Page 44 - CE Outlook Regions 2022

The Slovak finance ministry expects the unemployment rate to reach
6.7% in 2022, down from 7% expected at the end of 2021. Further
decline should be supported by the investment from RRF.

The EC expects the Slovak unemployment rate to amount to 6.8% in
2021, slightly higher than in 2020, with a further improvement
forecasted from 2022, with the unemployment rate falling to 5.6% in
2023. Wage growth is expected to gather pace as labour market
slack diminishes, productivity rebounds, and inflation increases.

As the EC also stressed, the permanent short-time work scheme or
kurzarbeit will not take effect in Slovakia until March 1, 2022, thus
during January and February of 2022 employers and the
self-employed persons will receive allowances to maintain
employment through the government's current First Aid package
which was approved by parliament in December 2021.

Erste Group forecasts the unemployment rate to reach 7% in 2021
with an expectation of a gradual decline in the coming quarters,
however, slower than projected. In 2022, unemployment should
decline to 6.4%.

2.6.2 External environment

As stressed by the finance ministry forecast, Slovak exports are
expected to be hampered by a shortage of components. Global
demand for goods remains high and supply cannot keep up. As a
result, inflationary pressures and production shortfalls have been
rising. The ministry projects these to adversely affect Slovak exports
and real output economy in 2021 and 2022.

According to the central bank (NBS) outlook, the negative impact of
component shortages on Slovak export growth in 2021 is projected
to be around 2.8 percentage points, and on GDP growth, 1.1

44 CE Outlook 2022 www.intellinews.com