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NBS: Slovak economy to grow by only 2.1 percent in 2009

The National Bank of Slovakia (NBS), Slovakia’s central bank, has revised its forecast of the growth of Slovakia's economy in 2009 from 4.7 percent to 2.1 percent, in a move approved by the NBS bank board on Tuesday, according to NBS spokesperson Jana Kováčová.

The National Bank of Slovakia (NBS), Slovakia’s central bank, has revised its forecast of the growth of Slovakia's economy in 2009 from 4.7 percent to 2.1 percent, in a move approved by the NBS bank board on Tuesday, according to NBS spokesperson Jana Kováčová.

"The lower expected growth of imports of our biggest trading partners, according to the latest prediction of the European Commission (EC), should negatively influence the development of the balance of goods of Slovakia and have a subsequent impact on the balance of services. Due to this, net exports could represent a more significant impetus for slowing down the growth of the economy in comparison with the NBS' previous prediction," reads the communiqué of the NBS.

The lower profitability of companies in connection with the worsening development of foreign demand should, according to NBS, be reflected in the slower growth of incomes, and in the growth of unemployment. This will influence the final consumption of households, which should further slow. Meanwhile, the investment activity of companies should also be negatively influenced by stricter financial management, and by more stringent conditions for providing loans.

"It follows from the aforementioned assumptions that the expected growth of GDP from the originally predicted growth of 4.7 percent [will fall] to some 2.1 percent (interval 1.7-2.5 percent) in 2009. NBS' view will become more specific on the basis of coming results from monthly indicators, and it will be a basis for working out the regular mid-term estimate that will be published sometime next month," added Kováčová. TASR

Compiled by Zuzana Vilikovská from press reports
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