(Updates with details, quotes, background)
By Marcin Grajewski
BRUSSELS, May 5 (Reuters) - Slovakia plans to consolidate public finances so its budget deficit is likely to be smaller this year and next than forecast by the European Commission, Finance Minister Jan Pociatek said on Tuesday.
Pociatek said the forecast by the European Union's executive Commission on Monday of a 2.6 percent economic contraction for Slovakia in 2009 was realistic.
The Commission also forecast that the economy of Slovakia, which joined the euro zone this year, would grow by 0.7 percent next year, but its deficit would increase from 4.7 percent of gross domestic product in 2009 to 5.4 percent in 2010.
"There is a chance that this year the deficit will be smaller than forecast by the Commission. But we will make our own forecast," Pociatek told reporters during a meeting of European Union finance ministers.
"For next year, the Commission mechanistically recalculates this year's forecast assuming no policy changes. But there may be something on which we are working right now, which might change the numbers," he added.
He said Slovakia's debt requirements for 2009 were well covered so this year's eurobond issue was unlikely to exceed the planned 1 billion euros ($1.32 billion).
"We decided to go for the eurobond because the spreads went down. It seems our refinancing for this year will be very cheap overall. I don't think we need more than 1 billion (euros) at this stage, but we will have actual data next week to know that precisely," Pociatek said.
"Our agency that regulates liquidity and borrowing says we have all our debt refinancing under control," he added.
He said the exact timing of the eurobond issue, expected in the second quarter of 2009, was likely to be known next week.
The Slovak government has abandoned its original target of keeping the public finance deficit at 2.1 percent of gross domestic product. It most recently forecast the 2009 fiscal gap at 3 percent of GDP, the limit set under EU budget rules.
The deficit estimate was based on an assumption of 2.4 percent economic growth, which the central bank and analysts called unrealistic.
The central bank has forecast the Slovak economy to shrink 2.4 percent this year as demand for its exports, mainly cars and electronic goods, fades in key western markets. (Editing by Dale Hudson)