IMF lowers outlook for Slovakias 2013 GDP growth to 2.8%.

By bne IntelliNews October 10, 2012
Slovakias economy is expected to expand by 2.8% next year, the International Monetary Fund (IMF) said in the October edition of its World Economic Outlook (WEO), revising downward its projection from an earlier expected growth of 3.1%. The global lender revised up its outlook for the countrys 2012 GDP growth to 2.6% from 2.4%. The Central European country remains an outperformer in the eurozone, where the economy is expected to shrink 0.4% this year and to recover slightly to a 0.2% growth in 2013. The Slovak export-oriented economy is driven mainly by the increased production and exports of cars, while the rest of the economy has been stagnating or even shrinking. The country's finance ministry cut last month its 2013 economic growth outlook to 2.1% from 2.6% expected in June due to a projected decline in foreign demand and the effect of budget consolidation measures. The central bank also slashed its 2013 GDP growth forecast to 2% from 3.1%. The IMF reduced its inflation forecast for Slovakia for 2012 to 3.6% from previously expected 3.8%, and kept its 2013 inflation outlook unchanged at 2.3%. The consumer price inflation, however, will stay above the average inflation in the eurozone, which is projected at 2.3% and 1.6% for 2012 and 2013, respectively. The IMF revised also its forecast for the countrys current account balance to a surplus of 0.8% of GDP for 2012 and 0.3% in 2013 from a previously expected deficit of 0.4% in both 2012 and 2013. The labour market will remain tense as the unemployment rate is seen rising to 13.7% in 2012 from 13.4% last year and fall slightly to 13.5% in 2013, above the average for the euro area of 11.2% for 2012 and 11.5% for 2013. The April unemployment forecast was nearly the same, pointing at a jobless rate of 13.8% for 2012 and 13.6% for 2013. The IMF lowered its forecast for the global economic growth from 3.5% to 3.3% for this year and from 4% to 3.6% for next year, saying that the global economy has deteriorated further since its previous report with global growth slowing again in the second quarter of 2012 after rebounding in the first. The European economy is still plagued by financial stress in the euro area periphery, which has ratcheted up, the IMF said. The recession in most of the periphery is increasingly spilling into other economies in the region, it added.

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