The European Commission expects Slovakia’s GDP to expand by 0.9% in 2013 and the growth to speed up in the next two years driven by domestic demand. The country’s GDP is expected to grow by 2.1% next year and by 2.9% in 2015, the EC said in the autumn edition of its European Economic Forecast, published on November 5. In its previous forecast, released in May, the commission was expecting a 1% growth for 2013 and 2.8% for 2014.
Slovakia’s economy grew 2% last year, achieving one of the highest growth rates in the EU, thanks to a record increase in the production and export of cars, while the rest of the economy stagnated. The commission said that, although investments in Slovakia stabilised from their sharp fall in the second quarter of 2013, they will continue to exert a strong drag on growth throughout the year.
Although the private consumption expenditure rose 1.1% q/q in the second quarter of 2013, the push came mainly from nondurables and services, while consumption of durables continued to stagnate. The EC expects household consumption to remain subdued this year and increase gradually in 2014 and 2015.
Inflation should remain below 2% mainly due to decreasing commodity prices and the dampening effect of price regulation in the energy sector. The EC sees the budget gap at 3% of GDP this year and expects it to widen to 3.2% in 2014 and to 3.8% in 2015.
| Slovakia's key macroeconomic indicators | Autumn forecast | Spring forecast | ||||
| 2012 | 2013 | 2014 | 2015 | 2013 | 2014 | |
| GDP y/y % growth | 1.8% | 0.9% | 2.1% | 2.9% | 1.0% | 2.8% |
| Private consumption, y/y growth | -0.2% | 0.8% | 0.9% | 1.9% | 0.0% | 0.9% |
| Public consumption, y/y growth | -1.1% | 0.1% | 4.2% | 2.8% | -0.5% | 1.3% |
| Gross fixed capital formation, y/y growth | -10.5% | -5.3% | 1.2% | 3.7% | 1.4% | 3.0% |
| Exports, y/y growth | 9.9% | 4.6% | 4.6% | 6.0% | 3.0% | 6.2% |
| Imports y/y growth | 3.3% | 1.9% | 4.3% | 5.8% | 2.4% | 5.1% |
| Inflation (HICP) | 3.7% | 1.7% | 1.6% | 1.9% | 1.9% | 2.0% |
| Unemployment | 14.0% | 13.9% | 13.7% | 13.3% | 14.5% | 14.1% |
| Current account balance, % of GDP | 1.6% | 4.3% | 4.3% | 5.4% | 2.5% | 3.3% |
| General govt balance, % of GDP | -4.5% | 3.0% | 3.2% | 3.8% | -3.0% | -3.1% |
| General govt gross debt, % of GDP | 52.2% | 54.3% | 57.2% | 58.1% | 54.6% | 56.7% |
| Source: European Commission's Autumn Forecast 2013 | ||||||
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