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Central bank: Slovak economy faces recession in 2009

For the first time in its history, Slovakia's economy will slide into recession this year, according to a mid-term prediction released by the National Bank of Slovakia (NBS), the country’s central bank, on April 7.

For the first time in its history, Slovakia's economy will slide into recession this year, according to a mid-term prediction released by the National Bank of Slovakia (NBS), the country’s central bank, on April 7.

The NBS forecasts Slovakia’s GDP will fall by 2.4 percent this year, the TASR newswire wrote. The new prognosis marks a significant adjustment from the previous NBS forecast, which had projected GDP growth of 2.1 percent in 2009.

“A significant slowdown is present in nearly all indicators related to GDP and the real economy. There will be a fall in foreign demand, but also a substantial slowdown in domestic demand. The so-called gas crisis that we faced in January also played a part in the slowdown of the economy,” Peter Šefčovič, a member of the NBS bank board, told TASR. In 2008, the Slovak economy grew by 6.4 percent, and by a record 10.4 percent in 2007.

The central bank said it expects the Slovak economy to recover in 2010, for which it is predicting growth of 2 percent, followed by forecast growth of 3.2 percent in 2011.

“We now have to weather half a year or a year,” Šefčovič said, adding that hopes for a turnaround in Slovakia are linked to global demand. “It's illusory to believe that any measures by any government could all of a sudden make Slovakia an island in the midst of a raging sea of economic downturns.” He added that the government's task is therefore to adopt mitigating measures that will moderate the fall of the economy and stabilise the labour force. TASR

Compiled by Zuzana Vilikovská from press reports
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