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Slovakia’s population has already peaked, and the aging of the population will pose huge challenges in the coming years. Even immigration will not help to change this trend. According to the Slovak National Bank’s forecasts, the aging of Slovakia’s population will accelerate rapidly, which will also be reflected in the demands on public finances. Expenditure related to the aging of the population will increase by billions of euros compared to the current level.
As in other countries, the challenges associated with an aging population are becoming more pronounced in Slovakia. The Slovak National Bank said (National Bureau of Statistics), Increased life expectancy and falling birth rates have resulted in a large number of retirees being replaced by a smaller group entering the labor market, leading to a decrease in the working-age population.
The central bank said this expected demographic shift poses significant economic and social challenges, including a reduction in the labor supply, a possible decline in productivity, and increased labor supply pressures. public finance Due to higher pension, health and social care costs. “Addressing these challenges requires policies to ensure fiscal sustainability and sustain economic growth,” Point out National Bureau of Statistics.
Is Slovakia taking enough measures to prevent the negative effects of demographic development?
The population of Slovakia peaked in 2021. According to the official long-term forecasts of the European Union’s statistical office – Europop 2023, the Slovak population will no longer grow. The reason is that every year the number of deaths exceeds the number of births, a development that cannot be reversed even if it is done cleanly. migrant. It represents the difference between people who come to Slovakia and people who leave Slovakia.
Slovakia’s development has reversed
Aging population It is also a major challenge, primarily because of its impact on the age structure of the population. Defined as the ratio of people in their post-productive age (65 years and older) to those in their productive age (15-64 years), the economic dependency ratio determines how much of the productive population is able to create the value necessary to ensure a decent living for those who already contribute to the company.
Until recently, Slovakia performed relatively well on this indicator, but the situation has changed. Until 2015, the ratio was very favorable, and in 2000 Slovakia had the lowest ratio among the EU27 countries, at 0.16, i.e. 1 elderly person for every 6 people of productive age. “However, over time this ratio has deteriorated and the deterioration is accelerating. It reached 5:1 in 2015, fell to 4:1 in 2020, and is expected to fall to 2:1 by 2050.” The National Bureau of Statistics warned.
Labor market conditions will deteriorate rapidly
As a result, Slovakia is expected to be one of the countries with the fastest growth in economic dependence. Between 2022 and 2070, Slovakia will grow sixth fastest among the EU27 countries, with an expected increase of 28 percentage points. Among the neighbors, only Poland will exceed us with a growth rate of 29 percentage points. On the other side are the remaining V4 countries – the Czech Republic with the second lowest growth and Hungary with the fifth lowest growth. However, economic dependence will rise in all EU27 countries.
Population ageing can also have a very serious impact on national economies. labour marketthat is, they do not contribute significantly to the country’s economic production. As the population ages, a declining share of workers must support a growing share of retirees. The cost of this burden is reflected in the taxes and levies that fund pensions and health care, but it can also appear in the time and money that families spend caring for their parents. “Higher tax burdens may also be associated with lower economic growth,” The central bank warned.
Population aging is one of the most serious factors contributing to the poor long-term sustainability of Slovakia’s public finances. This indicator monitors the need to adjust Slovakia’s public financial management to manage public debt and consists of two main factors: Public finance deficit and the high expected costs associated with an aging population.
According to the European Commission’s latest report on population ageing in 2024, by 2070, spending related to an ageing population will increase by 6.1% of GDP per year compared to today, which places Slovakia third among countries in the EU. “About half of this increase will consist of pension spending (primarily old age and disability), while the other half will consist primarily of health and long-term care spending.” Provided by the National Bureau of Statistics.
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