INSTANT VIEW 1-Slovak budget gap narrows in Jan-Oct

    Nov 2 (Reuters) - The Slovak central state budget showed a 
deficit of 1.08 billion crowns ($37.96 million) in the 
January-October period, compared with an 5.11 billion deficit 
for the same period of 2005, the finance ministry said on 
Thursday. 
     
CENTRAL STATE BUDGET   Jan-Oct/06    Jan-Oct/05    FY 2006 PLAN 
 (SKK bln) 
 revenues               240.578       214.420         272.717 
 expenditure            241.658       219.535         330.185 
 balance                 -1.080        -5.115         -57.468 
           
- The budget showed a deficit of 5.134 billion crowns for 
January-September. 
- The state budget traditionally shows surpluses or small 
deficits in the first months of the year, before state spending 
rises late in year and budget shortfall widen. 
 
 BACKGROUND: 
- The central budget showed a deficit of 33.886 billion crowns 
for the whole of 2005, much less than the approved ceiling of 
61.524 billion. 
- Slovakia introduced a flat 19 percent tax rate in 2004 as a 
part of an overhaul of its complex tax system. 
- The tax system reform brought higher-than-expected revenues 
last year and the finance ministry projects a further increase 
in tax revenues in 2006. 
- The central state budget data are calculated according to 
local cash-flow methodology as the ministry publishes the key 
public finance statistics according to the European Union's ESA 
95 standards annually. 
- The cash-flow methodology takes in revenues and expenditures 
when money arrive or leave the state accounts, while the accrual 
ESA 95 method includes revenues and expenditures immediately as 
they occur. 
- The central budget is the major part of public finances. The 
overall public finance deficit ceiling was set at 4.2 percent of 
GDP for 2006, including the cost of pension system reform. 
- Slovakia plans to slash the fiscal deficit to 3.0 percent of 
GDP in 2007 to meet the criteria for euro adoption. 
- Slovakia joined the Exchange Rate Mechanism 2 (ERM-2), a form 
of waiting room ahead of euro adoption, in November 2005, with 
the crown's central parity rate set at 38.4550 to the euro. 
     
MARKET REACTION: 
- The market shows no immediate reaction to the data. The crown 
trades at 36.300 per euro as of 0930 GMT, in sight of its 
all-time high of 36.250 hit on last Friday. 
     
     
- For LIVE Slovak economic data releases, click on......<ECONCZ> 
- Schedule of upcoming indicator releases............<SK/ECON09> 
- Summary of short-term economic data forecasts......<SK/ECON04> 
 
- Stories on Slovak currency moves........................[SKK/] 
- Slovak speed money guide ..............................<CZK/1> 
- Slovak benchmark state bond prices .................<0#SKBMK=> 
- Slovak forward money market rates ....................<SKKFRA> 
 
  ((Reporting by Martin Santa, Editing by Alan Crosby; RM: 
martin.santa.reuters.com@reuters.net; 
Email: martin.santa@reuters.com; +421-2-5341-8402)) 
 ($1=28.45 Slovak Crown) 
  Keywords: ECONOMY SLOVAKIA BUDGET