The Slovenian government has adopted a rebalancing of the budget for 2022, as it has increased revenues by approximately one billion euros to 12.54 billion euros, and expenses by around 600 million euros to a record 14.6 billion euros.
Despite higher spending, the budget deficit is now projected at 3.6% of GDP, down from the original forecast of 4.4%, as revenues remain strong due to high prices and the resulting tax windfall.
Finance Minister Klemen Boštjančič said that the rebalancing is necessary, as the budget in its current form, which was adopted last year, is unsustainable due to additional obligations from stimulus measures for COVID-19, which the previous government did not adequately budget for.
The revision also responds to the unpredictable economic and fiscal circumstances created by the aftermath of the war in Ukraine, and includes additional spending to address the cost-of-living crisis. The ministries of health, finance and labor account for the largest increase in expenditure.
The budget overhaul has drawn criticism from the Fiscal Council, which oversees compliance with the fiscal rule, and recently said that windfalls should be used for debt relief instead of financing spending.
It also stated that reconciliation can be carried out by redistributing budget funds, as it warned that the rebalancing is a continuation of the practice of the last two years, “when budget planning during emergency situations was not transparent and credible”.