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The budget revision is being prepared; Boštjančič: It is only a technical rebalancing



Rebalancing is necessary due to the establishment of new ministries

The Ministry of Finance is waiting for the last necessary data for the preparation of the rebalancing of the state budget, and according to Minister Klemno Boštjančič, consumers should not expect additional funds.

The budget for 2023 was adopted by the DZ in November last year, when, with expected revenues of 13.38 billion euros, spending was set at a record amount of 16.69 billion euros. The deficit should therefore be formed at a dizzying 3.31 billion euros, which the government explained in the adoption process mainly by the high budget reserve, from which measures to mitigate the consequences of the energy crisis and the price increase are financed.

Recently, the preparation of the rebalance has been discussed every week at government meetings, Boštjančič answered a journalist’s question a few days ago. At the same time, he emphasized that individual departments should not expect additional funds. “In the government, we have been communicating this every week for the past few weeks, especially in the context that individual departments should not expect that the wallet is now open again“, he said and explained that it is only a technical rebalancing, which is necessary due to the new organization of the government.

Eight months after the beginning of the mandate, the government reorganized at the end of January, when the work areas of several ministries changed, and three new ones joined them. As of January 24, the government consists of 20 ministries.

Economists are still concerned about the possible additional growth of budget spending. Thus, the Fiscal Council has repeatedly reminded that with the expected preparation of the rebalance for this year, the limits of the maximum permitted expenditures should not be increased further. According to the forecasts of the European Commission, Slovenia’s public finance deficit is expected to be among the highest in the EU this year, and mark-ups for Slovenian government bonds have been higher than those for comparable countries in recent months, he wrote in the February overview of public finance and macroeconomic trends.

Expectations of growth in public spending are primarily fueled by the increase in the minimum wage starting this January and the growing number of demands for wage increases in the public sector. The wages of some groups of employees were increased before the end of last year, which, according to the government’s assurances, is fully included in this year’s budget, but new demands of the trade unions are appearing this year as well.

For now, the Fiscal Council still assesses that the effects of the current agreements regarding salaries in the public sector are still within the scope of the adopted budget documents, but as it warns, there is no more room for maneuver for additional agreements. Meanwhile, the government decided in February to reform the public sector salary system with a new salary scale with 67 salary grades, whereby no one would have a salary lower than the minimum wage.

The Ministry of Finance will also take into account the latest economic forecasts when preparing the rebalance. These are slightly better than last fall, namely the Office for Macroeconomic Analysis and Development (Umar) improved the outlook for this year in the recently published spring forecast. According to the new plan, the volume of Slovenia’s gross domestic product should increase by 1.8 percent in 2023, after a 1.4 percent growth was expected in the autumn forecast.

The office also expects further moderate investment growth, supported by public and EU funds, as well as weak growth in exports and private consumption, which will grow faster again in the second half of the year. The inflation rate is expected to moderate gradually, and in the first months of this year it will remain relatively high.

Source: Rtvslo

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