THE SLOVAK Finance Ministry confirmed its June estimate of Slovakia’s economic growth in 2014 at 2.4 percent, while it reduced its estimate for 2015 from 3 percent to 2.6 percent.
Finance Minister Peter Kažimír said when announcing the new macroeconomic prediction on September 18 that the country’s economy gradually started growing from its own internal resources.
“Recovery in the labour market has surpassed our expectations,” said Kažimír, as cited by the SITA newswire.
Real wages had the fastest growth in the past seven years and a revival was also seen in domestic consumption.
In 2016 and 2017, Slovakia’s economy will continue expanding as well, while the pace of GDP growth will accelerate to 3.5 percent and 3.5 percent, respectively.
The Finance Ministry thus leaves this year’s economic growth prognosis unchanged. However, it slashed next year‘s prediction.
“The prognosis for 2015 has certainly been influenced by a worsened outlook in foreign demand and a decrease in government consumption resulting from the need to consolidate and reduce the deficit,” the minister said.
Slovenská Sporiteľňa considers the prognoses for 2014 and 2015 realistic.
“The ministry came close to our estimate of 2.5 percent for 2015,” Mária Valachyová, an analyst with Slovenská Sporiteľňa, wrote in her memo, adding that the important factor is that the labour market reported better development than expected. “The growth of employment may reach 1 percent this year, thanks to which the jobless rate might decrease to 13.5 percent this year.”
Head of the Financial Policy Institute Martin Filko added that one of the substantial factors influencing the new prognosis is the conflict in Ukraine and the adopted sanctions.
Specifically, these influences have a negative impact on this year’s economic growth at 0.2 percentage points and at 0.3 percentage points next year.
