Slovak banks improve 2014 GDP growth forecast to 2.5%, up 2015 estimate to 3.1%

By bne IntelliNews June 26, 2014

Slovakia's economy is expected to expand by an average of 2.5% this year, local banks said in their June forecast, raising their expectations from 2.4% 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%-2.8% compared to 2.0%-3.0% in the May forecast.

Slovak bank analysts also raised their average estimate for the economic growth for 2015 to 3.1% in June from 3% in May, and the range of forecasts was slightly increased to 2.5%-4% from 2.5%-3.5% last month.

Regarding inflation, however, the bank analysts kept unchanged their expectations at 1.1% for 2014 (speeding up from 0.4% in 2013). The outlook for 2015 was lowered to 2% from 2.3%.

Lenders' expectations are a bit more optimistic than the estimates of the International Monetary Fund (IMF) and the European Commission which see the Slovak economy expanding by 2.3% and 2.2%, respectively, this year. The Slovak central bank expects a 2.4% growth in 2014. Earlier this month, the finance ministry raised its 2014 GDP growth forecast to 2.4% from 2.3% citing improving conditions on the labour market and a better-than-expected revival of exports. The finance ministry kept its 2015 growth forecast at 3.0%.

Slovakia's annual economic growth accelerated to 2.4% in the first quarter of 2014 from 1.5% in the previous three months, supported by rising exports and domestic demand. In 2013, the country’s economy expanded by 0.9%.

Indicators, banks average forecast Jun-14 May-14 Jun-14 May-14
  for 2014 for 2014 for 2015 for 2015
GDP, y/y % 2.5% 2.4% 3.1% 3.0%
HICP, y/y % 1.2% 1.2% 2.0% 2.3%
Consumer prices, y/y % 1.1% 1.1% 2.0% 2.3%
Core inflation, y/y % 1.4% 1.5% 1.9% 2.2%
Producer prices, y/y % -2.0% -0.4% 2.0% 2.1%
Current account balance, EUR mn 2,400.6 1,841.5 1,451.8 1,996.6
Trade balance, EUR mn 3,923.5 4,605.3 4,187.0 4,898.3
Source: National Bank of Slovakia        

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