Slovakia’s debt has grown significantly during the pandemic years, but paradoxically we have managed to keep the deficit at a level
When comparing the increase in gross debt, Slovakia is one of the countries with the highest increase, while in net debt, Slovakia is slightly below average.
According to the Council on Budgetary Responsibility, a comparison of deficit growth Slovakia experienced an increase of 1.2% of GDP lower than the EU average.
Slovakia is less indebted
such a difference in debt statistics is according to the budgetary fact that gross debt does not distinguish that the state may have a financial reserve that it has not yet spent. This figure, ie the debt net of the financial reserve, provides the net debt.
According to the council, Slovakia borrowed many liquid resources once during the pandemic, the second largest increase in liquidity in the EU.
Firstly, for the case at the end of 2019, the level of liquidity in the announced effort to report gross debt below the debt brake penalty band, but also as a prevention in the event of major complications in an uncertain pandemic situation.
“However, debt change alone may not be a good benchmark for different indebted countries. With the same economic recovery, nominal GDP growth will automatically reduce debt more to higher indebted countries, Slovakia is less indebted. “ Grand Budget Council.
Lower deficit growth
The initial state of public finances also had an impact on debt. “With the pre-pandemic surplus that some countries had, of course, the debt trajectory was different without a pandemic than when the country entered a deficit crisis.” she said.
Therefore, a more accurate picture of the development of public finances during a pandemic, according to them, provides a comparison of deficit increases. And this increase ranks Slovakia among the countries with earlier growth, ie 9.1% of GDP deficit growth in Slovakia vs. 10.3% of EU GDP.