Slovakia's debt in the second half of last year again probably fell below the Maastricht-set level of 60 percent of gross domestic product (GDP). Based on monthly data published by the Debt and Liquidity Management Agency, which administers some 90 percent of Slovakia's public debt, VUB economist Michal Lehuta estimates that the debt dropped to 59.8 percent of GDP at the end of last year. ARDAL's own estimate is a decrease to 59.4 percent of GDP. Slovakia's public debt might remain below the 60-percent threshold also for the whole of this year and be slightly lower at the end than at the end of December 2022. "Despite the high budgeted general government deficit [6.4 percent of GDP], the current huge liquidity reserve of the state [7-10 percent of GDP] might be helpful in that. The debt will significantly drop in February as a result of maturing bonds worth €3 billion [2.8 percent of GDP]," said Lehuta. He stressed that the reduction of the public debt is good news, as Slovakia has been given a negative outlook from all three major international rating agencies. If Slovakia manages to balance its general government revenues and expenditures within a few years and the GDP in current prices grows by 4-4.5 percent, the debt/GDP ratio might also decrease by more than 2 percentage points (p.p.) annually. The country's debt might thus theoretically return to the pre-pandemic level by 2030, said Lehuta.
Source: TASR
