EC predicts good Slovak GDP growth but notes 2010 budget deficit looms large

Slovakia is expected to find itself among the top countries in the European Union when it comes to economic growth over the next three years, according to an autumn prognosis released by the European Commission on November 29, the TASR newswire reported. But the EU's executive branch now projects Slovakia's budget deficit in 2010 to reach 8.2 percent of GDP, in contrast to the 6 percent predicted in its spring prognosis.

Slovakia is expected to find itself among the top countries in the European Union when it comes to economic growth over the next three years, according to an autumn prognosis released by the European Commission on November 29, the TASR newswire reported.

But the EU's executive branch now projects Slovakia's budget deficit in 2010 to reach 8.2 percent of GDP, in contrast to the 6 percent predicted in its spring prognosis.

For 2010 Slovakia's economic growth is expected to come on top in the eurozone – 4.1 percent, with Sweden being the only member of the EU expected to fare better at 4.8 percent. In 2011, the Commission expects Slovakia's GDP to grow by 3 percent (the fifth-highest in the EU and second-highest in the eurozone), while it is projected at 3.9 percent in 2012, third in the EU and top in the eurozone.

Growth in 2010 has been boosted by Germany's significant economic recovery as that country is Slovakia's largest trading partner. Conditions for foreign trade are expected to deteriorate slightly in 2011, however.

Although Brussels anticipates that this year's deficit will reach 8.2 percent of GDP, it praised the new government's commitment to reducing it. State debt is expected to stay roughly at the same level, namely 42, 45 and 47 percent of GDP in 2010, 2011 and 2012, respectively, states the EC report.

Unemployment remains a sore point as even Slovakia's lowest rate in 2008, 9.5 percent, was still among the highest in the EU. The jobless rate is expected to climb to 14.5 percent by the end of 2010 but gradual improvement is expected in 2011.

Source: TASR

Compiled by Zuzana Vilikovská from press reports
The Slovak Spectator cannot vouch for the accuracy of the information presented in its Flash News postings.

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