Slovak economy to grow by 3.2% this year

The Slovak economy is expected to grow this year by 3.2 percent, 3.8 percent in 2016 and 3.5 percent in 2017, according to the latest mid-term prediction of the Slovak central bank (NBS) released on Tuesday. "Whereas the positive impact of the reduction of oil prices on the economy has been lower than expected in the previous prognosis due to the slight increase in crude oil euro prices, the fully realised programme of extended purchase of assets will have a positive impact on the Slovak economy mostly by virtue of higher eurozone demand and the weaker euro exchange rate", NBS Governor Jozef Makúch said at a press conference. According to him, the quantitative easing launched by the European Central Bank (ECB) is likely to have a positive impact on Slovak economy in the form of 0.6 percent GDP growth in the next two years. Aside from ECB activities, it's also rising foreign and domestic demand that should contribute to the acceleration of the Slovak economy. "The growth is likely to be driven also by the expected dynamic growth in the Slovak export markets, particularly due to the improved eurozone outlook", added Makúch. Also, more jobs are expected to be created on the labour market, said NBS. "Rising domestic demand also fuels the employment, which is increasing quicker than expected. We expect 22,000 jobs to be created in 2015", said NBS vice-governor Jan Tóth, adding that average employment could be 12 percent in 2015 and drop to 10 percent by 2017. NBS also expects wages to grow. "Salaries will rise quicker particularly in the health care and education sectors and should align gradually with labour productivity", said Tóth. In 2015, wages are likely to grow by 2.6 percent. Consumer prices this year should drop by 0.3 percent, said NBS, whereas inflation is expected to start rising as of next year and equal 1.7 percent in 2016 and 2.4 percent in 2017.