Government approves budgets for 2024 and 2025, with a focus on flood recovery

At today's session, the Government approved the budget package for 2024 and 2025. The priority for the next two years is to finance measures to deal with the consequences of this year's floods.

The Ministry of Finance has taken into account the autumn economic forecast of the Institute of Macroeconomic Analysis and Development of the Republic of Slovenia when preparing the draft amendments to the state budget for 2024 and the draft budget for 2025.

The macroeconomic situation remains uncertain due to the global situation, elevated inflation and the catastrophic floods that affected large parts of Slovenia in August. According to initial damage assessments, billions of euros will be needed to repair the damage caused by the floods and help the population and the economy. This will require significant resources to be redirected within the national budget, as funds will have to be primarily earmarked for flood recovery measures.

The post-flood recovery and relief measures will also be supported by resources from the Recovery and Resilience Facility and the European cohesion policy for the programming period 2021–2027.

The draft state budget amendment for 2024 foresees €14 billion in revenue and €16.2 billion in expenditure. According to the amendment, the projected budget deficit will stand at €2.2 billion or 3.3% of GDP.

For 2025, the draft state budget foresees €14.56 billion in revenue and €15.82 billion in expenditure. The projected budget deficit will therefore amount to €1.26 billion or 1.8% of GDP.

The Government has also set out the text of the draft Act Regulating the Implementation of the Budgets of the Republic of Slovenia for 2024 and 2025. This act provides, among other things, for the annual pension allowance for 2024. Those receiving a pension of up to €650 will receive an annual allowance of €460, while those receiving a pension of €650.01 to €780 will receive an annual allowance of €320. Those with pensions between €780.01 and €920 will receive €260, while those with pensions between €920.01 and €110 will receive €210. Those receiving a pension of more than €1,110 will receive an annual allowance of €150.

The act also foresees that transfers to individuals and households will not be adjusted in 2024, and that the same will apply to the adjustment of total income, allowances and the income tax scale for 2024. Pension indexation in 2024 is set out in such a way that its advance payment will already be made in January 2024.

The Act Regulating the Implementation of the Budgets also sets the amount of the state budget's borrowing for the next two years, which can be up to €4.66 billion in 2024 and €4.35 billion in 2025. A lump sum of €700 is also allocated to municipalities for both years. If an agreement is reached with the municipalities in the National Assembly, the amount of the lump sum will be amended by an amendment.

The Government has also confirmed the final draft of the Annual Financial Statement of the Budget of the Republic of Slovenia for 2022.