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Finance Ministry slashes GDP growth forecast for 2013 to 1.2%

Following a similar move by the central bank earlier this week, the Slovak Finance Ministry has now revised its economic growth forecasts for this and next year sharply downward. According to the January forecast for the current year, the Financial Policy Institute at the ministry estimates that economic growth this year will be only 1.2 percent.

Following a similar move by the central bank earlier this week, the Slovak Finance Ministry has now revised its economic growth forecasts for this and next year sharply downward. According to the January forecast for the current year, the Financial Policy Institute at the ministry estimates that economic growth this year will be only 1.2 percent.

Compared to its forecast from September the revision marks a fall of 0.9 percentage points, the SITA newswire wrote on Wednesday, January 30. Slower-than-previously-anticipated GDP growth is also expected in the following years. The finance department's prognosis for 2014 was reduced by 0.6 percentage points to 2.9 percent and for 2015 by 0.3 percentage points to 3.3 percent. However, in 2016, the Finance Ministry expects an acceleration in GDP growth to 3.6 percent. Slower economic growth would also mean lower tax revenue. The Finance Ministry is due to publish its tax revenue forecast in February.

"The debt crisis in the eurozone in recent months has been adversely affecting the economies of our trading partners and is increasingly influencing Slovakia,” the Financial Policy Institute commented in its latest forecasts. “During 2013, it will be reflected more strongly than in the previous year, as weak external demand will not be offset by the launch of new production in the automotive industry.” The institute added that household consumption will remain subdued because of wage developments and the level of unemployment.

Source: SITA

Compiled by Zuzana Vilikovská from press reports
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