A piece of good news: Slovak economy may not fall as steeply as expected

The second pandemic wave poses some risks, though.

Finance Minister Eduard HegerFinance Minister Eduard Heger (Source: TASR)

A rise in demand and the improving situation of Slovakia's key business partners may prevent the Slovak economy from falling as much as originally expected.

The Institute for Financial Policy (IFP), running under the Finance Ministry, has revised its macroeconomic prognosis, forecasting that the economy will drop by 6.7 percent this year. Back in June, it expected it to drop by 9.8 percent.

Related articleWorse than the financial crisis: Economic recession and the very first drop in wages Read more 

“The fall is milder than expected thanks to a better development of domestic and foreign demand,” said Finance Minister Eduard Heger (OĽaNO), as quoted by the SITA newswire.

The GDP should return to its pre-crisis levels no sooner than in late 2021 or early 2022. The ministry expects an increase in economic activity next year, with the economy rising at 5.5 percent.

“Carefulness will prevail, either in private companies, investments or the recruitment of new staff,” Heger added, as quoted by SITA.

If our business partners introduced stricter measures to contain the second pandemic wave, the prediction is much gloomier. The economy this year would fall by 8.4 percent, while the recovery next year would represent only 4.4 percent.

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