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OECD: Both Slovak economic growth and budget deficits to accelerate

SLOVAKIA’s economic growth is accelerating, with this development being solidly supported by rising domestic demand, OECD has stated in its latest prognosis, the TASR newswire reported on November 25.

SLOVAKIA’s economic growth is accelerating, with this development being solidly supported by rising domestic demand, OECD has stated in its latest prognosis, the TASR newswire reported on November 25.

The domestic demand in Slovakia is expected to be stronger for this year, with OECD estimating that it may also be sustained in 2015 and 2016, mainly thanks to an improvement in employment and growth in salaries. Meanwhile, exports and investments will go up thanks to a recovering international environment.

The pace of GDP growth will accelerate from 1.4 percent seen in 2013 to 2.6 percent in 2014, 2.8 percent in 2015 and 3.4 percent in 2016, reads the prognosis.

Meanwhile, the budgetary deficit should slightly increase from 2.6 percent of GDP in 2013 to 2.9 percent in 2014. It should gain a reverse course as of 2015, however, standing at 2.6 percent of GDP that year and going down to 2.2 percent of GDP in 2016.

The unemployment rate should continue falling from 14.2 percent in 2013 to 13.4 percent in 2014, and then further to 12.8 percent in 2015 and 12.2 percent in 2016.

According to OECD, continuing fiscal consolidation, beyond the efforts that were required to exit the Excessive Deficit Procedure, is necessary to expand fiscal room and reduce public debt. Reforming the public sector, strengthening the fiscal framework and improving tax collection would all help in this regard. Better integrating lagging regions would raise the potential for growth, as would stepping-up activation programmes and strengthening the education system.

Source: TASR

Compiled by Roman Cuprik from press reports
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