Slovakia's GDP growth is expected to slow to 2.4% year-on-year in 2019, according to the latest prognosis published by the Finance Ministry on September 19.
“Weaker prospects among our trading partners will squeeze dynamics of Slovakia's labour market and household consumption,” stated Branislav Zudel and Monika Pecsyova from the Institute of Finance Policy (IFP).
IFP has also revised the outlook for Slovakia's GDP growth in 2020, slowing from 3.4% y/y to 2.3%, stressing an expected stagnation in unemployment rate and a deceleration in salary growth.
The unemployment rate is expected to fall to its lowest-ever level of 5.8% in 2019, and then fall further to 5.7% until 2022. The average nominal salary is expected to grow by the highest amount since 2008, up 7.4% in 2019, mostly due to a more than 12% salary hike in the public sector. The outlook for salaries growth in the private sector is 6%. However, the total salary growth will reduce to 5% y/y in the next few years.
Consumer prices are expected to accelerate by 2.5% y/y in 2019, with inflation rate going slightly down to 2-2.3%.
An earlier June prognosis expected GDP to reach a 3.5% growth y/y in 2019, following a 4.1% increase in 2018.