In an interview with the daily SME, the Minister for Finance, Ivan Miklos, announced that public spending would have to be cut in an effort to save EUR 1.66 billion in public finances or approximately 2.5% of finances generated by the economy.
He went on to say that it would also be necessary to increase income into the public treasury. “I do not believe that it (the savings target) can be achieved only by cutting expenses, but that it will be necessary to take measures on the side of state income”, he stated.
The Minister refused to be drawn on exact measures for increasing treasury income but didn’t rule out a rise in VAT levels.
The measures are necessary as a result of a combination of a liberal spending policy by the previous government together with the economic crisis of last year. Income tax revenues for next year are expected to be EUR 1.15 billion (1.5% of GDP) lower than previously forecast. This follows earlier revelations that the deficit for this year was revised up from 5.5% to 6.98% of GDP.