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Finance Ministry cuts 2012 economic growth forecast to 1.1%

The Finance Ministry on Thursday, February 9, reduced its official prognosis for Slovakia's economic growth in 2012 from 1.7 percent to 1.1 percent of GDP. The forecast indicates that the Finance Ministry still doesn't expect the country to fall into recession this year.

The Finance Ministry on Thursday, February 9, reduced its official prognosis for Slovakia's economic growth in 2012 from 1.7 percent to 1.1 percent of GDP. The forecast indicates that the Finance Ministry still doesn't expect the country to fall into recession this year.

The change in the official prognosis takes into account negative developments in the eurozone, and especially what it called insufficient austerity measures in Italy and France. "The reduction in exports and the lack of certainty will affect private investments and salary growth. The relatively more significant acceleration in growth [in Slovakia] will be hampered by fiscal consolidation in Slovakia," said the Finance Ministry, as quoted by the TASR newswire.

According to the Finance Ministry's consolidation plans, the public finance deficit should be reduced to 2.9 percent of GDP in 2013. "Despite this, economic growth next year should reach 2.7 percent, which should lead to stabilisation in unemployment," said the ministry. The ministry projects further reductions in the public deficit of around 0.5 percentage points in each of the following years. The deficit should stand at 2.3 percent in 2014 and at 1.5 percent in 2015. "Fiscal measures will reduce GDP growth by 0.7 percentage points in 2013, by 0.5 percentage points in 2014, and by 0.8 percentage points in 2015," said the Finance Ministry.

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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