The National Bank raises a warning finger! A clear message to the government: THESE are the biggest risks for our economy! – Topky.sk

Archive VIDEO Harsh words of Matovič: It is a catastrophic failure of Sulík! Allegedly caused enormous damage NBS pointed out that health outcomes continued to deteriorate during the pandemic. Although there have been improvements in poverty, income inequality as well as income inequality between the sexes, the situation has noticeably worsened for selected vulnerable groups. “The risk of poverty in the case of single pensioners and large families increased when the state’s financial support during the pandemic went elsewhere and weakened for these groups,” the material states. Photo gallery (5) Source: Vertical.com The long-term sustainability of public finances is deteriorating Despite the improvement in the overall assessment of the vulnerability of the economy due to more favorable cyclical development and external competitiveness, according to the National Bank, the high risk is a further deterioration of the long-term sustainability of public finances. The resilience of the financial sector remains high, but rising energy prices and disruptions to supply chains create additional risks for the corporate sector. Another risk for the financial sector is the continued rapid growth of real estate prices and the impact of inflation on the ability of households to repay loans. The NBS pointed out that the dependence on the import of fossil fuels from Russia is also a vulnerability for the Slovak economy. Photo gallery (5) Source: Topky/Maarty Businesses managed the pandemic relatively well The Central Bank added that thanks to government support, the business sector managed the pandemic relatively well, while the pandemic had a more significant impact on less productive, unprofitable and indebted companies. “An increase in the share of hours worked in favor of more productive and larger companies also contributed to the growth of hourly labor productivity. However, low labor productivity remains a key challenge for the Slovak economy,” the material states. Photo gallery (5) Source: Gettyimages.com The government must keep several things in mind with the Recovery Plan Structural reforms and investments from the Recovery and Resilience Plan of the Slovak Republic respond to the biggest challenges of the Slovak economy, but the NBS warns that the government must also bear in mind implementation risks . In the case of investments from the recovery plan in the construction and modernization of hospitals, according to the material, there are serious concerns about the realism of the planned drawdown. Increasing energy efficiency, decarbonisation of industry and investments in renewable sources are gaining importance in connection with the energy crisis. NBS emphasized that in the short term, the government must continue efforts to diversify energy suppliers and consider energy saving measures. Photo gallery (5) Source: Topky/Ján Zemiar At the same time, the national bank warned that measures to compensate for price increases will create further pressure on public finances. Thus, the fiscal policy of the government should take into account significant risks in the field of their sustainability. According to the NBS, compensation measures should be targeted as much as possible in favor of the most affected population groups. “The government should quickly implement the planned measures to increase the sustainability of the pension system. Strict adherence to the newly introduced spending limits could also contribute to the recovery of public finances,” the NBS emphasized in the material. The National Bank raises a warning finger! A clear message to the government: THESE are the biggest risks for our economy!