SLOVAKIA’S economy could grow this year at a considerably stronger pace than the Finance Ministry predicted earlier in 2012.

In its updated forecast, the Finance Ministry announced that this year’s growth in GDP could reach 2.5 percent, up 1.4 percentage points from its forecast in February. The ministry justified its better prognosis by good economic growth recorded in the first quarter and also partly by a slightly improving external environment, the SITA newswire wrote.

But the ministry added that significantly more tax revenue cannot be expected from this higher growth estimate.

“The structure of economic growth will have little impact on tax revenue, because growth will continue to be primarily driven by foreign trade,” the ministry wrote, as quoted by SITA. “Labour market and household consumption should revive only gradually.”

For next year the ministry predicts slightly lower economic growth compared to its estimate in February, less by 0.1 percentage points to 2.6 percent. Its new prediction includes the effects of the consolidation package proposed by Prime Minister Robert Fico that is expected to bring the government’s deficit below the Maastricht criterion of 3 percent of GDP in 2013. In 2014, the Finance Ministry expects economic growth to increase to 3.9 percent and to slow to 3.7 percent in 2015.

The Finance Ministry also revised its forecasts for inflation this year according to its national methodology, up by 0.7 percentage point to 3.5 percent. Next year the ministry expects price growth of 2.5 percent and in 2014 of 2.1 percent. The ministry has raised its prediction for EU-harmonized inflation for this year by 0.9 percentage points to 3.7 percent and in the two following years the harmonized index is expected to increase at the same rate as under the national methodology.

Nominal average salaries this year should grow by 3.2 percent which means that real average salaries will decrease by 0.3 percent. Real average salaries should grow by 1.4 percent in 2013 and by 2.3 percent in 2014, SITA wrote.