BRATISLAVA, January 23, (WEBNOVINY) – According to the Slovak Chamber of Commerce and Industry (SOPK), the risk of economic recession is particularly high in the first half of 2012. Based on the chamber’s latest prognosis, this threat is connected chiefly with the present economic activity slowdown in the eurozone. Businesses do not expect this year to be better than last year, either, according to a survey conducted in late 2011. Businesses expect their economic results in 2012 to stagnate in comparison with 2011. Based on the survey results among the chamber members, slowdown is to affect above all employment growth, taxed economic results, exports and investment.
The SOPK anticipates industrial production growth to decelerate to approximately 4 percent in yearly terms, which would be a half of the growth pace in 2011. The chamber expects a moderate deceleration in the year-on-year nominal growth of households’ consumer spending to 2-3 percent. As the chamber points out, the growth of households’ spending will largely depend on the growth of regulated prices, which will limit the potential of consumption growth in other segments.
Based on the SOPK prognosis, the main indicators of the labor market will not improve this year, either. With the current risks of economic development in the eurozone, on the global financial market and as a result in Slovakia, employment stagnation in 2012 could be evaluated as positive, SOPK adds. Average unemployment rate will increase to 13.7 percent from last year’s 13.5 percent, the chamber estimates based on its survey. Due to stagnating economy and employment in 2012, the pressure on wage growth will not rise and average nominal wages are expected to increase by the same pace as in 2011. The average growth of nominal wages last year reached 3.1 percent.
Inflation pressures in Slovakia will be more intensive than in the eurozone, the chamber forecasts in connection with further growth of regulated prices as of January 2012. The main risks within the inflation prognosis this year are potential unexpected price changes on global commodity markets, the chamber notes. If the basic scenario of stagnation in Europe and moderate growth of global economy comes true, the SOPK estimates commodity prices to remain at the same or moderately lower levels than in 2011, which would respectively affect the development of production prices.
SITA
