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OECD: Crisis will hit Slovak economy

Slovakia’s economy will cool rapidly next year but then recover in 2010 to a solid 5.6% rate of growth, according to a report released in late November by the Organization for Economic Cooperation and Development (OECD).

(Source: SITA)

Slovakia’s economy will cool rapidly next year but then recover in 2010 to a solid 5.6% rate of growth, according to a report released in late November by the Organization for Economic Cooperation and Development (OECD).

According to the OECD analysis, Slovakia's GDP will tumble from 10.4% in 2007 to 7.3% this year and 4% in 2009, before climbing back to 5.6% the following year.

The slowdown is ascribed to the global financial crisis, which is expected to chill foreign trade and investment.

By comparison, the European Commission has predicted that Slovakia's economic growth will reach 4.9% next year, while the Slovak Finance Ministry expects a figure of around 4.6%.

Despite the relatively good news on growth, Slovakia was expected to take a hit due to the crisis on unemployment, which at 9.9% as measured by Eurostat is the second highest in the EU.

As of the end of November, some 4,000 workers had been laid off in Slovakia as a direct result of the financial crisis, including over 200 employees at Danfoss Compressors in Zlaté Moravce, 200 at bearings maker Kinex Bytča and 250 at machinery firm INA Kysucké Nové Mesto. All of these firms cited a drop in orders as the reason for the dismissals.

However, according to a monitoring group at the Economy Ministry that is tracking the impact of the crisis on business, none of the country’s major investors, such as Samsung, Sony Nitra, Kia, Peugeot, Getrag Ford, and Volkswagen, are planning layoffs.

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