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Havlik: Euro Has Made Slovak Economy Stable
Friday 29 Octtber 2010 Zoom in | Print page
Vienna/Bratislava, October 29 (TASR) - Slovakia's economy won't see a repeat of the rapid growth that it experienced in 2006-08, but it's economy coped quite well with the economic crisis, Vienna Institute for International Economic Comparison chief economist Peter Havlik has told TASR.
GDP is predicted to increase by a maximum of 3-5 percent in the next few years due to the economic situation in the EU. "Most states need to consolidate their public finances at the moment. They will need to lower their debts and public finance deficits, introduce cuts in budgeting and austerity measures. All of this will have an adverse effect on the growth rate of the economy," stressed Havlik.
Despite this, Slovakia's economy has managed to overcome the consequences of the economic crisis quite well. While Poland, the Czech Republic and Hungary coped with the crisis by devaluing their national currencies; Slovakia, as a eurozone member, had to look for other measures in order to maintain its competitiveness. "A significant reduction in the number of jobs and an unexpected improvement in work productivity - that's how Slovak industry maintained its competitiveness despite losing the option of devaluing the national currency," said Havlik.
During the first few months of the crisis, the strong euro was a burden for Slovakia, causing losses in export industries such as textiles and tourism. On the other hand, higher labour productivity strengthened Slovak industry and its position on foreign markets. "Because of this, the euro is beneficial for Slovakia in the mid and long term, keeping the Slovak economy stable," he added.
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