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IMF mission notes solid GDP growth

THE ECONOMY of Slovakia should grow at a solid pace this year in comparison with other eurozone countries, according to the International Monetary Fund (IMF).

THE ECONOMY of Slovakia should grow at a solid pace this year in comparison with other eurozone countries, according to the International Monetary Fund (IMF).

Growth in GDP could reach 2.6 percent this year and might rise to 3 percent next year, said Daria Zakhar, the head of an IMF mission that recently spent two weeks in Slovakia, the SITA newswire reported. Zakhar said the IMF is satisfied with the performance of the Slovak economy and praised the country’s stable banking sector and relatively low debt.

The IMF mission also supported the efforts of the government to reduce the country's budget deficit below 3 percent of GDP in 2013, SITA wrote, adding that the IMF agreed with current cabinet's opinion that available measures on the spending side of the budget have been already partially exhausted.

But the IMF officials did not welcome all measures currently being prepared by Prime Minister Robert Fico’s cabinet, such as the special bank levy, SITA wrote.

Though deficit reduction should be a priority for Slovakia, Zakhar warned that this should not hamper economic growth, adding that if the measure to increase income tax rates for corporations is enacted, its dampening effect will have to be offset by improvements in the business environment.

Zakhar also said it was necessary to fight the country's high jobless rate and bridge regional differences, SITA wrote.

The IMF mission head also said that the planned reduction of contributions to the private second pension pillar will mean higher government costs for future pensions. She insisted that this step should be implemented concurrently with reform of the state-run first pension pillar to secure the future stability of the pension system.

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