Analyst: Uncertainty Over Consolidation Measures Worsens Economic Sentiment

Bratislava, September 27 (TASR) - Uncertainty surrounding planned consolidation measures and their final form as well as contradictory statements by politicians have fuelled the growing economic concerns to a certain extent, 365.bank analyst Tomas Bohacek stated on Friday in response to September's economic sentiment data released by the Statistics Office earlier in the day. "Even though the final form of consolidation measures is not yet known in some fields, the trend of growing costs is indisputable and what remains to be seen is the scope of impact on individual sectors, which is a typical concomitant phenomenon of selective changes to the VAT tax rates," stated Bohacek. Such changes are negative and serve to deform the economy, as made evident also by numerous studies conducted by the International Monetary Fund and OECD, which classify the system of varying VAT rates for individual sectors as obsolete and inefficient. "Form the point of view of the surveyed indicators and their impact on real data, the caution exercised by market participants might manifest adversely as early as this year, despite the fact that the measures are slated to come into effect only as of next year. That caps any economic growth at 3 percent at the very most in our view," added the analyst. mf/mcs