IMF cuts outlook for Slovakia’s GDP growth to 0.8% for 2013, 2.3% for 2014

By bne IntelliNews October 9, 2013

The International Monetary Fund (IMF) cut its 2013 economic growth forecast for Slovakia to 0.8% in the October edition of its World Economic Outlook (WEO) from 1.4% expected in April. The fund projected the Slovak economic growth to speed up to 2.3% next year, revising down its previous forecast of 2.7%.

Despite the downgrade, the Central European country remains an outperformer in the eurozone, where the economy is expected to shrink by 0.4% this year and to recover slightly to a 1% growth in 2014. But the weak economic activity in the eurozone, which has spilled over from the periphery to the core, is affecting the Slovak economy, which is driven chiefly by exports and the eurozone is its main trading partner.

The IMF reduced its inflation forecast for Slovakia for 2013 to 1.7% from previously expected 1.9% and maintained its 2014 outlook at 2%. The consumer price inflation, however, will stay above the average inflation in the eurozone, which is projected at 1.5% in both 2013 and 2014.

The IMF expects the labour market to remain tough as the unemployment rate is seen rising from 14% in 2012 to 14.4% in both 2013 and 2014. The Slovak jobless rate will stay significantly above the projected eurozone average of 12.3% and 12.2% for this and next year, respectively.

  2012 actual 2013 2014 2013 2014
    current forecast   previous forecast  
Real GDP growth 2.0% 0.8% 2.3% 1.4% 2.7%
Average annual inflation 3.7% 1.7% 2.0% 1.9% 2.0%
Current account balance, % of GDP 2.3% 3.5% 4.2% 2.2% 2.7%
Unemployment 14.0% 14.4% 14.4% 14.3% 14.3%
Source: IMF          
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