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European Commission Predicts 2.7-percent Growth in Slovakia in 2010
Wednesday 05 May 2010 Zoom in | Print page
Brussels, May 5 (TASR) - The European Commission in its regular spring economic prognosis has given the chapter on Slovakia the headline: 'Moderate Growth Ahead'.
According to the Commission's estimates, Slovakia and Poland will see the fastest economic growth in 2010, namely 2.7 percent of GDP. The prognosis for 2011 is even more optimistic, with Slovakia experiencing growth of 3.6 percent, taking second place in the EU right behind Estonia (3.8 percent).
As far as unemployment goes, 14.1 percent of Slovaks are expected to be out of work in 2010 (9.8 percent overall in the EU), the fifth-highest rate in the EU. The unemployment rate in Slovakia is predicted to fall to 13.3 percent in 2011 (9.7 percent in the EU).
Most of the foreign investments in Slovakia this year are planned in the automobile industry, which was the driving force behind Slovakia's economy in the recent past. The European Commission cautions that specialisation in a single field makes Slovakia vulnerable in terms of foreign demand for specific products.
Slovakia's public finances are vulnerable as well due to the global economic crisis. This is illustrated mainly by the state budget deficit, which has grown from 2.3 percent in 2008 to 6.8 percent of GDP in 2009. With respect to planned cuts in expenditures, the European Commission expects Slovakia's public-finance deficit to drop to 6.0 percent of GDP in 2010, and to 5.4 percent a year later.
The European Commission in general and EU Commissioner for Economic and Monetary Affairs Olli Rehn in particular view the upcoming June 12 parliamentary elections as a crucial turning point. "I'm aware that the election is drawing near, and my message to Slovakia is as follows: although Slovakia has seen favourable economic developments over the past decade, it's now extremely important to intensify efforts for fiscal consolidation as soon as possible. That will be one of the main challenges for the next government," said Rehn.
The Commission also predicts that the public debt will rise from 35.7 percent last year to 40.8 percent in 2010, and to 44 percent in 2011.
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