Our experts analyzed the “Stability Program of the Slovak Republic for 2020 to 2023” (Program stability Slovenskej republiky na roky 2020 až 2023), which is the key medium-term document in the economic sphere of Slovakia. The document was developed by the Ministry of Finance of the Slovak Republic, approved at the meeting of the government of Slovakia on May 18, 2020 and should be supported by the parliament. The program defines the budget, fiscal and monetary policy of the state in the economic crisis, which is developing in the Slovak Republic against the general background of the global economic recession and the pandemic of the COVID-19 virus. The document also takes into account the economic component of the 4-year action program of the government of Prime Minister Igor Matovič, which was published on April 20, 2020.
The new government of Slovakia, headed by Prime Minister Igor Matovič, follows the energy policy of the previous government of Peter Pellegrini, which is aimed at increasing the role of the Slovak Republic as a transit country by increasing the level of interconnection of the Slovak gas transportation system (GTS) with regional gas European markets. Such a policy of Slovakia aims to make the most of its geopolitical position and is characterized by attempts to establish pragmatic relations with all key players at the European gas market, primarily with Russia, which remains the main supplier of natural gas to the countries of Central and Eastern Europe.
The unfavorable global economic situation and the high dependence of the Slovak economy on exports may lead to a deep economic recession in Slovakia, which, according to preliminary estimates of our experts, will last until 2021.
In contrast to the officially published data, our experts estimate that the losses of the Slovak economy in 2020 will amount to 12% of GDP or not less than EUR 11 billion; the unemployment rate may exceed 10% of the working population; the budget deficit will reach 9% of GDP, and external debt will grow by more than 60% of GDP.
According to our experts, the economic component of the 4-year program of government actions put forward by Prime Minister Igor Matovič, which was promulgated on April 20, 2020, is contradictory (in particular, regarding interagency cooperation), does not contain details of measures aimed at implementation of formulated commitments and data regarding the financial support of achieving the declared goals.
At present, the possible deficit of the state budget of the Slovak Republic on the results of 2020 is estimated at 9% of GDP, and the growth of external public debt is possible at the level of up to 60% of GDP. The economic recovery at the level of 2019 is expected in the medium term.
The economic crisis in Slovakia, which is developing against the backdrop of the recession of the world economy, is significantly complicated by restrictive measures on business activity in the country, which the government of Slovakia has been introducing since March 16, 2020 to counter the spread of the COVID-19 virus.
Given that Slovakia was in a crisis period during the regular parliamentary elections held on February 29, 2020, with further formation of the new government on March 18, 2020, implementation of measures to respond to the economic component of the crisis took place only in the second half of April.
In March – April 2020, there were several almost overlapping events that are extremely important for the Russian economy. The fact that they almost coincided slightly blurs their effect and makes it difficult to analyze the causes and probable implications.
Many economic entities have not yet realized what awaits them. Many hope that “pseudo-quarantine” will be lifted and the situation will quickly normalize.
This is not true. A new, and very harsh reality is beginning for the Russian economy. The budget will have to be cut significantly and the national currency will have to be devalued. Citizens expect a significant drop in welfare, and business awaits reduction.
The outcome of the US presidential election in 2020 will determine not only the future energy policy of the United States, but will also have a significant impact on global energy, as well as on international policy in trade, climate protection and interstate relations.
Based on the analysis of the research of the Atlantic Council, an influential think tank, we can identify two plausible scenarios for the development of American energy and climate policy after the presidential election in November 2020. The main conclusion of experts is that a period of uncertainty regarding the future development strategy awaits American investors and owners of energy assets, and any of the election results will lead to significant changes in the domestic energy market and will affect the global competitive position of the United States.
With the economic slowdown, the Slovak government is focusing its efforts on combating the spread of the COVID-19 virus among the population to ensure the resumption of production and business activity in the country since mid-May 2020.
At present, the possible losses of the Slovak economy over the two months of quarantine measures are estimated at 5% of GDP or at least EUR 4 billion.
“The reaction of the oil market and the ruble exchange rate that has already taken place allows us to conclude that Russia’s GDP in 2020 will fall by 1.5-2%, and inflation will rise to 10-15%” – believes Sergey Khestanov, Russian economist, associate professor of ‘The Russian Presidential Academy of National Economy and Public Administration‘, macroeconomic adviser to the general director of the Moscow investment company ‘Otkrytie Broker’.