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Sramko: Optimism Returning on Global Scale, Uncertainty Decreasing
Thursday 26 November 2009 Zoom in | Print page
Bratislava, November 26 (TASR) - According to Slovak central bank (NBS) governor Ivan Sramko, the world has learnt at least one thing from the crisis - that no country will from now on let big financial institutions fall.
"The fall of a big institution within the system is the greatest mistake that a country can make," said Sramko at the International Club meeting in Bratislava on Thursday.
Sramko noted that optimism is returning on a global scale in regard to future economic development. "Uncertainty is decreasing and a period of more optimism is setting in, which is reflected on financial markets. From the view of consumption in the field of foreign demand, our economy is still sensitive to falling demand, which is in turn seen in our GDP," he stated.
The NBS head recalled that at the moment it is important to consolidate public finances and lower the state debt. "The debt is estimated to reach 40 percent of GDP, which isn't positive, while long-term problems are incorporated in it," he said.
According to the official Finance Ministry plan, the public deficit should gradually decrease from this year's 6.3 percent of GDP to 5.5 percent next year, 4.2 percent in 2011 and to the permitted level of 3 percent in 2012.
The global economic crisis is reflected in companies mainly in that they are creating lower added value and profits. "The growth of domestic incomes, and consequently of consumption, is slowing down. Employment is falling and unemployment is rising, many investments have been suspended and the inflow of foreign direct investors has fallen as well," said Sramko.
When the crisis finally ends and a period of growth sets in, companies won't return to the levels they were at before the crisis. "They will certainly be forced to employ lower numbers of employees then before the crisis. Therefore, it is our foremost task to attract new investors and new investments to maintain employment in this way," he said.
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