout costs, the biggest problem, according to Flajs, is the widening deficit of the public pension insurance, which surged by more this year than in the previous four years combined due to "robust austerity" and declining pension contributions.
The pension deficit had widened to 6% of GDP in 2012 from 4% in 2008, but in the first three quarters of this year it reached 7.1% of GDP.
Source: SloveniaTimes
