Central Bank Cuts Estimates for Economic Growth and Inflation in 2025

Bratislava, December 17 (TASR) - The Slovak economy is expected to grow by 2.3 percent next year, which will be slightly faster than this year's 2.1 percent, Slovakia's central bank (NBS) stated in its current winter forecast published on Tuesday, adding that inflation should temporarily accelerate above 4 percent from this year's 3.2 percent. The bank thus lowered its assumptions from the previous autumn forecast, when it expected economic growth of 2.5 percent and inflation at 5 percent. NBS governor Peter Kazimir noted that without government-approved assistance with energy prices, inflation would rise to 5 percent next year. "Although the government's measures on energy prices will help households, they also place a considerable burden on public finances. It's important that this kind of aid is time-limited and as targeted as possible," he stressed. While NBS considers the acceleration in inflation to be only a temporary phenomenon, the perception of the real economy is more negative. According to Kazimir, European countries are facing significant challenges, and economic growth is expected to hover at around 2 percent. Meanwhile, the estimates from last year exceeded 3 percent. The Slovak economy is currently benefitting from short-term positive impulses, such as investments in the automotive industry and the drawing of EU funds. However, according to Kazimir, this will be limited in the second half of this decade, and so Slovakia needs to modernise its economy. New investment should be directed towards infrastructure, technology, science, research and innovation, and it should be handled by politicians, not central banks, and as quickly as possible. When it comes to the labour market, NBS expects employment in Slovakia to remain stable. lin/df