Surprisingly good economic results of local governments

Last update: 17.08.2023 11:00

Local governments are in good financial shape despite increased energy prices. Their result improved year-on-year by EUR 153.8 million and in the case of higher territorial units by EUR 24 million. This follows from the latest data of the Ministry of Finance of the Slovak Republic on the management of municipalities and higher territorial units for the first half of 2023. That's how many millions more they have left in local treasuries.

Data from the Ministry of Finance of the Slovak Republic show that local governments reported better results than a year ago. Municipal revenues grew by almost 16% year-on-year, and by over 14% in the case of higher territorial units. At the same time, the year-on-year increase in taxes in absolute terms is more than twice as high as the year-on-year increase in energy. Municipal spending on energy increased by EUR 75.4 million, while tax revenues (tax on income of natural persons and tax on income of legal entities) increased by EUR 190.4 million.  In the case of higher territorial units, the situation is similarly favourable. Tax revenue increased by EUR 83.5 million year-on-year and energy expenditure by EUR 11.4 million.

The state helped as well

Increased grants and transfers from the state, as well as the payment of the full amount of the tax on income of legal entities already in April this year, had a positive impact on the municipalities' results. Moreover, the increase in energy prices is significantly compensated by the state by releasing EUR 77 million for regional education. The Ministry of Finance of the Slovak Republic does not currently see an increase in municipalities exceeding the overdue liabilities limits based on the half-yearly statements. Municipal indebtedness for the second quarter is at 17%, far from exceeding the 50% or 60% threshold of actual current revenues, i.e., the red line set by law.

Press Department
Ministry of Finance of the Slovak Republic