Slovenian 2011 public deficit hits 6.4%
(LJUBLJANA) - Slovenia's 2011 public deficit rose to 6.4 percent of output compared to 6.0 percent a year earlier, more than forecast and more than double the European Union limit, preliminary data showed Friday.
"The economic situation and the drop of our GDP (gross domestic product) in the last quarter pushed the public deficit to 6.4 percent," Andrej Flajs from the national statistics office said as he presented the figures.
The increase in the deficit in the eurozone member was higher than planned due to "financial assistance to state companies to help cover their losses" that added 1.3 percentage points, he said.
Janez Sustersic, Slovenia's new finance minister following a change of government in the former Yugoslav republic in February, said the results were a "negative surprise", including for Brussels.
"It seems almost nothing was done in recent years to consolidate public finances," Sustersic said, referring to the previous centre-left government that had committed to cutting the deficit to 5.5 percent by the end of last year.
Slovenia, which has been hit by several credit rating downgrades, fell into a recession in the fourth quarter of 2011 with GDP falling 0.7 percent, after contracting by 0.4 percent in the previous quarter.
Earlier this month the government's analysis and research institute sharply revised its growth forecast for 2012, forecasting a 0.9-percent drop in output. Unemployment currently stands at 12.5 percent.
Prime Minister Janez Jansa's centre-right government is preparing a revised budget, to be sent to parliament in April, containing austerity measures aimed at bringing the public deficit down to the EU threshold of 3.0 percent of GDP.
"Only by doing so we will be able to meet our target (to stabilise public finances) and meet the commitments made to the international community," Sustersic said.
"In the current circumstances, it is crucial to implement measures -- whatever they turn out to be -- as soon as possible," Flajs said.
The statistics office put the eurozone country's total public debt at the end of 2011 at 47.6 percent of GDP or 17 billion euros ($22.7 billion), up from 2010 when it stood at 38.8 percent or 13.7 billion euros.
Flajs predicted it would increase to 51.9 percent of GDP in 2012 "due to the participation of Slovenia in the (EU) stability mechanism," with the country having to contribute to the eurozone's debt defences.
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