IMF sees Slovak public gap below 5 percent of GDP in 2011

April 12, 2011

, BRATISLAVA, Apr 12 – The International Monetary Fund (IMF) said Tuesday it expected Slovakia\’s public deficit to shrink below 5 percent of output this year on the back of fiscal cuts and strong economic growth.

"We are confident that the government will reach its target to cut the deficit below 5 percent this year," head of the IMF mission to Slovakia, Mark De Broeck, told journalists in Bratislava.

The public finance deficit comprises deficits or surpluses posted by the central government, municipalities and health insurers.

The centre-right government plans to cut the deficit to 4.9 percent of gross domestic product (GDP) this year from 7.8 percent in 2010 and below 3.0 percent by 2013 as required by the European Union.

The eurozone, which Slovakia joined in 2009, stipulates that members should hold their annual public finance deficits at or below 3.0 percent of output.

"The intention to reduce the deficit by around 1 percentage point of GDP each year in 2012-2013 strikes the right balance and will help minimize the adverse impact on growth," De Broeck said.

The IMF said it expected Slovakia\’s economy to grow by 3.75 percent this year on a strong performance in the export sector and a gradual rebound in domestic demand.

Slovakia, whose economy faced its first-ever contraction in 2009 at 4.8 percent, recovered with 4.0-percent growth in 2010.

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