LJUBLJANA, Aug 29 (Reuters) - Slovenia should use good economic conditions to further reduce its budget deficit, the Bank of Slovenia said on Tuesday, noting the deficit is falling faster than it had expected last year.
The government has halved its deficit plan for 2017 to 0.8 percent of GDP and said the deficit should fall to around 0.2 percent in 2018. Last year the deficit was 1.8 percent of GDP.
“Faster reduction of deficit is the consequence of improved economic conditions which are increasing tax income and reducing social benefit payments,” the bank said in a statement after a regular board meeting.
“The expected further strengthening of economic growth is a good basis for further improvement of public finances. The key will be to keep spending within the planned amount,” it added.
Slovenia, which narrowly avoided an international bailout for its banks in 2013, returned to growth a year later and the government expects the economy to expand by 3.6 percent this year from 2.5 percent in 2016, boosted by exports, investment and private spending.
Reporting By Marja Novak; editing by Susan Thomas