Business & investition

OECD: Economic recovery is picking up in the Slovak Republic

Text: TST Photo: OECD

Economic recovery is picking up in the Slovak Republic, but regional disparities and high unemployment must be addressed to ensure balances inclusive growth over the long-term, according to the latest OECD Economic Survey of the Slovak Republic.

The Survey, presented in Bratislava by OECD Secretary-General Angel Gurría and the Slovakian Prime Minister Robert Fico, underlines the country’s accelerating rebound from the financial crisis, which has been among the strongest in Europe.

Slovakia's GDP is projected to grow by 2.6 percent this year, 2.8 percent in 2015 and 3.4 percent in 2016.

The OECD identifies a series of policy reforms that will help the Slovak Republic reform its public sector and to spur growth in the central and eastern regions. Reform and investment in education, where regional disparities of opportunity are prevalent, are key recommendations of both the Survey and the new OECD Review of Evaluation and Assessment in Education: Slovak Republic, also presented by Mr. Gurría to Slovakian officials.

“The Slovak Republic has rebounded further from the global financial crisis than most other European countries, but prosperity has not been shared equally,” Mr Gurría said.

“Better connectivity and comprehensive reforms are needed to attract economic activity to lagging regions while ensuring Bratislava retains its dynamism. Public sector reform and investment in education are two keys that can help unlock inclusive growth.”    
 
While the economy is becoming more balanced towards private consumption, exports will continue to play an important role in the years to come, and growth could be weaker if the euro area recovery is delayed, the OECD said. Low levels of employment and inefficiencies in the public sector could also hold back growth.
 
Boosting training and job search assistance programmes, providing financial incentives for the adoption of new technologies and investment in innovation, and improving national road and rail transport infrastructure as well as international connections will help reduce regional disparities.
 
Making it easier for people to rent a home would also promote mobility, allowing residents of lagging regions to seek employment in the booming west of the country, the Survey said.
 
Improving public sector performance will increase Slovakia's ability to finance and implement growth-friendly measures while moving ahead on necessary fiscal consolidation plans. The OECD recommends Slovakia continue its ongoing programme of ambitious and comprehensive public sector reforms, but suggests more can be done to modernise and increase efficiency across all levels of public administration. This should include actions to establish better human resources management, continue the fight against corruption, improve transparency and the quality of public procurement to ensure the best value for money, and strengthen the budgetary framework, notably by establishing multi-annual expenditures ceilings.
 
The Survey also suggests that public sector reform should include further steps to improve the business environment, by easing regulation in the professional services and retail sectors, improving regulatory impact assessment, strengthening the efficiency and independence of the judiciary and making better use of European Union funds.

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