In response to remarks by the European Commission, the government sector’s structural deficit should stand at about 1.2 percent of the GDP, also 0.1 percentage points under the plan.
“The projected decline of the 2017 government sector deficit is mainly due to postponement of the enforcement of some of the legal acts that make the social model until July 1, scrapping of some of the instruments of the social model (establishment of the ceiling to social insurance fees), higher excise duty on alcohol and other factors with a smaller effect,” the Finance Ministry said in an explanatory note.
Altogether, costs of the social model will amount to 0.5 percent of the GDP (0.6 pct in the initial draft). The structural government sector deficit, excluding costs of the social model, should be lower than the deficit planned for 2016.
The government is scheduled to discuss the improved 2017 project draft on Wednesday.
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