RECOVERY of the Slovak economy might take longer than previously expected, the European Bank for Reconstruction and Development (EBRD) wrote in their Transition Report 2009.
“The signs of turnaround are still very fragile and it could take the economy longer to return to sustainable growth,” the EBRD stated in the report. While the EBRD expects the Slovak economy to contract by 6 percent this year, a slight revival is expected for next year, the SITA newswire reported.
One of the reasons for this, according to the EBRD, is Slovakia’s strong orientation towards exports which makes it dependent on demand from other countries in the EU. For that reason the EBRD report recommends that the Slovak authorities increase the flexibility and competitiveness of the Slovak economy.
According to the report, they can do this by increasing labour market flexibility, reducing regional differences, reforming the health-care and education systems and encouraging more private sector engagement in transport and community services, SITA wrote.
“The Slovak authorities should build on the economic success achieved until now and sustain a stable business environment for investors,” the EBRD states in the report.
The EBRD also criticised several aspects of the government’s economic policy, primarily the state’s interventions in the second pillar of Slovakia’s pension system.
