Deputy Prime Minister and Finance Minister Ivan Miklos introduced on Wednesday the draft state budget for next year to the cabinet. The draft calculates with a budget deficit of SKK 61.5 billion. Mr. Miklos told journalists that this will be the first time that the budget is prepared in other than usual way. This time, the cabinet will be discussing with individual ministries increases of their budgets from a reserve destined for priorities and deficit cuts are not the issue any longer. Currently the difference between ministries‘ requirements and the budget possibilities represents SKK 8 billion. However, originally ministries requested additional budget allocations of SKK 29 billion. The budget discussion should close on September 17, added the minister.

Mr. Miklos finds it as important that nobody has doubted the target of keeping the public finance deficit at 3.9 percent of GDP, which translates into SKK 50.4 billion deficit of public finances.

The minister underscored the importance of a decision on the final amount of direct payment to farmers, as this will, to certain extent, influence drawing on the reserve for priorities. Each increase by 5 percent in direct payments to the agricultural sector would draw additional SKK 768 million from the state pocket.

Deficit of state budget should reach SKK 61.504 billion. Budgetary revenues should total SKK 249.166 billion and expenditures SKK 310.671 billion. Funds from the European Union (EU) should account for SKK 14.235 billion of budgetary revenues. Concerning expenditures, transfers to the EU budget should amount to SKK 9.012 billion and jointly financed projects should consume SKK 11.295 billion.

The Finance Ministry expects that economic growth to moderately accelerate to 4.1 percent next year and the created gross domestic product will amount to SKK 1,293.2 billion in current prices. The average annual inflation rate should reach 8.1 percent while the average jobless rate should be at 15.4 percent.