FinMin: Slovak GDP to Increase by 3.3% in 2017, Due to Exceed 4% Later

(Stock photo by AP)

Bratislava, June 19 (TASR) – Slovakia’s GDP should grow by 3.3 percent year-on-year in 2017, before accelerating to 4.2 percent in 2018 and 4.4 percent in 2019, according to the latest prognosis of the Finance Ministry released on Monday.

While the 2017 outlook hasn’t changed compared to a prognosis from February, the prospects for 2018 have improved by 0.2 percentage points. The 2019 prognosis also stayed flat.

The Slovak economic growth in the period analysed by the Finance Ministry is expected to be driven mainly by growing household consumption, which should be the fastest since 2009, as well as private investments.

“Slovakia’s economy is doing well this year. It’s one of the highest growth figures ever. Meanwhile, the figures for 2018 and 2019 will exceed 4 percent. Mainly domestic demand and households are pulling up this growth,” said Prime Minister Robert Fico (Smer-SD) at a press conference.

The employment rate is expected to increase by 1.8 percent, with more than 40,000 new jobs due to emerge this year alone. The unemployment rate for 2017 should stand at 8.2 percent, and it should further fall to 7.5 percent in 2018 and 6.9 percent in 2019.

“I believe that we’ll reach historical lows when it comes to unemployment. If this trend continues, we can talk in two years about unemployment rates below 6 percent,” said Fico, adding that the nominal salaries should increase by 4.6 percent in 2017 and further by 4.8 percent in 2019.

At the same time inflation is forecast to be at 1.3 percent for 2017, 1.7 percent in 2018 and 1.9 percent in 2019.

“The price increase will be moderated this year by decisions of the [energy] regulatory authority from earlier this year. A relationship between salary growth and the prices of services and commodities is being restored. Inflation growth will be mitigated by an increase of nominal salaries,” said Finance Minister Peter Kazimir (Smer-SD), adding that the economic situation in Russia and China also appears to be improving, so there are no significant elements to disturb investors.

On growth exceeding 4 percent in the next two years, Slovakia should become the leader in the Visegrad Four (the Czech Republic, Hungary, Poland and Slovakia), being partly aided by the planned launch of production at Jaguar Land Rover in Nitra.

“The economic growth structure is very sound and balanced,” said Kazimir, adding that Slovakia has also experienced a revival of domestic private investment.

As for risks, they concern mostly Brexit and possible developments in the banking sector in Italy, stated Kazimir.