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Brussels confirms prognosis for Slovakia

The prognosis predicts slower economic growth than last year.

Finance Minister Peter Kažimír(Source: SITA)

Slovakia’s economy should grow at 3 percent in the coming years, according to the spring prognosis of the European Commission.

After last year’s 3.6-percent growth, GDP will slow down to 3.2 percent this year. In the following year the economy will grow at 3.3 percent, the EC predicts. Compared to the winter prognosis, growth expectations did not change much. The predictions for 2016 did not change, while for next year it declined by 0.1 percentage points, the SITA newswire reported.

Last year’s growth was based mostly on public investments boosted by the need to draw money from EU funds allocated for the 2007-2013 period. Slovakia had an exception and could use the money until the end of 2015.

As for the next period, Slovakia’s economic growth will depend on strong domestic demand. The increase in investments should be supported by big plans in the automotive sector, while also the spending of households should increase in 2016. On the other hand, the public sector’s expenditures should drop compared to 2015.

“I think the numbers published for Slovakia are very positive and they generally correspond with expectations and prognoses of the Finance Ministry,” Finance Minister Peter Kažimír said, as quoted by SITA.

The Finance Ministry predicts the growth for 2017 to amount to 3.6 percent.

The EC does not expect an increase in consumer prices to be restored this year. They should drop by 0.1 percent this year (compared with last year’s 0.3-percent fall). Inflation, however should revive in 2015, when it is predicted to speed up to 1.5 percent. In winter, the EC predicted this year’s inflation rate to increase by 0.3 percent, and its further acceleration to 1.7 percent in 2017, SITA wrote.

As for the labour market, the EC predicts employment will continue increasing, while the number of jobless should drop from 11.5 percent last year to 10.7 percent in 2016 and 9.5 percent the following year.

The EC also predicts that the deficit of public finances will amount to 2.4 percent of GDP this year, though the Finance Ministry predicts it will be 1.93 percent. For 2017, the EC expects it to drop to 1.6 percent of GDP, while the government plans to have it at 1.29 percent, SITA reported.

As for the public debt, Slovakia should reduce it by 0.5 percentage points to 53.4 percent of GDP, while in 2017 it should decrease by 0.7 percentage points to 52.7 percent of GDP. In its previous prognosis, the EC expected a quicker drop in public debt, to 51.9 percent this year and 51.2 percent in 2017, according to SITA.

Topic: Economics


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