Slovak Economic Boom, 2009 Euro Entry On Track Says OECD

Slovakia is well positioned to meet the conditions for euro adoption in 2009, says OECD.

Slovakia's economy is on track for further growth and should meet adoption criteria for the euro in early 2009, the Organization for Economic Cooperation and Development said April 6. "Slovakia is well positioned to meet the conditions for euro adoption in 2009," OECD Secretary General Angel Gurria said as he presented the group's report on Slovakia.

Slovakia's "stellar economic performance," with record 8.3% growth last year, should continue at around 7.5% this year and 8% in 2008, before falling back to roughly 5.25%in 2005, the 30-nation OECD said.

Slovakia's high productivity gains in recent years have been based on introduction of new technology and know-how. In the future, the government should improve the education level, which trails the OECD average, the report said.

Brakes on business, such as high administration costs and obstacles, and weak competition in some areas of the economy such as retailing and energy should also be tackled, the report adds.

Privatization should be re-launched in some areas where competition is lacking, such as energy and telecommunications, the report said. The government has put a brake on sales of state assets.

Adoption of the single currency would likely result in a sharp fall in interest rates, sparking an economic boom and triggering "a boom bust cycle," the report warned.

Copyright Agence France-Presse, 2007

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