The Slovak economy is projected to grow by 2.3% in 2022 and 3.4% in 2023. High inflation as well as uncertainty due to the war in neighbouring Ukraine will weigh on domestic demand well into 2023. The war is also aggravating industrial supply chain shortages and weakening exports. Growth will partly strengthen in 2023 due to strong EU-funded investment and a gradual upturn in exports. Key downside risks include a prolonged war in Ukraine and disruptions in energy supply, which would have strong adverse effects on growth and inflation.
In the framework of the project “Slovak Republic: Evaluation of the Position and Performance of the National Productivity Board (NPB)”, funded by the EU through the Structural Reform Support Programme, the OECD has been supporting the Slovak NPB to align its work and activities with best international practices, in co-operation with the Directorate-General for Structural Reform Support (DG REFORM) of the European Commission. The goal of the project is to strengthen the Slovak NPB’s institutional set-up and analytical capabilities to collect and analyse productivity data, as well as develop policy-oriented recommendations.
This report provides an overview of practical strategies to enhance the capacity of the Slovak NPB to analyse productivity trends and contribute to the development of pro-productivity policies. It draws on international practices and experience of other NPBs and pro-productivity institutions. It provides lessons tailored to the Slovak NPB that can provide guidance and insights for other institutions working on productivity analysis in other EU and OECD countries.
This work is a joint effort of the OECD Economics Department and the Directorate for Science, Technology and Innovation.
After a deep recession in 2020, economic activity has rebounded. However, supply disruptions and a low vaccination rate are making the future pace of the recovery more uncertain. An ambitious recovery plan and substantial inﬂows of EU funds provide a unique opportunity to strengthen the economy, but effective and timely implementation will require continued efforts to improve public procurement and public investment management. In the medium-term, rapid population ageing will exacerbate ﬁscal challenges and weigh on long-term growth. To prepare for an ageing society, pension, health and long-term care, and labour market reforms are needed to extend working lives, improve the health of the ageing population, and enhance the efﬁciency of public spending. At the same time, population ageing reinforces the need to boost productivity. To reinvigorate the economic convergence process and make growth more inclusive and sustainable, policies to promote adequate skills, foster domestic innovation capacity, and better price environmentally harmful activities are needed.
The sectors most affected by the pandemic (i.e. tourism, retail, and construction) traditionally provide seasonal or temporary jobs for vulnerable workers, notably low-skilled, women, youth, and marginalised Roma. The pandemic highlights a need to strengthen skills across the population. This will improve employability of vulnerable groups, boost productivity, make the economy more resilient to future shocks and prepare it to make the most out of digitalisation.
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Since joining the OECD in 2000, the Slovak Republic has continuously ranked among the fastest growing OECD economies, progressively catching up with higher-income countries. Labour market performance and living standards have improved at a high pace, while inequality remained low. In 2019, the typical Slovak worker earned 70% more than 20 years earlier.
Macroeconomic and financial stabilisation, privatisations, changes in business regulations, tax reforms and policies to foster labour market dynamism were all key to promote economic growth and convergence to higher-income countries. Together with its favourable geographical position, this contributed to make the Slovak Republic one the most sought-after investment destinations in Europe.