OECD: Slovakia's GDP growth to slow down

Slovakia will see a deceleration in its GDP growth this and next year, with a slight recovery in 2021, according to the latest outlook survey released by the Paris-based Organisation for Economic Co-operation and Development (OECD). As the reason behind the deceleration, the OECD cites weaker external demand that has a negative impact on exports. The OECD expects Slovakia's GDP to grow by a mere 2.5 percent this year, following a 4-percent growth in 2018. In 2020, GDP growth should fall further to 2.2 percent, partly recovering with 2.6 percent in 2021. Domestic demand should continue to be relatively strong, chiefly as a result of private consumption, which will be maintained by a resistant labour market with low unemployment. The fiscal position will be neutral in 2020 and 2021. However, with regard to the absence of excess capacities and medium-term challenges posed by an ageing population, it will be important to restrict the pressure on public spending. A thorough public sector reform might increase efficiency and financial reforms supporting Roma inclusion. Political uncertainty in the field of trade and further deceleration on export markets, chiefly in Germany, remain the chief negative risks to Slovakia's economic outlook. The faster growth in private consumption poses a risk, too, as salaries might grow more than they were planned to and the high savings rate might thus decrease.