SOPK: Economy to Keep Up Growth Pace in 2017

SOPK head Peter Mihok speaking at a conference on prospects for Slovakia's economy in 2017

Bratislava, January 24 (TASR) – The state will collect more income from self-employed individuals and businesses this year than in 2016, Slovak Trade and Industry Chamber (SOPK) chairman Peter Mihok said at a conference in Bratislava on Tuesday.
Mihok was speaking at the 20th edition of the ‘Expected Developments in the Slovak Economy’ conference, where the business sector is looking ahead to what is believed to be in store for the country’s economy in 2017.

Slovakia is in a good situation in terms of macroeconomy heading into 2017, said Mihok. The expected growth of 3.6 percent of GDP in 2016, along with the unemployment level of around 9 percent and the deficit below 2 percent of GDP, augur well for the Slovak economy in 2017. It’s well-positioned to keep up the pace, he said.

“The measures that the Government and Parliament adopted in 2016 and that have taken effect in 2017 are both positive and negative for the business sector. The state will receive more money from the business sector this year than last year. There are two negative measures for each positive measure,” said Mihok.

The policies seen as favourable by SOPK include a reduction in corporate income tax from 22 to 21 percent and changes to lump-sum allowances for the self-employed. On the flip side, the negative measures are exemplified by an increase in levies for regulated sectors, by changes to the assessment bases for social and health-care levies, and by the introduction of a 7-percent tax on dividends.

Mihok pointed out that the EU’s prospects at the beginning of 2017 are somewhat dimmer, as high growth rates are a thing of the past. “The EU will go through difficult times in 2017 and with no hope of resolving the issues of boosting its competitiveness and changes to the way it functions,” said Mihok, contending that elections and political problems in a number of EU countries will distract from coming to grips with economic challenges.

“Against this unfavourable backdrop, Slovakia’s economy will, nevertheless, grow further, benefiting not only from exports, but also increasing domestic consumption. It is likely to remain among the fastest-growing economies not only in the eurozone, but across the EU,” he added.

SOPK’s latest macroeconomic forecast puts Slovakia’s growth at around 3.5 percent of GDP in 2017. It should be buoyed primarily by a rise in investment and domestic consumption. An increase in exports is predicted to exceed a rise in imports by a moderate margin. The growth is expected to gather momentum further beyond 2017, partly thanks to the planned launch of a Jaguar Land Rover plant near Nitra. The unemployment rate is envisaged to drop even lower to around 7 percent.