Absence of reforms means Slovakia’s progress in catching up with the EU average has stalled
Slovakia is not using the favorable period of economic growth for necessary reforms and deficit reduction, and is lagging behind in key areas for future growth, according to the European Commission's regular report. It has stable yet slow economic growth and low unemployment, but last year 18 EU countries reported better budget performance. High taxes on labor, poor VAT collection, ageing population and speedy growth in retail debts are causes for concern. Given the absence of reforms, Slovakia’s progress in catching up with the EU average has been stalled since 2012. The model based on low wages and foreign investors no longer works. The EC has therefore called for improving the quality of public administration and education, promoting science, research and innovations, and closing regional disparities.