Abstract
This 2015 Article IV Consultation highlights that Slovakia remains among Europe's stronger economies, with growth continuing to pick up in 2015, driven by strong domestic demand. A push to spend expiring European Union funds has underpinned rising investment while job creation and real wage growth have supported private consumption. Unemployment has fallen significantly since 2013, but is still about 11 percent overall, and is much higher for the long-term unemployed, youth, and women. The outlook is favorable with growth of 3-3.5 percent expected through the medium-term, reflecting sustained domestic demand as well as further contributions from the important export sector as substantial additional foreign auto sector investment is planned.
Fund Relations
(As of November 30, 2015)
Membership Status: Joined 1/1/1993; Article VIII
General Resources Account:
| SDR Million | Percent of Quota | ||
|---|---|---|---|
| Quota | 427.50 | 100.00 | |
| Fund holdings of currency | 307.49 | 71.93 | |
| Reserve position | 120.02 | 28.07 | |
| Lending to the Fund | |||
| Borrowing Agreement | 4.90 | ||
| SDR Million | Percent of Quota | ||
|---|---|---|---|
| Quota | 427.50 | 100.00 | |
| Fund holdings of currency | 307.49 | 71.93 | |
| Reserve position | 120.02 | 28.07 | |
| Lending to the Fund | |||
| Borrowing Agreement | 4.90 | ||
SDR Department:
| SDR Million | Percent of Allocation | ||
|---|---|---|---|
| Net cumulative allocation | 340.48 | 100.00 | |
| Holdings | 322.71 | 94.78 | |
| SDR Million | Percent of Allocation | ||
|---|---|---|---|
| Net cumulative allocation | 340.48 | 100.00 | |
| Holdings | 322.71 | 94.78 | |
Outstanding Purchases and Loans: None
Financial Arrangements:
| Type | Date of Arrangement | Expiration Date | Amount Approved (SDR Million) | Amount Drawn (SDR Million) |
|---|---|---|---|---|
| Stand-by | 7/22/1994 | 3/21/1996 | 115.80 | 32.15 |
| Type | Date of Arrangement | Expiration Date | Amount Approved (SDR Million) | Amount Drawn (SDR Million) |
|---|---|---|---|---|
| Stand-by | 7/22/1994 | 3/21/1996 | 115.80 | 32.15 |
Projected Payments to Fund:
(SDR Million; based on existing use of resources and present holdings of SDRs):
| Forthcoming | |||||
|---|---|---|---|---|---|
| 2015 | 2016 | 2017 | 2018 | 2019 | |
| Principal | |||||
| Charges/Interest | 0.00 | 0.01 | 0.01 | 0.01 | 0.01 |
| Total | 0.00 | 0.01 | 0.01 | 0.01 | 0.01 |
| Forthcoming | |||||
|---|---|---|---|---|---|
| 2015 | 2016 | 2017 | 2018 | 2019 | |
| Principal | |||||
| Charges/Interest | 0.00 | 0.01 | 0.01 | 0.01 | 0.01 |
| Total | 0.00 | 0.01 | 0.01 | 0.01 | 0.01 |
Exchange Rate Arrangement:
The currency of the Slovak Republic is the euro, which was adopted on January 1, 2009. The Slovak Republic has accepted the obligations of Article VIII, Sections 2, 3, and 4 and maintains an exchange system that is free of restrictions on the making of payments and transfers for current international transactions. The Slovak Republic maintains exchange restrictions for security reasons, based on UN Security Council Resolutions and Council of the European Union Regulations that have been notified to the Fund under the procedures set forth in Executive Board Decision No. 144-(52/51).
Article IV Consultation:
The consultation discussions were held in Bratislava during October 21–Novmber 3, 2015. The mission met with Minister of Finance Kažimír; National Bank of Slovakia (NBS) Governor Makúch; Minister of Economy Hudák; Minister of Interior Kaliňák; officials from the Ministry of Finance, the NBS, the debt management agency (ARDAL), and the Ministries of Economy, Transportation, and Interior; as well as representatives of financial institutions, labor unions, employers’ associations, and enterprises.
The team comprised Messrs. John (head), Giustiniani, and Jobst, and Ms. Caselli (all EUR), and was assisted at headquarters by Mmes. Calixto and T. Chen. Mr. Jakoby (Senior Advisor to the Executive Director) accompanied the mission. The mission’s concluding statement was published on the IMF website on November 3, 2015.
The previous consultation with the Slovak Republic was concluded on August 27, 2014 (IMF Country Report No. 14/254).
FSAP Participation and ROSCs:
An FSAP was concluded with the completion of the 2002 Article IV consultation on August 7, 2002 on the basis of missions that took place in February 2002 and April 2002. The FSSA report was published (IMF Country Report No. 02/198). An FSAP update mission was held in December 2006. The FSSA update report was circulated to the Executive Board together with the staff report for the 2007 Article IV consultation and published on the IMF website on July 17, 2007.
The report on the Fiscal ROSC was issued in August 2002 (IMF Country Report No. 02/189), and updates were issued in August 2003 (IMF Country Report No. 03/236) and in March 2005 (IMF Country Report No. 05/73). The report on the Data ROSC was issued in May 2005 (IMF Country Report No. 05/161).
Technical Assistance: See the attached table.
Resident Representative Post: None (closed at end-April 2004).
Slovak Republic: Technical Assistance, 2000–15 1/
See Appendix I of IMF Country Report No. 05/71 for technical assistance during 1991–99.
Slovak Republic: Technical Assistance, 2000–15 1/
| Department | Timing | Purpose |
|---|---|---|
| MFD | February 2000 | Mission on pros and cons, and modalities of moving to an inflation targeting framework, operational issues (money markets and policy instruments), and dealing with potential problems posed by capital inflows for monetary operations |
| December 2001 | Long-term resident expert on banking supervision | |
| May 2002 | Two missions on inflation modeling | |
| FAD | April 2000 | Tax administration |
| February 2001 | Tax administration (follow-up) | |
| April 2001 | Public Finance Management (follow-up) | |
| August 2001 | Tax administration: Installation of resident expert to advise on establishment of Large Taxpayer Unit (LTU) | |
| August 2001–August 2002 | Regular visits by FAD consultant on establishment of LTU | |
| December 2001 | Tax administration follow-up, tax investigation/fraud issues | |
| June 2002 | Mission to prepare Report on the Observance of Standards and Codes (ROSC), Fiscal Transparency Module | |
| February 2003 | Tax policy | |
| March 2003 | Tax administration | |
| May 2003 | Expenditure policy | |
| December 2013 | VAT Gap Analysis | |
| November 2015 | Expenditure review workshop | |
| December 2015 | VAT gap follow-up and excise gap analysis | |
| STA | February 2000 | National accounts and price statistics |
| March 2001 | Multi sector mission | |
| July 2003 | Government finance statistics | |
| February–March 2004 | Data ROSC mission |
See Appendix I of IMF Country Report No. 05/71 for technical assistance during 1991–99.
Slovak Republic: Technical Assistance, 2000–15 1/
| Department | Timing | Purpose |
|---|---|---|
| MFD | February 2000 | Mission on pros and cons, and modalities of moving to an inflation targeting framework, operational issues (money markets and policy instruments), and dealing with potential problems posed by capital inflows for monetary operations |
| December 2001 | Long-term resident expert on banking supervision | |
| May 2002 | Two missions on inflation modeling | |
| FAD | April 2000 | Tax administration |
| February 2001 | Tax administration (follow-up) | |
| April 2001 | Public Finance Management (follow-up) | |
| August 2001 | Tax administration: Installation of resident expert to advise on establishment of Large Taxpayer Unit (LTU) | |
| August 2001–August 2002 | Regular visits by FAD consultant on establishment of LTU | |
| December 2001 | Tax administration follow-up, tax investigation/fraud issues | |
| June 2002 | Mission to prepare Report on the Observance of Standards and Codes (ROSC), Fiscal Transparency Module | |
| February 2003 | Tax policy | |
| March 2003 | Tax administration | |
| May 2003 | Expenditure policy | |
| December 2013 | VAT Gap Analysis | |
| November 2015 | Expenditure review workshop | |
| December 2015 | VAT gap follow-up and excise gap analysis | |
| STA | February 2000 | National accounts and price statistics |
| March 2001 | Multi sector mission | |
| July 2003 | Government finance statistics | |
| February–March 2004 | Data ROSC mission |
See Appendix I of IMF Country Report No. 05/71 for technical assistance during 1991–99.
Statistical Issues
1. Coverage, periodicity, and timeliness of data provided to the Fund are adequate for surveillance purposes. From the point of view of macroeconomic analysis and policy making, significant data improvements have been made, particularly in the national accounts. A data ROSC mission during February–March 2004 found that the integrity, methodological soundness, and reliability of the data were satisfactory, despite some shortcomings in the data revision policy. With the adoption of the European System of Accounts (ESA) 2010 in September 2014, past statistical discrepancies between the supply and demand sides of GDP have been resolved. Weaknesses in the data on prices and volumes of imports and exports have also been addressed. Nevertheless, errors and omissions in the balance of payments statistics remain large and reported financial account flows are subject to large volatility. The Slovak Republic has subscribed to the Special Data Dissemination Standard (SDDS) since 1996 and observes or exceeds all related standards.
2. With regard to timeliness and public access, the authorities in general follow a free and open data publication policy. Data are promptly released to news services, and are also published regularly in various monthly and quarterly statistical publications, and on the internet according to a preannounced schedule. Data on core surveillance variables are provided regularly to the Fund, and with minimal lags: a week or less for foreign exchange reserves; a day for monthly state budget implementation data; 10 days to a month for consumer prices, reserve money, broad money, and interest rates; two months for foreign trade data; and about three months for other fiscal, balance of payments, and national accounts data.
Fiscal Sector
3. The compilation of general government statistics is in line with the new ESA 2010 methodology. The Ministry of Finance began compiling its fiscal accounts according to ESA 2010 standards in 2014 and reports general government net lending/borrowing and gross debt on a quarterly basis. Monthly reconciliation of government operations above and below the line is restricted to state budget transactions on a cash basis. A modern treasury system has been operating since January 2004.
External Sector
4. External sector statistics are generally of good quality, and are reported on a timely basis to the Fund. However, errors and omissions in the balance of payments statistics are large and reported financial account flows are subject to large volatility. The statistical authorities are aware of these issues and are working to address them. The statistical authorities started to submit data to the Fund following the standard of the sixth edition of the Balance of Payments and International Investment Position Manual (BPM6) in September 2014 and have provided data back to 2004.
Monetary Sector
5. Monetary statistics are of good quality and are reported on a timely basis to the Fund.
Slovak Republic: Table of Common Indicators Required for Surveillance
(As of December 15, 2015)
Includes reserve assets pledged or otherwise encumbered as well as net derivative positions.
Both market-based and officially-determined, including discount rates, money market rates, rates on treasury bills, notes and bonds.
Foreign, domestic bank, and domestic nonbank financing.
The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state and local governments.
Including currency and maturity composition.
Daily (D), Weekly (W), Monthly (M), Quarterly (Q), Annually (A), Irregular (I), Not Available (NA).
Includes external gross financial asset and liability positions vis-à-vis nonresidents.
Reflects the assessment provided in the data ROSC (published on May 17, 2005, and based on the findings of the mission that took place during February 18-March 3, 2004) for the dataset corresponding to the variable in each row. The assessment indicates whether international standards concerning concepts and definitions, scope, classification/sectorization, and basis for recording are fully observed (O), largely observed (LO), largely not observed (LNO), or not observed (NO).
Same as footnote 7, except referring to international standards concerning source data, statistical techniques, assessment and validation of source data, assessment and validation of intermediate data and statistical outputs, and revision studies.
Slovak Republic: Table of Common Indicators Required for Surveillance
(As of December 15, 2015)
| Date of Latest Observation | Date Received | Frequency of Data 6/ | Frequency of Reporting 6/ | Frequency of Publication 6/ | Memo Items: | ||
|---|---|---|---|---|---|---|---|
| Data Quality—Methodological soundness 8/ | Data Quality—Accuracy and reliability 9/ | ||||||
| Exchange Rates | Current | Current | D | D | D | ||
| International Reserve Assets and Reserve Liabilities of the Monetary Authorities 1/ | October 2015 | November 2015 | D | W | W | … | … |
| Reserve/Base Money | October 2015 | November 2015 | M | M | M | ||
| Reserve/Base Money | October 2015 | November 2015 | M | M | M | … | … |
| Broad Money | October 2015 | November 2015 | M | M | M | … | … |
| Central Bank Balance Sheet | October 2015 | November 2015 | M | M | M | … | … |
| Consolidated Balance Sheet of the Banking System | October 2015 | November 2015 | M | M | M | ||
| Interest Rates 2/ | Current | Current | D | D | D | ||
| Consumer Price Index | October 2015 | November 2015 | M | M | M | ||
| Revenue, Expenditure, Balance and Composition of Financing 3/—General Government 4/ | 2013 | July 2014 | A | A | A | LO, LO, LO, O | O, O, O, O, O, NA |
| Revenue, Expenditure, Balance and Composition of Financing 3/—Central Government | June 2014 | July 2014 | M | M | M | ||
| Stocks of Central Government and Central Government-Guaranteed Debt 5/ | 2014Q1 | May 2014 | Q | Q | Q | ||
| External Current Account Balance | April 2014 | July 2014 | M | M | M | O, O, LO, O | LO, O, LO, O, LO |
| Exports and Imports of Goods and Services | April 2014 | July 2014 | M | M | M | ||
| GDP/GNP | 2015Q2 | November 2015 | Q | Q | Q | O, O, LO, LO | LO, O, LO, O, LO |
| Gross External Debt | 2014Q1 | June 2014 | Q | Q | Q | ||
| International Investment Position 7/ | 2015Q2 | September 2015 | Q | Q | Q | ||
Includes reserve assets pledged or otherwise encumbered as well as net derivative positions.
Both market-based and officially-determined, including discount rates, money market rates, rates on treasury bills, notes and bonds.
Foreign, domestic bank, and domestic nonbank financing.
The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state and local governments.
Including currency and maturity composition.
Daily (D), Weekly (W), Monthly (M), Quarterly (Q), Annually (A), Irregular (I), Not Available (NA).
Includes external gross financial asset and liability positions vis-à-vis nonresidents.
Reflects the assessment provided in the data ROSC (published on May 17, 2005, and based on the findings of the mission that took place during February 18-March 3, 2004) for the dataset corresponding to the variable in each row. The assessment indicates whether international standards concerning concepts and definitions, scope, classification/sectorization, and basis for recording are fully observed (O), largely observed (LO), largely not observed (LNO), or not observed (NO).
Same as footnote 7, except referring to international standards concerning source data, statistical techniques, assessment and validation of source data, assessment and validation of intermediate data and statistical outputs, and revision studies.
Slovak Republic: Table of Common Indicators Required for Surveillance
(As of December 15, 2015)
| Date of Latest Observation | Date Received | Frequency of Data 6/ | Frequency of Reporting 6/ | Frequency of Publication 6/ | Memo Items: | ||
|---|---|---|---|---|---|---|---|
| Data Quality—Methodological soundness 8/ | Data Quality—Accuracy and reliability 9/ | ||||||
| Exchange Rates | Current | Current | D | D | D | ||
| International Reserve Assets and Reserve Liabilities of the Monetary Authorities 1/ | October 2015 | November 2015 | D | W | W | … | … |
| Reserve/Base Money | October 2015 | November 2015 | M | M | M | ||
| Reserve/Base Money | October 2015 | November 2015 | M | M | M | … | … |
| Broad Money | October 2015 | November 2015 | M | M | M | … | … |
| Central Bank Balance Sheet | October 2015 | November 2015 | M | M | M | … | … |
| Consolidated Balance Sheet of the Banking System | October 2015 | November 2015 | M | M | M | ||
| Interest Rates 2/ | Current | Current | D | D | D | ||
| Consumer Price Index | October 2015 | November 2015 | M | M | M | ||
| Revenue, Expenditure, Balance and Composition of Financing 3/—General Government 4/ | 2013 | July 2014 | A | A | A | LO, LO, LO, O | O, O, O, O, O, NA |
| Revenue, Expenditure, Balance and Composition of Financing 3/—Central Government | June 2014 | July 2014 | M | M | M | ||
| Stocks of Central Government and Central Government-Guaranteed Debt 5/ | 2014Q1 | May 2014 | Q | Q | Q | ||
| External Current Account Balance | April 2014 | July 2014 | M | M | M | O, O, LO, O | LO, O, LO, O, LO |
| Exports and Imports of Goods and Services | April 2014 | July 2014 | M | M | M | ||
| GDP/GNP | 2015Q2 | November 2015 | Q | Q | Q | O, O, LO, LO | LO, O, LO, O, LO |
| Gross External Debt | 2014Q1 | June 2014 | Q | Q | Q | ||
| International Investment Position 7/ | 2015Q2 | September 2015 | Q | Q | Q | ||
Includes reserve assets pledged or otherwise encumbered as well as net derivative positions.
Both market-based and officially-determined, including discount rates, money market rates, rates on treasury bills, notes and bonds.
Foreign, domestic bank, and domestic nonbank financing.
The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state and local governments.
Including currency and maturity composition.
Daily (D), Weekly (W), Monthly (M), Quarterly (Q), Annually (A), Irregular (I), Not Available (NA).
Includes external gross financial asset and liability positions vis-à-vis nonresidents.
Reflects the assessment provided in the data ROSC (published on May 17, 2005, and based on the findings of the mission that took place during February 18-March 3, 2004) for the dataset corresponding to the variable in each row. The assessment indicates whether international standards concerning concepts and definitions, scope, classification/sectorization, and basis for recording are fully observed (O), largely observed (LO), largely not observed (LNO), or not observed (NO).
Same as footnote 7, except referring to international standards concerning source data, statistical techniques, assessment and validation of source data, assessment and validation of intermediate data and statistical outputs, and revision studies.