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IMF expects Slovak economy to grow by 0.6 percent in 2013

Several recent predictions published by the international organisations suggest that growth in the Slovak economy is slowing. After the Organisation for Economic Cooperation and Development (OECD) decreased its prediction from 2 to 0.8 percent last week, now the expectations of the International Monetary Fund (IMF) have been reduced. The economy should grow by only 0.6 percent this year, the SITA newswire reported on June 4.

Several recent predictions published by the international organisations suggest that growth in the Slovak economy is slowing. After the Organisation for Economic Cooperation and Development (OECD) decreased its prediction from 2 to 0.8 percent last week, now the expectations of the International Monetary Fund (IMF) have been reduced. The economy should grow by only 0.6 percent this year, the SITA newswire reported on June 4.

The head of the OECD mission to Slovakia, James John, said that the current prognosis was affected by the worsened external environment. The IMF also decreased its economic prediction for Germany, the biggest business partner of Slovakia. Yet, despite the worsened prognosis the IMF still considers the plan of the government to decrease the state deficit below 3 percent of GDP to be achievable. The consolidation in the following years will need more austerity measures to prevent another rise in the public debt, SITA wrote.

IMF also pointed to several areas in which Slovakia should improve, especially to make the collection of taxes more effective. Slovakia should impose a tax on real estate, as well as improve the effectiveness of public spending, John said. To improve the situation on the labour market the fund recommends improving the system of education and active policy measures on the labour market, SITA reported.

Finance Minister Peter Kažimír accepted the results of the OECD mission, saying that it recognises the problems in the economy of Europe, as well as Slovakia, something which is also reflected in the recommendations of the fund. Kažimír conceded that the June prognosis of his own ministry might also be revised downwards. At the moment the ministry is forecasting economic growth in 2013 of 1.2 percent, SITA wrote.

Source: SITA

Compiled by Radka Minarechová from press reports
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