Slovak News Back to the news
Finmin: Consolidation Will Slow Down Economy, But It's Essential
Tuesday 14 September 2010 Zoom in | Print page
Bratislava, September 14 (TASR) - The planned consolidation of public finances in 2011 will slow down growth in the Slovak economy, reads the latest macro-economic prognosis drawn up by the Finance Ministry.
Despite an expected increase in European funds, economic growth in 2011 will be held back by 0.5 percentage points due to measures designed to reduce the state deficit.
The Government plans to lower the deficit from the 7.8 percent of GDP estimated for this year to 4.9 percent next year. This will require fiscal measures equalling 2.5 percent of GDP, as the deficit would reach 7.4 percent of GDP next year if left unchecked.
"Even though economic growth in 2011 would stand at 3.8 percent instead of the estimated 3.3 percent without fiscal consolidation, the prospects for securing stable growth in years to come would be significantly threatened," the ministry points out.
The Slovak economy is estimated to grow faster in the next few years due to an improved situation on the labour market and a consequent revival in household consumption: to 4.5 percent in 2012 and to 4.7 percent in 2013.
All rights reserved. Any publishing or further dissemination of press releases and photographs from TASR's resources without TASR's prior written approval constitutes a violation of the Copyrights Act.
