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Tuesday, June 18, 2024

We will emerge from the crisis significantly less hurt

By: Vida Kocjan

The health crisis related to COVID-19 has also severely affected Slovenian public finances. Revenues to the state budget were more than a tenth lower than in 2019, and expenditures increased by more than a quarter. According to data on public finance trends published by the Ministry of Finance last week, last year there were 9.08 billion euros in revenues and 12.57 billion euros in expenditures from the state budget, and consequently 3.49 billion euros in budget deficits.

The lower revenues are largely a consequence of reduced economic activity due to the epidemic, while higher expenditures were increased due to the adoption of measures to mitigate its consequences. From this point of view, the budget deficit is easy to understand. Last year, the government allocated 2.3 billion euros in aid to the economy alone, thus alleviating unemployment and job losses. In addition, significant funds were allocated to the lower income population.

According to the information known so far, the government has helped to preserve tens of thousands of jobs through its aid measures.

According to the Employment Service, 91,512 people were unemployed on January 21st, which is about 15 percent more than a year ago, when the economic momentum was at its peak. However, economists state that the number of unemployed in December and the first half of January did not deviate significantly from the increases in the same period of previous years. In these periods, it is largely a matter of not renewing fixed-term employment contracts.

At the Office for Macroeconomic Analysis and Development, the reason for the relatively favourable situation is mainly attributed to the maintenance of government intervention measures to help the economy and the population.

The fact is that the fall in employment by about a tenth is recorded in catering and other miscellaneous activities.

However, the government has also taken the necessary measures in these areas. The Ministry of the Economy is already carrying out activities to launch tourism after the epidemic.

The prospects are therefore encouraging, and it appears that we will emerge from the crisis significantly less hurt than if there had been no government intervention.

Vida Kocjan is a journalist of the magazine Demokracija.


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