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Bratislava, July 24, 2020 - The rating agency Standard & Poor's (S&P) confirms the Slovak rating at the same level of "A +", but at the same time changed the stable outlook to a negative one. According to the Ministry of Finance of the Slovak Republic, the evaluation of the agency realistically reflects the economic situation in which Slovakia finds itself in connection with the coronavirus pandemic.
The decline in economic performance is indisputable, which is also related to the deterioration of fiscal parameters. Problems, according to the agency, also qualify us for a slightly narrow economic focus on the automotive industry. Specifically, the Slovak economy recorded one of the largest declines in the European Union in the first quarter.
The current crisis caused by COVID-19 in particular led to the deterioration of the outlook from stable to negative. The Agency estimates that longer-term government will exceed 60% of GDP in 2020 and the general government deficit will increase to 8.5% of GDP in 2020.
"He sees the deterioration in the outlook as a major turnout to put public finances in order by a credible plan by the end of the parliamentary term. It is not only a task for the government, but also for the municipality and cities and all other subjects of public administration. The S&P rating ultimately encourages us to create a vibrant social atmosphere for reform and the recovery of public finances, in which we need help from citizens. Therefore, it is not for nothing that I say that sound public finances are a matter of national honor, "said Deputy Prime Minister and Minister of Finance Eduard Heger.
The agency calculates that in 2020 Slovakia's GDP will decrease by 9.5%, while originally estimating growth of 2.3%. In 2021, economic growth should resume at 5%, which is according to the forecast of the Ministry of Finance, according to which growth should reach 7.6%. However, the pace of recovery will depend mainly on the demand of key trading partners and the rest of the automotive industry.
In its report, the agency effectively assesses Slovakia's low foreign debt, which means a significant imprisonment in the fact that we are left with an A + level assessment. It also appreciates the government's efforts to pay against corruption, the plan to introduce spending ceilings, and the abolition of the bank levy.
"I appreciate that Standard & Poor's will take note of our fight against corruption and make it an important part of our economic policy. Corruption robs citizens and is responsible for the inefficient allocation of resources, which means that the economy does not use the opportunities it has, "added Eduard Heger.
More information: https://www.standardandpoors.com/en_US/web/guest/home
Press department
Ministry of Finance of the SR
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