IMF lowers outlook for Slovakias 2011 GDP growth to 3.3%.

By bne IntelliNews September 21, 2011
Slovakias economy is to expand by 3.3% in 2011, the International Monetary Fund (IMF) said in the September edition of its World Economic Outlook (WEO), revising downward its projection from an earlier expected growth of 3.8%. The countrys economic growth will stay at 3.3% in 2012, down from a previously expected 4.2%. Nevertheless, the country will outpace the average euro zone growth by 1.7pps in 2011 and by 2.2pps in 2012. Slovakias consumer price inflation will accelerate to 3.6% y/y in 2011 reflecting the austerity measures of the government but will ease to 1.8% y/y next year. The IMF expects the current account deficit to narrow to 1.3% of the GDP in 2011 and further to 1.1% in 2012 after standing at 3.5% in 2010. The labour market will remain tense as the unemployment rate is to stay high at 13.4% in 2011 and slightly lower to 12.3% in 2012, well above the average for the euro area. The IMF cut its forecast for global growth to 4% for this and next year and said European leaders should stand by their commitments to do whatever it takes to preserve trust in national policies and the euro. We remind that in August 2011, Slovakias finance ministry revised down its economic growth forecasts for the period 2011-2014. The ministry expects the countrys economy to expand by 3.3% this year, compared to an earlier expected growth of 3.6%. Next years forecast was lowered by 1pt to 3.4%. The central bank of the country also warned that it may lower the 3.6% growth forecast in line with the ECBs revisions. The central bank will release its new medium-term forecast on September 27, 2011.

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