Spending Spree
Pigs, they are…
As you may or may not know, Slovenia recorded an unprecedented 7.2 rise in GDP in first quarter of this year, while the projections hoped for a “meagre” 4.3% growth. Hooray for us!
What troubles me is that the government has decided to increase spending and thus increase the projected budget deficit from 1.0% to 1.2%. It may not seem much, but it is really a 20% increase in budget deficit, which is a lot.
I’m not an economist, but I distinctly remember from my lectures at the University that during periods of economic growth any responsible government will try to balance the budget, because it will inevitably have to resort to deficit spending once the economic boom looses momentum and the economy slumps. Our finance minister and his boss will aparently have none of it and decided to go on a spending spree.
Naturally, noone thought about compensating Ljubljana for the withdrawal of funds (read: daylight robbery) earlier in the year.
As if we were in a pre-election period…
Thursday, June 28th, 2007
