Kažimír: GDP forecast cut mainly due to fall in household consumption

The Finance Ministry cut its forecast for Slovakia's economic growth in 2013 to 0.5 percent of GDP earlier this week because it took into consideration data pertinent to the Slovak economy in the first quarter of this year, Finance Minister Peter Kažimír said on June 12, as reported by the TASR newswire.

The Finance Ministry cut its forecast for Slovakia's economic growth in 2013 to 0.5 percent of GDP earlier this week because it took into consideration data pertinent to the Slovak economy in the first quarter of this year, Finance Minister Peter Kažimír said on June 12, as reported by the TASR newswire.

"They [the data] confirm that we're continuing to grapple with so-called private consumption,” Kažimír explained. “Much of this is down to people's behaviour. Nominal salaries are on the rise, with even real salaries growing this year, because inflation is lower than we expected. Nonetheless, given the developments on the labour market people are prone to saving and spending only a little money. The drop in household consumption translates into a fall in all elements of GDP that are derived from household consumption."

The downgrading of GDP growth forecasts is also due to worse-than-expected results in the German economy, the minister said. "Everybody in this country knows how dependent we are on the developments in and condition of the German economy," he added.

Source: TASR

Compiled by Zuzana Vilikovská from press reports
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