Improving public sector efficiency can help to meet two conflicting objectives: ensuring fiscal consolidation and maintaining room for growth-friendly spending. However, the public sector, lags on the application of e-government and e-procurement, insufficiently prioritises spending, and suffers from budget fragmentation, lack of co-ordination between ministries and perceived corruption. The regulatory framework could also be more business friendly and the judicial system more efficient. Boosting public sector efficiency requires broad based reforms. Sequencing will be important for the effectiveness of this comprehensive reform effort, and therefore the government should put an initial emphasis on human resource management and the improvement of administrative capacity.

Regional inequality in Slovakia is among the highest in the OECD and is increasing. The main reason for regional disparity is the combination of low economic growth and job creation in the eastern and central part of the country and insufficient labour mobility to the west, in particular by low-skilled workers. As a result, jobs shortage and lack of technological capacities in the central and eastern regions persist alongside skills shortages in the Bratislava regions. Boosting convergence requires a multi-pronged approach involving innovation, labour market and educational policies. Completing the transport infrastructure network in Slovakia will be both important for removing expansion bottlenecks in the Bratislava region and reducing obstacles for job creation in the central and eastern regions.