Speeding up economic growth in Slovakia

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Speeding up economic growth in Slovakia

10. 11. 2017 13:53

Slovakia's economy is expected to expand by 3.8 percent in 2018 and further speed up to reach a 4-percent growth in 2019, the European Commission (EC) indicated in its latest economic forecast released on Thursday.

The Finance Ministry commented on the prognosis by saying that the published figures confirmed the estimates made by the ministry, which expected the Slovak economy to grow this year by 3.3 percent. The ministry went on to say that Slovakia is the only country in the European Union in which economic growth is expected to accelerate significantly over the next few years. As a result, the Slovak economy should once again become the leader of the Visegrad Four (V4) region (the Czech Republic, Hungary, Poland and Slovakia). In addition to Slovakia, only Romania and Malta are expected to record a 4-percent growth in their economy in 2019.

"I'm pleased that the European Commission has the same optics as us and it has confirmed our expectations. We're among the countries with sound public finances and I believe that we'll continue with this trend in the future," said Finance Minister Peter Kazimir in his statement.

The Commission, in line with the Slovak Finance Ministry's expectations, expects the public finance deficit to be 1.6 percent of GDP in 2017, then dropping to 1 percent of GDP in 2018. According to the EC, the deficit is projected to decrease to 0.2 percent of GDP in 2019, while the Slovak Finance Ministry expects the deficit to be 0.1 percent of GDP in 2019.

"Our public finances are heading for a balanced management, so in 2020 the deficit should be zero for the first time," added Kazimir.

Based on the current EC forecast, Slovakia should join the group of EU countries that meet the criteria of the Union's Stability and Growth Pact (SGP). This is set to be definitely confirmed by the EC's evaluation next week.

Household consumption and a revival in investments should be the main factors pulling up Slovakia's economy next year, said analysts approached by TASR on Thursday. Meanwhile, the Representation of the European Commission in Slovakia pointed to the positive role of growing employment and real salaries, as well as low interest rates. Next year should also be marked by robust private investments, especially in the car industry, and large public investment projects, most notably the construction of the Bratislava highway bypass.

"It looks good, if nothing happens - I mean mainly the Brexit talks," said the F.A. Hayek Foundation analyst Tomas Puchly, adding that Greece seems to have been stabilised, while the situation in the banking sector appears somewhat better than last year. Nonetheless, it is uncertain as to whether the Slovak Government will observe its commitment to reduce the state budget deficit, as it hasn't been so disciplined this year, added Puchly.


Martina Šimkovičová, Photo: TASR

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