Spectator on facebook

Spectator on facebook

OECD expects Slovak economy to slow down

Yet it should remain above 3 percent.

Household consumption should contribute to economic growth this year.(Source: TASR)

After last year’s acceleration, the tempo of Slovakia’s economic growth will slow down in 2016. The Organisation for Economic Cooperation and Development (OECD) predicts in its spring prognoses that the GDP will rise by 3.1 percent this year and 3.2 percent in 2017, down from 3.6 percent in 2015.

The reason for slower growth is the weakening of stimulus provided by extended use of EU money from the previous programming period, the TASR newswire reported.

The rate of GDP growth will, however, remain above 3 percent, mostly thanks to high domestic demand. The increase in household consumption should accelerate thanks to an improving situation in the labour market, while the drop in public investments should be partly compensated by new foreign direct investments in the automotive sector, TASR wrote.

OECD expects private consumption to increase from last year’s 2.4 percent to 3.3 percent in 2016 and 3.2 percent in 2017. The government spending should drop from 3.4 percent last year to this year’s 2.5 percent and further down to 0.8 percent in 2017.

The unemployment rate should continue declining. OECD forecasts it will fall from 11.5 percent in 2015 to 10.4 percent this year and 9.6 percent in 2017.

The inflation should stay negative this year, with OECD predictions counting with a drop in consumer prices by 0.3 percent this year, yet prices are expected to rise in 2017, by 0.9 percent.

The financial consolidation should continue as the new government wants to achieve a surplus budget in 2019. OECD predicts that the public finance deficit will drop from 2015’s 3 percent to 2.3 percent of GDP this year and to 1.6 percent in 2017. The public debt should rise from 52.9 percent of GDP last year to 53.3 percent this year, and then fall back to 53 percent in 2017, TASR reported.

Topic: Economics


Top stories

Scrapping the amnesties to be discussed in fast-track proceeding

The government proposal may be adopted on March 30.

Parliament discusses the laws intended to scrap the Mečiar amnesties.

We were joking before the trip, women from the first transport to Auschwitz recall Video

On March 25, Slovakia marked 75 years since the first transport of Jews to the Nazi concentration camp in Auschwitz.

EU opens e-payment market to IT giants

People should benefit from stronger competition, faster and cheaper payments and higher security.

Illustrative stock photo

Mendoza: A news story can change the world

Every journalist has the responsibility to take a story beyond their daily beat, says Martha Mendoza, one of the team of four women who won the 2016 Pulitzer Prize for Public Service for their “Seafood from Slaves”…

Martha Mendoza