BRATISLAVA, June 15, (WEBNOVINY) — Slovakia’s economy should grow this year at a considerably faster rate than the Finance Ministry expected at the start of 2012. In its updated forecast, the Finance Ministry assumes this year’s GDP growth at 2.5 percent, up 1.4 percentage points from its forecast in February. The department justifies the revision by better economic development in the first quarter and also partly by improving external environment.
But according to the Finance Ministry, significantly more tax revenue cannot be expected from this revision. „The structure of economic growth will have little impact on tax revenue, whereas the growth will continue to be primarily driven by foreign trade. Labor market and household consumption should revive only gradually,“ says the forecast.
On the contrary, for next year the ministry predicts slightly lower economic growth compared to February, by 0.1 percentage points to 2.6 percent. This figure already includes the consolidation package of the government of Robert Fico, which should bring the general government deficit next year below the Maastricht criterion of 3 percent of GDP. In 2014, the Finance Ministry expected economic growth to accelerate to 3.9 percent and in 2015 slow down to 3.7 percent.
The Finance Ministry also revised its forecasts of inflation for this year according to national methodology, upward by 0.7 percentage point to 3.5 percent. Next year the department expects price growth of 2.5 percent and in 2014, at 2.1 percent. The ministry has increased its outlook for harmonized inflation for this year by 0.9 percentage points to 3.7 percent and in subsequent years the harmonized index of prices should grow at the same rate as according to national methodology. Nominal wages this year should grow by only 3.2 percent, which would mean that real wages will decrease by 0.3 percent in 2012. Next year, wages should grow in real terms, by 1.4 percent, and in 2014 by 2.3 percent.
SITA
