Slovak banks cut 2014 GDP growth forecast to 2.3%, 2015 estimate to 2.6%

By bne IntelliNews September 26, 2014

Slovakia's economy is expected to expand by an average of 2.3% this year, local banks said in their September forecast, lowering their expectations from a 2.5% growth forecast a month ago, the National Bank of Slovakia (NBS) said.

NBS polls each month six selected banks for their calculation on macroeconomic and monetary indicators. The range of the 2014 GDP growth forecasts was 2.2%-2.7%, compared to 2.2%-3% in the August forecast.

Moreover, Slovak bank analysts cut their average estimate for the economic growth for 2015 to 2.6% in September from 2.9% in August as the range of forecasts narrowed to 2.4%-3% from 2.5%-3.5% last month.

Regarding inflation, the bank analysts also lowered their expectations to 0.4% for 2014 from 0.7% in August. The outlook for 2015 was reduced to 1.6% from 1.9%.

The lenders' expectations are more pessimistic than the latest IMF's forecast that sees Slovakia's economy growing by 2.5% in 2014. The European Commission expects a GDP growth of 2.2% in 2014, while the Slovak central bank and the country’s finance ministry both expect a 2.4% economic growth for 2014. However, the country’s finance ministry recently cut its 2015 GDP growth forecast to 2.6% from 3.0% citing worsened prospects regarding foreign demand and a decline in government consumption.

Slovakia's annual economic growth accelerated to 2.5% in the second quarter of 2014 from 2.4% in the previous quarter. Last year, the country’s economy expanded by 0.9%.

Indicators, banks average forecast Sep-14 Aug-14 Sep-14 Aug-14
  for 2014 for 2014 for 2015 for 2015
GDP, y/y % 2.3% 2.5% 2.6% 2.9%
HICP, y/y % 0.4% 0.7% 1.8% 2.0%
Consumer prices, y/y % 0.4% 0.7% 1.6% 1.9%
Core inflation, y/y % 0.6% 1.0% 1.8% 1.9%
Producer prices, y/y % -2.3% -1.2% 1.7% 1.8%
Current account balance, EUR mn 1,704.8 1,724.2 1,527.1 1,725.7
Trade balance, EUR mn 4,200.3 4,162.3 4,070.8 4,234.2
Source: National Bank of Slovakia        

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