BRATISLAVA, July 27, (WEBNOVINY) – Economic convergence toward the EU average resumed in Slovakia last year. The National Bank of Slovakia says in its analysis that the local development is more dynamic than in most EU states and Slovakia’s labor productivity and economic efficiency is getting closer to the EU median. Economic efficiency measured by GPD per capita in the purchasing power parity grew to 74.8 percent of the EU median last year. What is more, the central bank expects its further growth.
“In compliance with our estimates based on the latest macroeconomic prognoses, the ratio of GDP per capita in Slovakia and the EU could exceed 80 percent in the purchasing power parity in 2013,” the research division of the central bank forecasts in its Analysis of Economic Convergence in Slovakia. The central bank expects that the country will preserve one of the highest convergence paces toward the EU median in the fields of labor productivity and the efficiency of its economy.
Slovakia experienced a contrary development in 2009, when the labor productivity stopped growing and the relative efficacy of the local economy dropped to 71.6 percent compared with the EU median. In spite of the turnaround posted last year the situation on the labor market bettered only partially. “The relative price level remains appropriate to the performance of the Slovak economy also from a long-term point of view,“ according to the National Bank of Slovakia.
The central bank expects structural reforms proposed by the incumbent government to boost Slovakia’s competitiveness and long-lasting sustainability of the economic growth. Generally, it can be said that the reform processes in the fiscal as well as the structural area were resumed. The planned changes respond to week points of the local economy and could improve the sustainability of the local GDP growth and Slovakia’s competitiveness on a long-term horizon, the authority reasoned.
Great openness of the local economy and a high portion of cyclical industries bolstered the relatively fast recovery of the Slovak economy. Paradoxically, the two factors were blamed also for the deep contraction in 2009. Slovakia’s GDP came up by 4 percent last year, which pushed the country atop the table of euro club members.
The central bank also writes about the fiscal area in its analysis. The general government deficit profoundly exceeded the projected level last year. Based on the preliminary data released by Eurostat, the general government deficit represented 7.9 percent of the GDP last year, in contrast to the budgeted 5.5 percent. The deficient consolidation rate related to lower tax revenues and higher spending, the National Bank of Slovakia reported. Particularly the worse performance of municipalities negatively influenced the outcome.
SITA
