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OECD: Slovak Fiscal Consolidation Plans Reliable, But Reforms Needed

Bratislava, May 11 (TASR) - Slovakia's public finance consolidation plan is trustworthy, according to Organisation for Economic Co-operation and Development (OECD) main economist Pier Carlo Padoan, who met Prime Minister Robert Fico in Bratislava on Tuesday.

However, Padoan stated that the process of fiscal consolidation should be accompanied by reforms designed to boost the country's economic growth.

According to him, Slovakia, along with many other countries hit hard by the global economic recession last year, is now recovering well in European terms, achieving rapid growth. "This is an opportunity to come to terms with the issues surrounding fiscal consolidation, which is problematic in Slovakia, but other countries are struggling much more in this respect. We're confident that this country has a chance to make it out of the crisis in good health," said Padoan.

Finance Minister Jan Pociatek (a Smer-SD nominee) said that the OECD has an optimistic view of the current situation in Slovakia, as the country is expected to have the highest economic growth in the European Union this year, and the stabilisation seen in the unemployment rate is also positive. He stressed that the OECD has described Slovakia's fiscal decentralisation plans as reliable and sufficient.

"There are, of course, some general calls to make it faster, and Slovakia will have to think this through; but generally speaking, our current position is far better than those of other countries," said Pociatek.

Slovakia's public-finance deficit reached 6.8 percent of GDP last year, with plans to cut it to 5.5 percent this year. It is expected that the 3-percent threshold prescribed by Brussels will be met in 2012.

However, several analysts have warned recently that this year's deficit could end up even worse than the one in 2009, at somewhere between 7.0-7.5 percent of GDP.

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