GDP growth expected at 3.3 percent in 2017

The Finance Ministry's Financial Policy Institute released the latest macroeconomic prognosis on Monday. It predicts the Slovak economy to post growth of 3.3 percent this year, before growing at an even brisker clip in the years to come. Future growth should be boosted in particular by new automotive production. Growth in exports by as much as 7 percent in 2018 and 2019 is envisaged to come hard on the heels of the launch of a new vehicle production plant. The prospects for the labour market are also good, as the employment rate is predicted to go up by 1.8 percent and the economy should add 42,000 new jobs this year. "The positive developments on the jobs market will reduce the unemployment rate to 8.4 percent [this year]," stated the institute. Employment growth in 2018 should amount to 1.1 percent.
The average nominal salary should go up by 3.5 percent to €942 per month this year, with real salaries to follow suit, growing by 2.4 percent. Consumer prices should bottom out and resume growth - at 1.1 percent in 2017, primarily buoyed by net inflation. As for risks potentially jeopardising growth, the ministry's analysts primarily point to unclear political prospects in Europe, the hard Brexit scenario, and the onset of protectionism in global trade. "The fuzziness of upcoming political moves makes it impossible for now to quantify the extent of these risks. The instability of the banking sector in Italy is another risk. By contrast, fiscal expansion in the United States and the too early lifting of the Czech National Bank's exchange-rate commitment are positive risks," stated the Financial Policy Institute.