“The Slovak state budget plan for 2008 is acceptable but the central bank would have liked an even smaller deficit to help contain inflation risks,” a central bank vice-governor Martin Barto was quoted on Monday as saying. The National Bank of Slovakia (NBS) official also said economic growth will slow down after an exceptional expansion in 2007 and 2008, and added that Slovakia was likely to see higher inflation after the planned euro adoption in 2009.
Prime Minister Robert Fico, who had benefited from record strong economic growth last year, cut the public finance deficit limit to 2.3% of gross domestic product for 2008, from 2.5%-2.7% estimated for 2007.
“The budget was done well, more exactly, there is not much to criticize in it, but from the NBS’s perspective, it could have been tighter to avoid provoking additional inflation pressures,” Barto told the daily Sme in an interview.
Slovakia’s 2007 real economic growth is projected to have exceeded the record of 8.8% in 2006 as large foreign investment projects, such as new car factories, increased export-oriented production. Growth is expected to drop below 8% in 2008, and Barto said it would decelerate further to around 6% in the next few years.
Slovakia is likely to see higher inflation, similar to previous euro zone entrant Slovenia, as the ex-communist economies converge with richer euro zone members. “Higher inflation in Slovenia is a reality, and no one is saying there will not be a certain price growth in Slovakia,” Barto said. “Gradual catching up of prices, mainly in services, must be expected, and no one is denying that.” (Finance.cz)
Producing journalism that is worthy of the name is a costly business. For over 30 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.
