NBS: Coronavirus Pandemic to Throw Slovakia into Recession

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(Stock photo by TASR/AP)

Bratislava, March 24 (TASR) – Slovak economy might see a temporary slump of almost 5 percent this year and there’s a risk that the new coronavirus pandemic might cause an even more pronounced drop of up 10 percent, with the recession likely to deprive 75,000-130,000 people of work temporarily, according to potential scenarios for economic development released by the Slovak Central Bank (NBS) on Tuesday.

In light of the extremely swift changes affecting economic environments both in Slovakia and abroad, the NBS has replaced its standard mid-term predictions with several potential scenarios, all of which take into account an expected two-month shutdown of services and varying drops in demand on the part of Slovakia’s trading partners.

“All of these are quite ugly figures. However, we see the light at the end of the tunnel. The Slovak economy will weather this, some bruises and scratches notwithstanding. What’s important here is the fact that this crisis period is only temporary and as swiftly as it began, our recovery is expected to be equally swift,” NBS governor Peter Kazimir told the media.

Kazimir, a former finance minister, pointed out that central banks work to cushion the impacts of the crisis. In the last two weeks, the European Central Bank approved a series of measures to reduce stress, panic and protect the stability of the financial sector.

Already in late 2020, a resuscitation of the economy is projected to take place and 2021 is expected to be the year of restored labour, production and consumption. “We believe that the economy will swell back to pre-crisis levels already sometime during the next year,” said Kazimir.