Analysts: Slovakia Needs Better Public Revenue and Expenditure Policy

Bratislava, 7 July (TASR) - Slovakia has long had low public investment, despite the growing need for repairs and modernisation, Slovakia's central bank (NBS) chief economist Michal Horvath and NBS public finance analyst Marian Labaj have stated in a blog, adding that the investment debt is growing and affecting Slovaks in their everyday lives. According to them, dealing with the investment debt won't be easy. Better planning and project preparation would help, but financing is the issue. Although the need for investment in upgrades is increasingly urgent, the state isn't able to finance this systematically, they noted. The NBS analysts also stressed that Slovakia isn't saving systematically. "In the region, we're somewhat on the margin, with low or negative savings. Since joining the EU we've had average savings equal to zero. The main problem is that we save only very little in good times. We aren't able to make sustainable investment policies in this current economic setting," stated the central bank economists. According to them, central and eastern European countries can save up to 2-5 percent of their revenues. "This means that for every €100 they collect in taxes, they can set aside €2 to €5 for investments. In Slovakia, these revenues are consumed, even though resources amounting to 1 to 2 percent of GDP would certainly be useful for repairing roads and bridges, for example," they said. However, they added that even a good project plan and thoughtful processes won't resolve the lack of resources needed to improve the current infrastructure. Slovakia needs a well-thought-out public revenue and expenditure policy that will create space for the continued renewal and modernisation of the country, they stressed. lin/df