Slovakia’s GDP should grow at a pace of 2.8 percent this year, according to a eurozone forecast for the autumn of 2011 prepared by Ernst & Young even though their original prognosis had been for 3.4-percent growth, the TASR newswire reported.
“However, Slovakia is still expected to remain one of the strongest performers in the eurozone over the medium term, and we expect the economy to grow, on average, 3.6 percent per year between 2012 and 2015,” wrote Ernst & Young in its analysis.
The company explained that the slowdown in GDP growth, only 0.5 percent in the 2Q of 2011, was partially caused by a contraction in consumer spending in the first two quarters of 2011.
“Furthermore, consumer confidence surveys indicate that households are unlikely to start spending more during the rest of the year, with consumption only picking up as real wage growth returns to positive territory in 2012 and 2013,” the report stated.
The unemployment rate in Slovakia at 13.6 percent in 2Q of 2011 was much higher than in most neighbouring countries and the negative effect on consumption was exacerbated by inflation, the reported noted.
The consulting company added that as inflation declines in the second half of 2011 and into 2012 on the back of a decline in commodity prices, real wages will start to grow again. They also predicted that consumer spending would then increase by 1.3 percent in 2012.
Compiled by Radka Minarechová from press reports
The Slovak Spectator cannot vouch for the accuracy of the information presented in its Flash News postings.
10. Oct 2011 at 14:00