According to a prognosis published by the Slovak Statistics Office on Thursday, March 5, the country’s GDP will grow by only 0.8 percent in the first half of 2009. At the same time, the Statistics Office’s Infostat research unit made an even more pessimistic estimate - expecting GDP to contract by 1.3 percent in this same time period, the TASR newswire wrote.
The Statistics Office projects employment in Slovakia to grow by only 0.4 percent in 1H09, with the unemployment rate reaching 10.04 percent. Infostat expects unemployment to grow by 0.3 percent and reach 10.5 percent. The slowdown in Slovak economy will be accompanied by lower inflation. According to the Statistics Office, inflation should stand at 3.4 percent at the end of June. Infostat expects a figure of 3 percent.
The growth of 0.8 percent in the first half of 2009 will be supported only by domestic demand. A revival of growth in the second half of the year will depend on renewal of demand from foreign trading partners.
“If the economy is in the black during the first half of this year - which we expect it to be - this will be thanks only to domestic, not foreign demand,” said František Bernadič from the Statistics Office at a press conference on March 5. He said that the prevailing opinion is that after one, or possibly two, bad quarters, the situation in the Slovak economy could start improving moderately after June, linked to an expected revival among major foreign trading partners.
Bernadič also pointed to an environment of exceptional insecurity during the global economic crisis, upon which all prognoses are made. “I would choose to be careful with statements such as ‘we expect a recession, we don't expect a recession.’ It’s very early to make predictions at the moment. Let’s wait for the results for the first quarter and based on these figures it should be easier to predict what direction developments will take,” said Bernadič.
The previous estimate for entire 2009, on which the state budget for this year was based, was an increase in GDP of 4.6 percent, the TASR wrote. Revisions were made in February in line with estimates made by the European Commission and Slovak central bank, and the official government estimate now stands at 2.7 percent. TASR
Compiled by Zuzana Vilikovská from press reports
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6. Mar 2009 at 10:00