OECD Economic Surveys: Slovak Republic 2012

Description

OECD's 2012 Economic Survey of the Slovak Republic examines recent economic developments, policies and prospect and takes a special look at improving the fiscal framework and investing efficiently in education and active labour market policies. Table of contents Basic statistics of Slovak Republic, 2011 Executive summary Key policy recommendations Assessment and recommendations The economy has been resilient Figure 1. Key macroeconomic indicators The short-term outlook has weakened Table 1. Short-term projections Figure 2. Capitalisation of the banking sector and credit conditions Medium and long-term economic prospects are uncertain Figure 3. Competitiveness and labour market developments Labour market developments have been unfavourable Figure 4. Labour market outcomes Figure 5. Inequalities Consolidating public finances in a growth-friendly way Figure 6. Fiscal deficit and 10-year government bond rates Table 2. Public finances Improving the fiscal framework Ensuring the sustainability of the pension system Reducing the cost of consolidation Figure 7. General government spending and revenue Table 3. Consolidation measures as planned in November 2012 Table 4. Composition of tax revenues Figure 8. Efficiency of tax collection Box 1. Key recommendations for fiscal policy Reforms to underpin longer-term growth Raise educational outcomes Figure 9. Spending, average achievement and saving opportunities in education Figure 10. Teachers’ remuneration Box 2. Key recommendations for education policy Improve labour market performance Box 3. Recent and future changes in the labour code Table 5. Tax wedges Figure 11. Work incentives Figure 12. Spending on active labour market policies Box 4. Key recommendations for improving labour market performance Bibliography Annex A1. Progress in structural reform Chapter 1. Improving the fiscal framework to enhance growth in an era of fiscal consolidation Returning public finances to a sustainable path Figure 1.1. General government gross debt and deficit Restoring public finances will require a long-term effort Figure 1.2. Medium-term debt profiles and sensitivity to bond yields and potential growth Box 1.1. Is a near-to-structural balance rule optimal for Slovakia? Population ageing increases contingent liabilities Strengthening the medium-term budgetary framework A debt rule is a useful reinforcement of budget discipline Box 1.2. Procedures for containing government debt The new Fiscal Responsibility Board will help monitor fiscal sustainability Box 1.3. Nature and role of the Fiscal Responsibility Board Attaining a sustainable and growth-friendly spending path Strengthening the medium-term expenditure planning processes Figure 1.3. General government spending and revenue Reprioritising government spending to enhance growth and efficiency Table 1.1. Growth-friendly consolidation strategies Increasing spending efficiency Figure 1.4. General government expenditure by economic category Table 1.2. General government labour costs Figure 1.5. Efficiency of tax collection Reducing tax expenditures to remove distortions Reforming entitlement programmes selectively Figure 1.6. General government expenditure by function (COFOG) Figure 1.7. Income inequality and social spending Raising growth-contributing spending Figure 1.8. Government budget appropriations or outlays for R&D Figure 1.9. Public investment Box 1.4. Principles for the public governance of public private partnerships Strengthening the role of public administration for successful spending programme implementation Improving budgeting procedures Enhancing transparency and public oversight Box 1.5. Recommendations for improving the fiscal framework Notes Bibliography Chapter 2. Investing efficiently in education and active labour market policies Labour market performance is weak Long-term unemployment is prevalent Youth unemployment is widespread Figure 2.1. Youth unemployment rates Low-educated and Roma are particularly vulnerable Table 2.1. Employment rates and educational attainment, 2010 Unemployment is concentrated in remote regions Figure 2.2. Regional disparities in unemployment rates Developing active labour market policies Spending on active labour market policies is low Figure 2.3. Spending on and participation in ALMPs by level of unemployment Programmes are insufficiently oriented towards labour market needs Table 2.2. Participants in ALMP, 2010 Figure 2.4. Participation in ALMP by region Comprehensive evaluation is lacking Strengthening public employment services Figure 2.5. Workload of PES Improving the effectiveness of the activation programmes Figure 2.6. Participants in start-up incentives by educational level, age and region Figure 2.7. Participation in direct job creation and training programmes Box 2.1. Recommendations for improving active labour market policies Investing efficiently in education Educational outcomes are below OECD averages Figure 2.8. Educational level, average Pisa score and impact of the socio-economic background Table 2.3. Educational attainment of the Roma population Improving educational outcomes would be highly beneficial Public spending on education is low Figure 2.9. Spending on education and Pisa score Achieving efficiency gains in the primary and secondary education systems Figure 2.10. Average class size and student-teacher ratio in primary and secondary education Increasing resources allocated to teaching activities Figure 2.11. Teachers’ remuneration Concentrating efforts on disadvantaged pupils Box 2.2. Policy initiatives to raise educational outcomes of the Roma population Improving the transition from school to work Table 2.4. Unemployment rate by educational attainment level Figure 2.12. Early school leavers Figure 2.13. Vocational programmes in tertiary education Box 2.3. Introducing an effective apprenticeship system Developing lifelong learning Box 2.4. National measures to develop lifelong learning Box 2.5. Recommendations for education policy Notes Bibliography