Slovak Republic: Selected Issues

July 8, 2022

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Slovak Republic: Selected Issues, (USA: International Monetary Fund, 2022) accessed November 9, 2024

Summary

This Selected Issues paper on Slovak Republic focuses on supply bottlenecks in 2021. With a shift in global consumer spending toward goods, shortages of inputs and labor and logistical bottlenecks, supply bottlenecks were a prominent feature of the 2021 economic landscape, slowing the pace of the recovery and pushing up inflation. Using an empirical approach to quantify the impact of supply and demand shocks, this selected issue paper finds that supply shocks had a particularly pronounced effect in Slovakia, exerting a sizable drag on industrial production, and contributing significantly to producer price inflation. We find that in 2021H2 in Slovakia, manufacturing output would have been 15 percent higher and 60 percent of the increase in manufacturing producer price inflation would not have occurred in the absence of supply bottlenecks. The greater vulnerability of the Slovak economy to supply bottlenecks is consistent with its sizable auto sector, specialization in downstream activities, and high degree of integration into global value chains. The findings suggest that Slovakia remains highly exposed to supply shocks if the disruptions experienced in 2021 were to persist in 2022 or be amplified by the war in Ukraine.

Subject: Economic sectors, Economic theory, Environment, International organization, Monetary policy, Prices, Taxes

Keywords: D.c, B. emission trend, Carbon tax, Core CPI inflation in Slovakia, Demand and supply supply shock, Europe, Global, Greenhouse gas emissions, Inflation, International Monetary Fund Washington, Manufacturing, PPI inflation, Supply shocks

Publication Details

Pages:

33
Volume:

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DOI:

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Issue:

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Series:

Country Report No. 2022/218
Stock No:

1SVKEA2022002
ISBN:

9798400214639
ISSN:

1934-7685

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