BRATISLAVA, February 22, (WEBNOVINY) — Growth of the economy in Slovakia will be considerably weaker this year than originally expected but the economy is likely to avoid recession, forecasts the European Commission in its latest winter forecast for the eurozone. According to it, Slovakia’s GDP growth is set to decelerate to 1.1 percent, down 0.9 percentage points from the last prognosis from November. Brussels however prognosticates a pick-up in GDP growth again to 2.9% in 2014.
“The prognosis comes as no surprise for us, Slovakia will belong according to the European Commission among the countries of the eurozone that will avoid recession. Following Estonia and Malta we will be together with Ireland the third quickest growing economy,” reacted Finance Minister Peter Kazimir.
GDP growth is set to decelerate with the effect of car exports fading out in 2013. Together with sluggish domestic demand it will mean a sharp deceleration of export that is a key driver of the Slovak economy. The forecast also reflects the adverse short-term impact of a sizable consolidation on private consumption and public investment. Moreover, domestic demand is expected to stay subdued amid a sluggish labor market. In addition to fairly robust external demand in 2014, consumer confidence and domestic demand are expected to gradually strengthen over the forecast horizon, underpinning a pick-up in GDP stronger growth. The unemployment rate is set to hover around 14 percent, 0.5 percent over the November forecast horizon. Inflation is set to stabilize at close to 2 percent due to subdued domestic demand pressures and imported inflation and the fading out of base effects from previous price shocks. Employment next year should stagnate and rise 0.5 percent in 2014..
SITA