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

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Agent provocateur and an occasional scribe.

10 thoughts on “Spending Spree”

  1. You’ve answered your own question.. Now you know what the money taken from LJ is for.
    Ihaven’t trusted this government of ours from the beginning, actually I’m not surprised seeing what’s going on..

  2. Some weeks ago we talked about Roosevelt’s “New Deal” and the “Marshall Plan” in our history lessons at evening school. In this context we talked about what happens, when the government spends too much during “good times”: more need for cash, increasing value of the cash, sinking prices. In a Nutshell: deflation. Not quite good for the economy…

  3. Or, as a peasant like me would put it: when the tree is full of plums you make a jam, you don’t let them rot and you don’t eat them all at once.
    Though, percentage figures are never to be trusted, especially the 7.2 one.

  4. I use our rise in GDP to explain to people why I have so much work to do. 😀
    I guess 7.2 will explain many an absence…

  5. @venera: Indeed (as far as plums are concerned). The numbers, on the other hand seem real… They were issued by the Statistical Office which is a surprisingly independent institution 😀

    @alcessa: Hehehe… But you know what they say. If Germany sneezes, Slovenia catches the flu.

  6. Well, Germany has only just crawled out of troubles while Slovenia was doing fine all along (I am talking GDP and also unemployment and stuff). So maybe SLO was the (positive) sneezing force this time 😀 ?

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