BRATISLAVA, April 4, (WEBNOVINY) — In its spring economic prognosis, the company Ernst & Young forecasts that Slovakia will be the second fastest growing euro club’s economy but, at the same time, will place at the tail end in terms of price stability, jobless rate and budgetary spending over the next five years.
Based on the prognosis, the average economic growth in Slovakia will be 3.8 percent in 2011-2015. Only Estonia is expected to grow more, 4.8 percent on average. Ernst & Young prognosticates that in 2011 alone, economic activity in Slovakia will slow to 3 percent of GDP. Growth will be driven in particular by foreign demand. A stronger recovery can be anticipated in 2012 (4.5 percent) and in 2013 (4.7 percent). As for the following two years, Ernst & Young forecasts a deceleration to 3.8 percent and 2.9 percent respectively.
Faster economic growth in Slovakia will bring about price hikes, estimated at 2.6 percent on average for the five-year period. This is the third highest prognosticated value in the 17-nation currency bloc following Estonia and Slovenia. Inflation is expected to come down gradually from 3.2 percent in 2011 to 2.3 percent in 2015. However, Ernst & Young does not rule out an even steeper price increase this year.
The unemployment development will not be much better. The country is expected to place fourth with an 11.9-percent average unemployment in five years. Ernst & Young forecasts higher unemployment rate with Ireland, Greece and Spain. The jobless rate in Slovakia should go down slowly from last year’s 14.5 percent to 14.2 percent in 2011, 12.9 percent in 2012 and 10.1 percent in 2015.
Slovakia will reduce the budgetary gap, according to the analysis. The figures for this year are projected at 6.1 percent of GDP and should sink below 3 percent of GDP in 2015. The Slovak government counts on a gradual deficit lowering below the 3-percent Maastricht Criterion already in 2013. “The government has passed a considerable package of austerity measures to lower the high budget deficit. Even if they might slow the economic growth in the coming years, Slovakia clearly remains on the convergence track in the eurozone,” writes the analysis.
SITA
