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IFP increases estimate of Slovakia's 2006 GDP

THE LATEST prognoses of the Finance Ministry's Financial Policy Institute (IFP) show Slovakia's 2006 real GDP growth at 7.9 percent. The November update of the IFP's macroeconomic projections states that the country should have had a GDP of Sk1,640 billion in 2006. The IFP thus increased its previous prognoses from September, when it estimated real GDP growth to be at 6.6 percent on GDP amounting to Sk1,624 billion, the SITA news agency wrote.

The IFP also increased its GDP growth prognosis for 2007, from its original 7.1 percent to the current 7.4 percent. On the other hand, the IFP lowered its previous estimate of GDP growth in 2008 by 0.3 percent to 5.2 percent. The estimate for 2009 remained unchanged, when the real GDP growth should reach 5.1 percent.

The average inflation rate, which is one of the most problematic of the Maastricht criteria, should reach 2.5 percent in the reference year 2007. The IFP predicts even slower consumer price growth for 2008, when average inflation should be 2 percent. Consumer price growth should again accelerate by 0.4 percentage points in 2009.

The IFP also expects positive development on the current account of the balance of payments. Its latest prognosis shows the current account deficit at 7.7 percent of GDP in 2006, which would be an improvement of 0.9 percentage points year-on-year.

An even more significant improvement of an additional 3.9 percentage points should come in 2007. The IFP expects the current account deficit to drop to 2.7 percent of GDP and 2.1 percent of GDP in the next two years.

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