Slovak Republic: Selected Issues

July 26, 2018

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Slovak Republic: Selected Issues, (USA: International Monetary Fund, 2018) accessed September 19, 2024

Summary

This Selected Issues paper assesses Slovakia’s household and private sector indebtedness against macroeconomic fundamentals, identifies key vulnerabilities from rapid household credit growth, assesses policy responses to date, and presents further policy options. Strong private sector credit growth has persisted for over a decade and resulted in household debt that is high relative to peers. Credit is now growing in riskier segments. Housing prices have also started to reflect pressures from strong credit growth. The paper describes assessments of household and private sector debt levels relative to fundamentals. It also describes the policy response to date and assesses its effectiveness. Econometric analysis suggests that household indebtedness is growing at a faster pace than implied by economic fundamentals. The credit cycle seems to have reached its post-crisis high. The credit cyclogram, compiled by the National Bank of Slovakia, is an aggregation of a set of core and supplementary variables evaluated against distributions of their own historical values to disentangle factors cyclical credit growth.

Subject: Credit, Financial institutions, Housing prices, Labor, Labor shortages, Loans, Money, Prices, Production, Productivity

Keywords: CR, Credit, Credit growth, Eastern Europe, Experiences shortage, Global, Housing prices, ISCR, Labor shortage, Labor shortages, Loans, Policy instrument, Productivity, Property tax, Regulation in the Slovak Republic, Slovakia, Work permit

Publication Details

Pages:

44
Volume:

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DOI:

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Issue:

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Series:

Country Report No. 2018/242
Stock No:

1SVKEA2018002
ISBN:

9781484370940
ISSN:

1934-7685

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