2011 To See First Results Of Fiscal Tightening

The new centre-right government in Slovakia is primed to deliver substantial fiscal consolidation over the coming years, having made this a key campaign pledge in the lead up to recent parliamentary elections. Over the medium term, we believe the administration should be able to bring the budget shortfall beneath the 3.0% ceiling stipulated by the EU's Growth and Stability pact by 2013. However, the discretionary spending splurge pursued by the previous centre-left administration in H110 will likely preclude the new government meeting its 7.0% fiscal deficit target this year and we hold to our forecast for a 7.5% gap in 2010.

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