NBS: Growth in Slovak Economy Should Slow to 2.3 percent This Year

NBS: Growth in Slovak Economy Should Slow to 2.3 percent This Year

Bratislava, December 17 (TASR) – Growth in the Slovak economy should slow to 2.3 percent this year and reach 2.2 percent next year, according to the Slovak central bank’s (NBS) latest mid-term prediction for the final quarter of this year released on Tuesday.
NBS has reduced its prediction for GDP growth for both this year and next by 0.2 percentage points (p.p.).

The central bank revised the estimate of GDP growth due to the weaker external environment. The domestic part of the economy has resisted negative effects so far, but consumer demand should slow the growth rate slightly in the upcoming years. “There are risks in the air that could make forecasts worse,” said NBS governor Peter Kazimir at a press conference.

The Slovak economy is expected to accelerate in 2021 and record growth of 2.5 percent, while growth should stand at 2.6 percent in 2022.

The cooling of the economy will be reflected in slower growth in employment and salaries next year. NBS estimates employment growth at 1.3 percent this year, not changing the estimate from its previous forecast. As for next year, the estimate has dropped by 0.1 p.p. to 0.2 percent. It should stand at 0.1 percent in 2021. The unemployment rate should reach 5.9 percent this year, 6.2 percent next year and 6.3 percent in 2021.

“We expect a slowdown in employment growth. We’ve seen a record in terms of figures. We expect that the weakening of the industrial sector will also mean a slowdown in employment growth. Salaries will continue to grow faster than prices,” added Kazimir.
According to NBS, inflation should reach 2.7 percent this year, 2.5 percent next year and 2.1 percent in 2021. In 2022, prices will increase by 1.7 percent.