IMF projects strong economic recovery in Slovakia.

By bne IntelliNews April 23, 2010
The Slovak economy would rebound from the economic crisis to a healthy 4.1% y/y growth in 2010, according to the updated IMF projections, included in the latest edition of its World Economic Outlook report. On the other hand, the forecasts implied that the crisis would still have a long-term negative impact on the local economy through reducing its potential growth. In our opinion, this is suggested by the mid-term projection for a 4.2% y/y GDP growth in Slovakia for 2015, which is relatively stable from the expected performance for 2010 and the forecast 4.5% y/y expansion for 2011. At the same time, the IMF saw only a limited improvement on the labour market despite the quick recovery from the crisis. It projected only a low decline of unemployment by 0.5pps y/y to 11.6% in 2010 and to 10.7% in 2011. Average consumer inflation was forecast to steadily accelerate to 0.8% y/y in 2010, 2% y/y in 2011 and 3% y/y in 2015, possibly spurred by the still incomplete convergence of the country to the eurozone. The current account deficit was seen to renew its upward trend, widening to 1.8% of GDP in 2010 and further to 1.9% in 2011 and 2.7% in 2015.

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