* Tax revenue seen down 16 percent
* Worse economic environment, households spend less
* Fiscal gap seen breaching EU limit
* Debt agency sees no sudden refinancing pressure
(Adds debt agency, analyst comments)
By Peter Laca
BRATISLAVA, July 2 (Reuters) - The Slovak Finance Ministry
expects tax revenue for the 2009 budget to fall by 16 percent
versus its original plan as the economic crisis hurts industries
and curbs household spending, the ministry said on Thursday.
The revenue gap is likely to widen the public finance
deficit and push the country to borrow more than originally
planned, although the state debt agency said it saw no immediate
refinancing pressure.
An updated ministry forecast showed tax income of 8.3
billion euros, down from a plan to collect 9.9 billion.
"The decline in tax revenues... reflects a worse
macroeconomic environment, (and) lower economic growth with
negative impact on growth of employment, wages and household
consumption," the ministry said.
It added overall tax income in broader public finances
should total 10.461 billion euros, which it compared with a
February forecast of 11.428 billion euros income.
Slovakia, a euro zone member since January, has suffered
from weak export demand for its car and electronics goods while
household consumption has crumbled and unemployment rose to a
more than three-year high in May. []
The latest finance ministry forecast sees gross domestic
product (GDP) falling by real 6.2 percent this year, more than
the central bank's prediction of a 4.2 percent contraction.
A Reuters survey showed analysts forecast the overall public
finance deficit to rise to 5.5 percent of GDP this year, from
the 2.2 percent gap seen in 2008.
The government of Prime Minister Robert Fico, in power since
2006 with an agenda to help the poor, sees the 70 billion euro
economy rebounding to 1.1 percent growth next year, which could
help bring some fiscal consolidation.
Analysts in the Reuters poll predicted the total fiscal
deficit at 5.3 percent in 2010, saying a general election next
year was among the factors making a major deficit cut unlikely.
Fico has pledged not to cut the main benefits approved by
his cabinet, including a Christmas bonus for pensioners, despite
shrinking budget income.
MORE DEBT
The state Debt and Liquidity Management Agency said on
Thursday new tax income estimates did not mean a sudden
refinancing pressure, partly thanks to a reserve created with an
international bond issue worth 2 billion euro from May.
"Our strategy during the year is to try and anticipate
developments, and prepare financing in a way that we are not
surprised, so we do not expect pressure to occur," Tomas
Kapusta, head of the agency's debt department, told Reuters.
"There is no immediate need to change anything in our
behaviour by the end of the year." []
However, analysts said bigger deficits would mean extra
servicing costs and could raise the cost of future refinancing.
"Moreover, in coming years the government will have to
refinance short-term debt issued this year, which may be more
expensive than now," Slovenska Sporitelna said in a note.
(Editing by Ruth Pitchford)
