Central bank improves growth expectations for 2016

It also includes the outcome of Brexit in the forecast for next year.

NBS central bankNBS central bank (Source: Jana Liptáková)

Slovakia’s economy is expected to grow by 3.5 percent this year but in 2017 the GDP growth should slow to 3.3 percent and accelerate to 4.2 percent in 2018, according to the latest medium-term forecast presented by the National Bank of Slovakia (NBS), country’s central bank.

NBS included the outcome of the British referendum on leaving the EU into the forecast, and this had a slightly negative impact on next year’s forecast, the TASR newswire reported.

“The Slovak economy continues to grow at a rate of more than 3 percent,” NBS Vice-Governor Ján Tóth told the press on September 27, as quoted by TASR. “It’s expected that this growth will continue to create new jobs, although with a slower pace than this year.”

NBS improved its forecast for the economy’s growth in 2016 by 0.2 percentage point. On the other hand, for 2017 it downgraded its estimate by 0.2 percentage point, particularly due to the outcome of the British referendum.

Slovakia should see deflation of 0.5 percent this year. The prices in Slovakia should go up 1.1 percent in 2017, while the following year the inflation should stand at 1.7 percent, TASR wrote.

The situation on the labour market is expected to develop positively, according to the forecast. This year employment growth should accelerate by 0.3 percentage point to 2 percent, in 2017 as well as in 2018 the figure should reach 1 percent.

The unemployment rate should drop to 9.9 percent this year, to 9.3 percent in 2017 and to 8.5 percent in 2018, according to the NBS forecast.

“About 84,000 new jobs should be created between 2016 and 2018, of which 44,000 will be in the trade and service sector,” said Tóth, as quoted by TASR.

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