Page 43 - CE Outlook Regions 2022

year-on-year. This will contribute to an acceleration of the Slovak
economic potential in the coming years.

In 2023, economic growth will accelerate to 5%, which will imply a
slight overheating of the economy. Subsequently, in 2024, the
economy will slow down again as the ministry assumes that the
absorption of resources from the next EU programming period will
be only gradual.

Erste Group analysts revised their economic growth expectations for
Slovakia down to 4.2% in 2022, from 4.8% published in the previous
forecast, mainly due to the persisting supply-side problems affecting
mainly car manufacturing in the country, and higher energy prices,
with an impact on the production side as well as on household
consumption.

The European Commission (EC) expects the Slovak economy to
reach its pre-pandemic output level already by the end of 2021 and
to continue expanding at an annual rate of 5.3% in 2022 and 4.3% in
2023, closing its output gap. A more optimistic outlook has been
published also by the EBRD, which projects Slovak GDP growth to
reach 5% in 2022, following a 4% growth in 2021.

Similar figures were published by the OECD, which projects Slovak
GDP growth at 5% in 2022 and at 4.8% growth in 2023, driven by a
robust investment related to EU Recovery and Resilience Fund
(RRF) and EU structural funds. Private consumption is expected to
strengthen as the health situation gets better in 1H22. The labour
market is seen to recover further, and household savings will
gradually normalise.

OECD analysts warned that slower absorption of EU funds could
curb investment growth and waken economic recovery, and that
Slovak private consumption could be weaker if the negative
development of the health situation in the country led to further
restrictions.

43 CE Outlook 2022 www.intellinews.com