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Press Release

28.09.17

Budgets for 2018 and 2019 include a planned surplus, more money primarily for infrastructure, science, security and healthcare


The Government today approved the proposed amendments to the state budget for 2018 and the proposed state budget for 2019 with the corresponding documentation. It also adopted an amendment to the framework for state-sector budgets for the period 2018-2020. In accordance with the Constitution and the Fiscal Rule Act, the proposed budgets are aimed at a gradual balancing of revenues and expenditure, and also take account of newly assumed obligations arising from the adoption of the 2018 budget. The largest increases in expenditure are planned in the following areas: transport and transport infrastructure, science and the information society, healthcare, and entrepreneurship and competitiveness.

  

The Government adopted budgetary documents for 2018 and 2019 today, and due to changing circumstances also adopted an amendment to the framework for drafting state-sector budgets. The changes are related to the target balance of the state sector and the state budget in 2018 and to the maximum level of expenditure for the state sector, the state budget and public health funding.

   

In 2018 the maximum level of expenditure for the state sector was increased by EUR 132 million to EUR 19.3 billion, which is the basis for the determination of the target surplus for the state sector for 2018 amounting to 0.4 percent GDP. In line with this, the planned balance of the state budget in terms of cash flow in 2018 indicates a surplus of 0.1 percent GDP, and the same for 2019. The existing framework for 2018 envisaged a 0.2-percent deficit for the state sector and a similar 0.2-percent deficit for the state budget.

   

The increase in the maximum level of expenditure for 2018 is based on changed macroeconomic circumstances, and is also designed to ease pressures on the consumption of integral budget funds due to higher planned outlays from the EU.

   

Owing to the larger transfer from the state budget to the Health Insurance Institute of Slovenia and improved macroeconomic indicators, the spending limit for public health funding was also increased. Consequently the total maximum level of expenditure for the entire state sector also increased, whereby the total amount of expenditure is increasing more quickly, therefore fiscal consolidation was also accelerated.

  

State budget revenues for 2018 are therefore planned in the amount of EUR 9.68 billion, and expenditure at EUR 9.63 billion. Revenues are increased by 4.4 percent over the adopted budget for 2018, and integral expenditure by 0.6 percent. A budget surplus of EUR 50.9 million or 0.1 percent GDP is planned. 

The proposed budget for 2019 includes planned revenues of EUR 9.75 billion, which is 0.8 percent higher than in the proposed budget amendments for 2018. Expenditure in 2019 is planned at EUR 9.70 billion, which is 0.7 percent higher than the planned expenditure in the proposed budget amendments for 2018. A budget surplus of EUR 53.8 million or 0.1 percent GDP is planned.

   

In the structure of state budget expenditures, the next three largest areas are planned to receive EUR 3.9 billion in expenditure cumulatively in both years (30.6 percent in 2018 and 30.2 percent in 2019). These areas are:

- education and sports, for which EUR 1.7 billion is earmarked (i.e. EUR 173.9 million more than received in 2016),

- pension security, for which EUR 1.2 billion is earmarked (i.e. EUR 126.1 million less than received in 2016),

- social security, for which EUR one billion is earmarked (i.e. EUR 5.9 million more than received in 2016),

All other areas together are planned to receive EUR 5.4 billion (42.4 percent) in 2018 and EUR 5.3 billion (40.5 percent) in 2019. The highest increases in planned expenditure in 2018 compared with expenditure in 2016 are found in the following areas:

- transport and transport infrastructure by EUR 237.2 million;

- science and information society by EUR 104 million;

- healthcare by EUR 85.5 million;

- entrepreneurship and competitiveness by EUR 80.7 million (with an emphasis on repayable funds).

  

The highest proportion of the state budget (27 percent in 2018 and 29.3 percent in 2019) comprises expenditures intended for servicing the public debt and cash management. In 2018 and 2019 we will continue the successful management of the state budget deficit, which is reflected in the lowering of interest payments. Thus the planned expenditure for interest payments in 2018 is reduced by EUR 100.4 million or 11.4 percent with respect to the adopted budget for 2018. In 2018, interest payments are planned in a total of EUR 855.6 million, and EUR 823.5 million in 2019, i.e. EUR 32.1 million or 3.8 percent less than in 2018.

   

In the draft Implementation of the Republic of Slovenia Budget for 2018 and 2019 Act, the Government regulates the issue of the funding bases for financing municipalities. For the coming year, in line with an agreement made in a discussion between Prime Minister Miro Cerar and representatives of the associations of municipalities which was held this week, the planned funding basis of EUR 551 will be increased to EUR 558 for 2019.

   

The Government has thus taken a further step towards both ensuring the sustainability of public finances and acceding to the wishes of the municipalities. The proposed funding basis for 2018 is also significantly higher than last year, and after several years is once again higher than the average between 2009 and 2016, while the proposal for 2019 is the highest level in history.

  

The Government was also briefed on the audit report on the proposal for the final calculation of the state budget for 2016 and concluded that it would send the completed proposal for the final calculation, the audit report and an explanation of the grounds for not taking into account individual proposals for corrections to the National Assembly for adoption.

  

The Government was also briefed on the annual reports of funds and agencies founded by the state, and the Health Insurance Institute of Slovenia and the Pension and Disability Insurance Institute of Slovenia, both with respect to compulsory insurance. The Government will submit the reports in question to the National Assembly together with the final calculation of the budget for 2016.


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