BRATISLAVA, June 20, (WEBNOVINY) — The growth rate of Slovakia’s economy is expected to slow down to 3.2 percent this year from 4 percent in 2010, according to the spring prognosis of Ernst & Young. In 2012 and 2013, the Slovak economic growth should accelerate to over 4 percent.
Due to the strongly export-oriented industry, market sentiment is vulnerable to external shocks, such as the crisis in the Middle East or northern Africa, or escalation of the euro zone’s sovereign debt crisis. The growth of main export markets in the first quarter remained stable and consumer spending is expected to gradually grow after the recovery process in Europe culminates in 2011 and 2012. ”We expect the volume of exports to grow in 2011 and 2012 by a little less than ten percent”, the report writes.
Companies active in the industrial sector are ready to hire, as surveys conducted in the first quarter show. Thus, the unemployment rate is projected at 13.8 percent this year and 12.6 percent next year, Ernst & Young writes.
Consumer confidence in March sank to the lowest level since November 2009 and moderately increased in April. Ernst & Young estimates that consumption in 2011 will increase by only 0.7 percent and in 2012 accelerate to approximately 3 percent. Current inflation pressures should evaporate in the next quarters, as it expects a more moderate growth of food and commodity prices. According to the prognosis, inflation measured by the national index should reach an average of 3.6 percent this year and decrease to 2.6 percent next year.
Between January and April, government revenues rose 12.7 percent compared with the same period a year ago, while expenditures dropped 1.1 percent. According to Ernest & Young, the development suggests that the government will not be able to fulfill this year’s general government deficit target. “We project the fiscal deficit in 2011 to decrease to 5.5 percent from nearly eight percent reported in 2010,” the report states. The deficit will not be squeezed to three percent earlier than 2014, Ernst & Young prognosticates. The Slovak government committed to decrease the deficit to 4.9 percent this year and below the 3-percent Maastricht criterion by 2013.
SITA
