The OECD has outlined some key challenges for Slovakia in its ‘Economic Survey of the Slovak Republic 2010’, that it feels the country has to implement in order to get the country’s economy back on a track of growth. These include combating the risk of rising long-term unemployment, getting government finances back on a sustainable path and harvesting the fruits of a transition to greener growth.
The OECD feels that Slovakia was hit harder than most other OECD countries by the global recession, as it saw unemployment rise by 3% to 14% and the budget deficit shot up to almost 8% of the GDP in 2010. The OECD is confident, though, that the new Slovak government’s consolidation measures will have the desired effect, if they focus on cutting public spending and establishing the necessary tax base.
The OECD basically reiterated the plans of the Slovak government by calling for fewer tax exemptions, increasing taxes on real estate and by increasing the VAT rate and its collection success rate. It also noted that the plans to unite tax and payroll levy collection should be pushed through as quickly as possible.