July 31, 2020 / 9:33 AM / 5 days ago

Slovenia plunges into H1 budget deficit due to coronavirus epidemic

LJUBLJANA, July 31 (Reuters) - Slovenia recorded a budget deficit of 1.9 billion euros ($2.25 billion) in the first half of 2020, compared to a surplus of 220 million euros in the same period last year, the finance ministry said on Friday.

The ministry said budget income fell by 15.5%, mainly because of lower tax income amid the coronavirus epidemic, while budget spending was 27.7% higher as the government gave financial help to citizens and companies hit by the epidemic.

“In the coming months we expect an even bigger effect on the fall of the income and the rise of the budget spending due to the hold-up of economic activity and extensive measures taken by the government to solve the economic and health crisis,” the ministry said in a report.

In April, the government said it expected a deficit of 8.1% of gross domestic product this year versus a surplus of 0.5% in 2019.

The government expects the economy to shrink 7.6% this year, due to a fall of exports, investments and household spending, compared with growth of 2.4% in 2019.

Slovenia, which in May became the first European country to declare an end to its coronavirus epidemic, has so far reported 2,156 coronavirus cases and 119 deaths.

$1 = 0.8440 euros Reporting By Marja Novak, editing by Larry King

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