According to estimates from leading economic institutes, the economy of the euro zone as a whole appears to be gradually strengthening, with its pace of growth doubling in the first quarter of this year. Slovakia is also expected to profit from this improvement, with the growth of economic output in the euro zone helping to expand the Slovak economy and further acceleration.
Even the International Monetary Fund is optimistic for Slovakia: Based on prognoses disclosed on Tuesday, the IMF projects that Slovakia’s economic output will bolster profoundly from last year’s 0.9 percent to 2.3 percent in 2014.
They’re not alone in their prognosis either. Professor Rudolf Sivák, the rector of the University of Economics in Bratislava affirmed this on Tuesday by predicting that Slovakia's gross domestic product should grow by more than 2 percent on an annual basis this year. “If current growth prognoses made by international institutions materialise, then the key export markets for Slovakia should continue to rise at a moderate pace in 2014, which will have a mildly positive effect on the Slovak economy”, said Sivák, speaking at a conference devoted to the Slovak economy organised by the university.
According to Sivák, unlike in the past two years, the growth of Slovakia’s economy will be spurred on by domestic demand as well. “We base our assumption on the fact that both private demand and public administration consumption should contribute to this”, said Sivák. He added that household consumption, for its part, should be fuelled by moderate growth in employment levels as well as an acceleration in the growth of real salaries.
At the same time, Sivák pointed to several risks threatening Slovakia's economic growth represented by the current geopolitical situation and the threat of deflation. An escalation in the tensions between Ukraine and Russia as well as between Russia and the European Union could disrupt mutual trade, he added. Furthermore, a potential cut in energy supplies from Russia would impact Slovakia negatively. “On the other hand, Slovakia exported goods worth €3 billion to Russia and Ukraine in 2013, which accounts for almost five percent of Slovakia's total exports”, added Sivák.
