Growth in Slovakia’s economy will slow by more than previously expected next year due to weaker demand for its exports as well as the impact of government austerity measures.
The finance ministry said the country’s export-led economy had so far managed to buck the euro zone slowdown, mainly thanks to booming demand for locally-built Volkswagen and Kia cars.
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Vehicle makers have been attracted to Slovakia over the past decade by lower labour costs than in western European countries.
The weakening global economy is starting to have an impact, prompting the ministry to cut its forecast for the heavily export-reliant economy’s growth to 2.1% in 2013, from 2.6%. It has kept this year’s growth outlook at 2.5%.
The ministry said in August that additional EUR629.3m (US$827.3m) in budget savings or new revenues was needed to hit 2013 fiscal targets. Slovakia’s economy grew 0.7% in the second quarter on a quarterly basis, helped by car exports.
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