LJUBLJANA, Jan 9 (Reuters) - Slovenia plans to reduce its public debt to a little more than 70 percent of gross domestic product this year, the Ministry of Finance told Reuters on Tuesday.
The government wants to cut debt to 32.5 billion euros ($38.78 billion), or 71.7 percent of GDP. Last year, debt fell to 75.2 percent of GDP from 78.5 percent in 2016, according to the October finance ministry estimate.
Slovenia’s economy returned to growth in 2014 after avoiding an international bailout of its banks. Its goal is to reduce debt by 2030 to 60 percent of GDP, the ceiling set by the European Union.
The finance ministry also rejected local media reports that the government is considering raising value-added tax to 24 percent from 22 percent to cover demands for higher public-sector wages.
“We are not preparing any such decrees. The finance ministry would not support an increase of VAT to cover trade unions’ demands,” the ministry said in a statement sent to Reuters.
A number of public-sector unions are threatening strikes later in January or in February unless their wages are increased significantly, among them teachers’ trade union SVIZ.
The government, which is preparing for a parliamentary election that is expected in June, is in talks with unions regarding wage hikes but has said wage increases have to remain limited. ($1 = 0.8382 euros) (Reporting By Marja Novak)