Central bank releases latest economic forecasts

The National Bank of Slovakia (NBS) published its latest forecasts today, in which it maintained the projected GDP growth for 2011 at 3%, while pointing to certain risks. It admitted that its forecasts are based on conservative estimates in the area of foreign demand and oil prices.

The bank adjusted its forecasts of the level of economic growth in 2010 downwards slightly from 4.3% to 4.2%, due to stronger imports than expected in 3Q 2010. NBS Governor, Jozef Makuch, said that the bank expected growth to slow in 2011 to as low as 3% of the GDP, chiefly as the government’s austerity measures start to take effect. The bank expects the growth to rebound back to around 4% in 2012, though.

Where inflation is concerned, the NBS cut its year-on-year forecast by two percentage points from 0.9% to 0.7%, which is down mainly to weaker growth in foodstuff prices than was forecast three months ago. The inflation rate should peak at around 3.9% in 2011 as prices and taxes rise overall.

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