Slovakia benefits from labour market and private investments

Slovakia will fare better than the European Commission originally expected.

(Source: TASR)

The dropping unemployment rate and increase in private investments will positively influence Slovakia’s economic growth, the European Commission predicts. In its interim winter economic forecast, it improved its original autumn growth prediction for this year by 2 percentage points, to 4 percent.

Next year, the economy is expected to grow at 4.2 percent, up from 4 percent in the autumn forecast.

“The main factors are improving labour market conditions that push wages up, increasing household consumption and growth in private investments,” the EC informed.

Read also:Slovakia’s economic outlook seems bright this year Read more 

Investments has risen already for next year. This year, growth will be positively impacted by the automotive industry and big infrastructure projects, as well as strong foreign demand, EC predicts.

As for risks in the mid-term horizon, the EC pointed to weak use of European Union funds, whch are one of the main investment drivers in Slovakia.

The EC predicts inflation will continue increasing, by 2.2 percent this year (up by 0.5 percentage points compared with autumn 2017) and by 2 percent in 2019.

Inflation predictions are impacted by the positive labour market development. The jobless rate continues decreasing, while the rise in household incomes will impact the growth in prices, the SITA newswire reported.

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