In its fall prognosis the European Commission (EC) announced that it expects Slovakia to have modest employment growth, weak inflation and a continuous current account surplus. According to the Commission's forecasts, employment in Slovakia will grow at a moderate pace but it's highly likely that the unemployment rate in 2014 and 2015 will remain above 13 percent.
In addition, the EC also expects that despite the large number of unemployed people, employees' wages will increase by 2 percent in 2013, with faster growth potential in subsequent years. Inflation in Slovakia has been decreasing significantly in 2013 (from 3.7 percent in 2012 to 1.7 percent) and the Commission estimates that inflation will remain below 2 percent in the next two years (1.6 percent in 2014 and 1.9 percent in 2015). According to the prognosis, deficit will stand at 3 percent of GDP in 2013, which is about 1.5 percentage points less than in 2012. When it comes to economic risks, the EC expects they will be broadly balanced. Downside risks are expected to come mainly from a possible delay in the execution of large infrastructure projects. On the other hand, a positive surprise could come from the continued recovery in household consumption and also from a modest recovery in the construction sector in 2014.
