NBS: Slovak GDP Estimated to Fall by 5.7 percent Y-o-Y in 2020

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NBS governor Peter Kazimir. (Photo by TASR)

Bratislava, December 16 (TASR) – The Slovak central bank (NBS) estimates that an economic slump of 5.7 percent of GDP year-on-year will be recorded in the country in 2020, with a revival of 5.6 percent y-o-y projected for 2021 and growth of 4.8 percent y-o-y for 2022, NBS governor Peter Kazimir announced at a press conference on Wednesday.

Thanks to a series of one-off measures introduced by the Government in the past few months, the recession won’t be as pronounced as it appeared to be in the autumn, said Kazimir, pointing also to recent positive developments seen in the eurozone and a revival in global trade. This has helped Slovak industry, mainly the automotive branch.

NBS now expects a relatively faster return to pre-crisis levels in the second half of 2021. Nevertheless, the final quarter of 2020 will be far worse than the previous one, as the service sector has suffered significantly from restrictions related to the spread of coronavirus, noted Kazimir. In this respect, he stressed the importance of quickly vaccinating as many people as possible.

Employment in Slovakia is expected to drop, and it won’t recover before the second half of 2021. The unemployment rate is forecast to peak at just under 8 percent in 2021, before going down to something over 7 percent. As many as 70,000 jobs ceased to exist this year, but the Government’s measures have helped to rescue 60,000 other jobs.

Nominal salaries have risen by 1 percent this year, with real salaries expected to rise by 4 percent and nominal salaries by 5 percent y-o-y in 2021.

The public finance deficit should reach 6.6 percent of GDP this year, which will be somewhat lower than in the state budget for 2021. The deficit is estimated to go down gradually to 4 percent in the next three years, with the state debt settling at around 60 percent of GDP.