NBS: Slovakia’s GDP growth Should be 4 percent in 2018 and 4.5 percent in 2019

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(stock photo by TASR)

Bratislava, September 25 (TASR) – The gross domestic product (GDP) should grow by 4 percent this year, 4.5 percent next year, and slow down to 4 percent in 2020, TASR learnt from the mid-term prognosis of the Slovak central bank (NBS) as presented on Tuesday by NBS governor Jozef Makuch, with NBS vice-governor Ludovit Odor in attendance.

“This year the Slovak economy should grow by 4 percent. In terms of forecasting it’s expected to see a pro-growth influence of public investment driven by faster growth in the drawing of EU funds and households’ consumption, which should be boosted thanks to salary hikes. The exports should benefit from the production launch in the automotive industry,” said Makuch.

“Compared to the previous forecast, the economy in 2019 should grow at a slower pace by 0.3 percentage point to reach 4.5 percent. The reason for this downward revision is weaker foreign demand and an earlier investment start in the automotive industry,” added the NBS governor, noting that the GDP growth in 2020 is projected at 4 percent.

According to Makuch, Slovakia’s GDP developed in line with expectations in the second quarter of 2018. “Exports were stronger and gross fixed capital formation grew faster, benefiting mainly from the investment growth in the automotive industry. When compared to expectations, more favourable developments were recorded in other private investments, while private consumption showed weaker dynamics, as it didn’t follow up with the strong growth of salaries,” he said.

According to the NBS governor, Slovakia’s economy is in “good shape” and therefore it’s necessary to use these “good times” to implement structural reforms aimed at increasing the growth potential of the economy and creating scope for setting fiscal policies to cover future risks.