Slovak Republic: 2023 Article IV Consultation-Press Release and Staff Report

International Monetary Fund

No 2024/075, IMF Staff Country Reports from International Monetary Fund

Abstract: The 2023 Article IV Consultation with the Slovak Republic discusses that the economy slowed in 2023, as the drawdown of pandemic-era savings ran its course and negative real wage growth weighed on consumption. The Slovak economy continued to grow in 2023, with a large fiscal expansion and the easing of pandemic-era supply chain disruptions offsetting headwinds from soaring food and energy prices. Inflation has declined from comparatively elevated levels in 2022 and early 2023 but remains among the highest in the euro area. Adverse demographic trends pose medium-term challenges for growth and fiscal sustainability. Fiscal consolidation is needed to reverse the structural deterioration in public finances and the upward trend in debt ratio, and build space for future spending pressures. Fiscal consolidation beyond what is envisaged in the budget is needed in 2024 to start the process of rebuilding buffers and contain gross financing needs. Structural reforms are needed to raise inclusive and climate friendly growth, tackle demographic challenges, address regional income inequalities, and accelerate the green transformation.

Keywords: money market rate; Policy recommendation; transparency policy; core inflation; currency of the Slovak Republic; investment authority; liability positions vis-a-vis nonresident; Inflation; Fiscal consolidation; Fiscal stance; Global; Europe (search for similar items in EconPapers)
Pages: 65
Date: 2024-03-13
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