EC improves Slovakia’s 2014 GDP forecast to 2.3%

By bne IntelliNews February 26, 2014

Slovakia’s GDP is expected to expand by 2.3% in 2014 and further speed up to 3.2% in 2015 supported improving domestic demand, the European Commission said in the winter edition of its European Economic Forecast, published on February 25. In its previous forecast, released in November, the commission was expecting a 2.1% growth for 2014 and 2.9% for 2015. According to the EC, Slovakia’s economy grew 0.8% last year as domestic demand was acting as a drag on growth.

The commission said that the private consumption is expected to gradually increase in 2014 and 2015 thanks to lower inflation and improving labour market, which would boost the real incomes. The investments in Slovakia, which remained weak in 2013, are projected to stagnate in 2014.

Exports, which are the main driver of Slovak economy, are expected to rise in 2014 and 2015 helped by declining export prices and improving demand in Slovakia's main trading partners. According to the commission, imports are expected to increase in line with exports and, for 2014 and 2015, net exports are likely to give way to domestic demand as the main driver of growth.

EC noted that downside risks to the forecast could come from possible delays in the implementation of large infrastructure projects.

Inflation is expected to ease to 0.7% in 2014 on declining commodity prices and a planned reduction of regulated energy prices for households. The EC sees the budget gap at 3.3% of GDP this year and expects it to slightly deteriorate in 2015.

Slovakia's key macroeconomic indicators 2013 2014 winter forecast 2015 winter forecast 2014 autumn forecast 2015 autumn forecast
GDP y/y % growth 0.8% 2.3% 3.2% 2.1% 2.9%
Private consumption, y/y % growth -0.1% 1.2% 2.3% 0.9% 1.9%
Public consumption, y/y % growth 1.3% 5.6% 3.4% 4.2% 2.8%
Gross fixed capital formation, y/y % growth -6.7% 0.2% 3.3% 1.2% 3.7%
Exports, y/y % growth 3.5% 4.8% 6.2% 4.6% 6.0%
Imports y/y % growth 2.0% 4.5% 6.0% 4.3% 5.8%
Inflation (HICP), % 1.5% 0.7% 1.6% 1.6% 1.9%
Unemployment, % 14.2% 13.9% 13.4% 13.7% 13.3%
Current account balance, % of GDP 2.0% 1.9% 2.3% 4.3% 5.4%
General govt balance, % of GDP -2.5% -3.3% -3.4% 3.2% 3.8%
General government gross debt, % of GDP 54.3% 57.8% 58.4% 57.2% 58.1%
Source: the European Commission          

Related Articles

Slovakia battling Romania for Chinese electric carmaker Zhi Dou's plant

Slovakia could have another carmaker on its already soil. Chinese Zhi Dou, a producer of electric cars, has narrowed down its choice on where to build a European factory to Slovakia or Romania, the ... more

Slovakia's car industry facing strike at Kia, unrest at Peugeot

Workers at Kia Motors Slovakia have officially been on strike alert since April 10, a day before Skoda Auto in neighbouring Czechia ... more

Finland gives final nod to construction of Nord Stream II

Finland has issued a second and final permit for the construction of the controversial Nord Stream II pipeline that is to pump gas from Russia directly to Germany via a Baltic Sea route, the Regional ... more

Dismiss