National Bank: GDP growth expected at 3.2 percent this year

According to the latest medium-term forecast that the central bank (NBS) released on Tuesday, Slovakia's economy should grow by 3.2 percent this year before gathering momentum and growing by 4.2 percent next year and by 4.6 percent in 2019 on the back of fresh investments in the automotive sector. Looking back at the final quarter of 2016, NBS noted that robust domestic consumption and exports made up for a fall in investments. "Growth both in exports and private consumption is expected to continue in the period covered by the prediction. Positive stimuli in the form of new investments in automotive production are projected to work towards an acceleration in growth to 4.2 percent in 2018 and to 4.6 percent in 2019," said NBS governor Jozef Makúch. Turning to the labour market, Makúch noted that the economy currently continues to add jobs at a brisk pace, especially in the services sector. NBS has upgraded its forecast regarding this year's employment growth to 2 percent. The rate of growth is expected to dampen down somewhat, however, due to increasing signals of tensions on the labour market caused by an ever more pronounced shortage of qualified workers. Job market imbalances should be attenuated in part by a rise in the number of hours worked, as well as an inflow of foreign workers. The unemployment rate is expected to hit its lowest ever level of 6.9 percent in 2019. Makúch went on to caution that the economy might begin to show signs of overheating next year, so policy-makers wouldn't be remiss in stabilising the economic environment by continuing to consolidate public finances.