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Slovenia 2009 budget deficit seen at 3.4 pct of GDP

Published 02/26/2009, 12:10 PM
Updated 02/26/2009, 12:16 PM

LJUBLJANA, Feb 26 (Reuters) - Slovenia's government expects a 2009 budget deficit of 3.4 percent of gross domestic product (GDP), topping a ceiling of 3 percent allowed for euro zone members, the Finance Ministry said on Thursday.

"The general budget deficit is seen at 3.4 percent of gross domestic product (GDP)," it said in a statement.

Finance Minister France Krizanic said central government spending for 2009 is seen at 9.9 billion euros ($12.61 billion), while revenues are expected at 8.7 billion euros.

This would create a central budget deficit of some 1.1 billion euros or 2.9 percent of GDP.

"Out of the 1.1 billion euros ... 614 million were spent on the measures the government had to take to ease the impact of the global financial and economic crisis," Krizanic told a news conference.

In order to ease the impact of the global crisis, the government has offered subsidies to companies in exchange for avoiding workforce cuts, and has offered state guarantees for bank loans to local companies.

The government expects the economy to avoid recession and grow 0.6 percent this year, down from some 4.1 percent growth in 2008.

Slovenia's deficit has fallen steadily in the past few years to reach some 0.1 percent of GDP in 2008 from 1.5 percent in 2005.

(Reporting by Manca Ulcar in Ljubljana; Edited by Jason Neely)

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