Slovakia may abandon budget surplus plans before 2020 election

The Slovak coalition government may abandon plans to hit a small budget surplus in 2020 ahead of a general election as it seeks to lift spending and cut corporate tax, the leader of the biggest party in the ruling coalition said on Tuesday. Slovakia aims to balance its budget this year for the first time even as the economy slows, with the central bank on Tuesday cutting its growth forecasts by more than half a percentage point to 3.5 per cent and 3.4 per cent, respectively, for 2019 and 2020.

Leaders of the three coalition parties are reconsidering a previous target to reach a small surplus of 0.1 per cent of gross domestic product (GDP) in 2020. "There's a consensus that we should stick to this year's target," Robert Fico, head of the Smer party and former prime minister, said.

"We will discuss in May whether to go further toward surpluses in 2020, 2021, or whether to stay on the balanced budget level." "Our philosophy has been that when the economy is doing well, we have to share with the people," he added.

The plans include proposals to prolong maternity leave to 52 weeks from current 34 weeks and cut the corporate tax rate to 15 per cent from 21 per cent, Fico said. The government also includes the centre-right Slovak National Party (SNS) and ethnic Hungarian Most-Hid party.

It has come under fire since last year after mass anti-corruption protests triggered by the murder of investigative reporter Jan Kuciak and his fiancee - which led Fico to resign as prime minister. The next general election is slated for spring 2020.