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Medium-Term Forecast (MTF-2012Q4) - Summary

The December macroeconomic forecast of Národná banka Slovenska is based on currently available information, including the flash estimates of GDP and employment, monthly statistics, and ECB technical assumptions.For the purposes of this Medium-Term Forecast, Národná banka Slovenska took into account the lower external demand, subdued domestic demand, negative trends in forward-looking indicators, worse labour market situation, and current consolidation measures.

External demand for Slovak products and services is expected to bottom out at the end of 2012 and beginning of 2013, and therefore economic growth in 2013 is assumed to slow quite markedly. Fiscal consolidation measures will act as a brake on economic growth (as projected in the previous quarter), mainly by weighing on investment and domestic consumption.

The slowdown in economic activity, as well as the potential effects of amendments to labour and social legislation, could from as early as the fourth quarter of 2012 cause employment to fall and unemployment to rise, with the effects being felt throughout 2013. As external demand picks up, the domestic part of the economy should also begin to recover, and the assumption is that from 2014 it will make a positive contribution to GDP and support a moderate economic expansion (Chart 1). This growth is expected to see an increase in job creation and gradual decline in the unemployment rate.

The outlook for macroeconomic developments has deteriorated since the previous forecast. Slovakia’s economic growth is now projected to be 2.4% in 2012, 1.6% in 2013 and 3.5% in 2014. The inflation rate is assumed to decelerate far faster than previously projected, falling to 3.8% in 2012, 2.3% in 2013 and 1.9% in 2014. The risks to this forecast’s projections for the real economy are predominantly on the downside, while the risks to the inflation projections are on the upside.

Related chart [.pdf, 89.9 kB]

Eurosystem Staff Macroeconomic Projections for the Euro Area, December 2012. For further details, visit the ECB website at Since the cut-off date for the data on which the assumptions are based was 23 November 2012, the only available information on GDP was the flash estimate, according to which the Slovak economy grew in the third quarter by 0.6%.

Petra Pauerová
NBS Spokesperson

National Bank of Slovakia
Press and Editorial Section
Imricha Karvasa 1, 813 25 Bratislava, Slovak Republic
Tel.: +421-2-5787 2142, +421-2-5865 2142, +421-2-5787 2169, +421-2-5865 2169

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