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Slovakia is quickly rebounding from a deep recession, but faces difficult fiscal and labor market challenges in the wake of the crisis. The underlying fiscal position has weakened considerably, and a large fiscal consolidation is essential to reduce the deficit to below 3 percent of GDP by 2013. A fiscal adjustment package of around 2,5 percent of GDP for 2011, combined with an expenditure growth norm for subsequent years could anchor the fiscal consolidation strategy.
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