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NBS slashes 2013 economic growth forecast again, to 0.7 percent

The National Bank of Slovakia (NBS) has published its February prognosis for economic growth this year, predicting growth of just 0.7 percent in 2013, down from the 1.3 percent it predicted as recently as January. The central bank also cut its 2014 growth forecast from the 3.3 percent predicted in January to 2.8 percent, but said that the pace of growth should pick up in 2015 to hit 3.8 percent. The NBS prognosis came only few days after commercial banks also cut their economic growth predictions, the SITA newswire reported on March 26.

The National Bank of Slovakia (NBS) has published its February prognosis for economic growth this year, predicting growth of just 0.7 percent in 2013, down from the 1.3 percent it predicted as recently as January. The central bank also cut its 2014 growth forecast from the 3.3 percent predicted in January to 2.8 percent, but said that the pace of growth should pick up in 2015 to hit 3.8 percent. The NBS prognosis came only few days after commercial banks also cut their economic growth predictions, the SITA newswire reported on March 26.

“Regarding the negative tendencies mostly from the domestic part of economy, but also from moderately lower foreign demand, the NBS approached, compared to its previous prediction, to another decrease in the tempo of economic growth for this as well as next year,” said NBS governor Jozef Makúch, as quoted by SITA, adding that negative risks prevail in the medium term.

The lower level of economic growth will also affect the situation on the labour market. The NBS predicts that employment will drop by 0.8 percent, 0.1 percentage points less than forecast in January. It believes employment will then rise by 0.2 percent in 2014, and 0.7 percent in 2015.

The unemployment rate will increase by 0.3 percentage points to 14.9 percent in 2013, then fall slightly in 2014 to 14.6 percent, and to 13.8 percent in 2015, the NBS also predicted.

Commercial bank analysts recently forecast growth this year of 0.9 percent, while the Finance Ministry still officially expects the economy to grow by 1.2 percent, SITA reported. The revised NBS prognosis is the latest in a series of downward revisions. Only last summer the central bank was forecasting GDP growth of more than 3 percent in 2013.

Source: SITA

Compiled by Radka Minarechová from press reports
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