Bad, worse, or worst. Central bank shows its scenarios for Slovak economy

Slovakia is headed into recession.

Peter Kažimír, Governor of the National Bank of SLovakiaPeter Kažimír, Governor of the National Bank of SLovakia (Source: SITA)

The situation Slovakia and the world are in resembles a guinea pig, said Ľudovíť Ódor, vice-governor of Slovakia's central bank, as he and his fellow analysts presented their outlook for the economy.

The Slovak name for guinea pig literally translates as ‘sea pig’.

“I would call it a guinea pig project. It is neither a sea animal nor a pig,” said Ódor, as he presented the three scenarios of the possible economic development of Slovakia for 2020 by the National Bank of Slovakia (NBS) on March 24.

Instead of its regular quarterly medium-term forecast, the NBS presented three scenarios of possible economic development as the COVID-19 virus pandemic and its impacts on the Slovak economy does not allow for making a detailed prediction using standard methods.

>>> Read everything about coronavirus in Slovakia here.

The scenarios, all based on a two-month lockdown of the Slovak economy and especially its service sector, differ especially in the estimation of the depth of the arriving crisis from the external environment, while the central bank recalls the openness of the Slovak economy and thus its dependence on foreign markets. Slovakia is the fourth-most open economy in the European Union.

Three scenarios

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