Slovenia’s general deficit soars to 16% of GDP in 2nd quarter

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Ljubljana

Slovenia generated a general government deficit of EUR 1.74 billion in the April-June period amid the coronavirus lockdown, which translates into 16.1% of GDP. Since SURS started measuring it under the EU’s methodology, general government deficit was higher only in the last quarter of 2013, when it soared to 3.59 billion, or 38.6% of GDP.

 

This was a result of economic activity practically ceasing during the lockdown and the government’s measures to cushion the epidemic’s impact, the Statistics Office (SURS) said as it released the latest figures on Wednesday.

The general government deficit was driven by a high, 26.2% rise in expenditure and a high, 8.6% drop in total revenue of general government.

Total revenues of the general government amounted to EUR 4.84 billion, which was EUR 457 million less than in the same quarter of 2019.

Tax revenues – down by 11.1% or by EUR 289 million – had the strongest impact on this decrease.

Taxes on production and imports meanwhile decreased the most, by 15% or EUR 244 million.

The positive trend of revenues from social contributions, which started in the second quarter of 2017, stopped this quarter with a slight decrease.

The expenditures amounted to EUR 6.59 billion, which was EUR 1.37 billion or 26.2% more than in the same quarter of last year.

The last time the general government generated such a high rise in expenditure was in the last quarter of 2013, when Slovenia’s banking system was injected with billions of euros.

One-off anti-coronavirus measures – chiefly a number of subsidies to preserve jobs – had the greatest impact on the high increase – that of EUR 839 million.

Compared to the same quarter last year, the social security expenditure increased by 14.9% or EUR 309 million, and compensation of employees by 8%, EUR 112 million.

Expenditure on gross fixed capital formation increased by 27.9%, or EUR 124 million.

Because of the continuous favourable trend of interest rates on financial markets, interest expenditures dropped by 5.1%.

Consolidated general government gross debt in the second quarter meanwhile reached EUR 36.8 billion, or 78.2% of GDP, up by 3.42 billion, or 10.2% over the first quarter.

General government debt at the central level was estimated at EUR 36.17 billion, or 76.9% of GDP and at the local level at EUR 849 million, or 1.8% of GDP.

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