The European Commission has stated that it expects the Slovak economy to be one of the fastest growing in the EU for this year, increasing the forecast of GDP growth in Slovakia from 2.7% in the spring to 4.1% now, which would put it second only to Sweden (4.8%) in terms of growth.
Overall, though, next year should see the country slide back in terms of growth as the government’s austerity package hits in, with economic growth projected to slow to about 3%. It should then rebound again in 2012 to around 4%.
In its autumn prognosis, the European Commission also expects unemployment in Slovakia to drop by about 0.3% next year to 14.2% and then by 0.8% in 2012 to reach 13.4%.
In terms of annual inflation, the projections expect this to remain the same this year at 0.7%, while next year it should rocket to 3.2%, before slowing slightly again to 2.8% in 2012.
Thanks to the government’s austerity steps and its consolidation package, the budget deficit should fall from the 8% of GDP projected for this year down to a more manageable 5.3% next year, and then continue to drop in 2012.