Boston, MA -- (SBWIRE) -- 02/03/2015 -- Core Views

- Prime Minister Robert Fico's failed bid for the presidency in March 2014 is a sign of growing voter wariness of single-party rule and mainstream political parties, while recent corruption scandals have reinforced this trend. General elections in 2016 are unlikely to give the ruling party another outright parliamentary majority, but the fragmented nature of the opposition suggests it will remain the dominant political force for some time.

- Although Slovakia has been released from the European Commission's Excessive Deficit Procedure, the government will have to maintain a relatively tight fiscal stance in light of looming constitutional debt brakes. However, we believe Slovakia is on a sustainable fiscal trajectory with few risks to its solid sovereign credit profile.

- The short-term economic outlook has brightened as export growth led growth of the previous years has translated to a visible pick-up in domestic demand. We expect domestic demand growth to remain robust, driving growth in the coming years.

- The current account will remain in surplus over the medium term, boosted by falling oil prices, even as economic growth becomes increasingly weighted towards domestic demand.

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Major Forecast Changes

- No major forecast changes

Risks To Outlook

- The risks to our short-term growth forecast are weighted to the downside, and largely based on ongoing uncertainty over the regional economy. Slovakia's economy is vulnerable to any shifts in external demand, and a deceleration in the German economy or escalation of the Ukrainian crisis could weigh on the short-term outlook.

- The emphasis on one-off and revenue-boosting measures to achieve significant fiscal consolidation in previous years leaves the deficit reduction programme vulnerable to weaker-than-expected growth while also threatening investment inflows.

The Slovakia Country Risk Report helps businesses with market assessment, strategic planning and decision making to promote growth and profitability in Slovakia. It is an essential tool for CEOs, Chairmen, Finance Directors/CFOs, Managing Directors, Marketing/Sales Directors with commercial interests in this emerging market.

An influential new analysis of Slovakia's economic, political and financial prospects through end-2019, just published by award-winning forecasters, Business Monitor International (BMI).

Key Uses

- Forecast the pace and stability of Slovakia's economic and industry growth through end-2019.

- Identify and evaluate adverse political and economic trends, to facilitate risk mitigation.

- Assess the critical shortcomings of the operating environment that pose hidden barriers and costs to corporate profitability.

- Contextualise Slovakia's country risks against regional peers using BMI's country comparative Risk Index system.

- Evaluate external threats to doing business in Slovakia, including currency volatility, the commodity price boom and protectionist policies.

The Slovakia Country Risk Report by Business Monitor International (BMI) includes four major sections: Economic Outlook, Political Outlook, Operational Risk and Key Sector Outlook.

Economic Outlook:

How will the Slovakia' economic policy-making and performance impact on corporate profitability over 2015-2019?

BMI provides our fully independent 5-year forecasts for Slovakia through end-2019 for more than 50 economic and key industry indicators. We evaluate growth, and also forecast the impact of economic management.

Economic Outlook Contents

The Slovakia Country Risk Report features BMI's forecasts with supporting analysis for 2015 through to end-2019, set against government views and BMI's evaluation of global and regional prospects.

Key Areas Covered:

Data:

- Full 10-year forecasts with data - for key macroeconomic variables including GDP (real growth and per capita), population, inflation, current account balance and the exchange rate.

- BMI's comprehensive Risk Index system - rates each country worldwide for economic and political risk, and rates the business environment, within a global and regional context.

Written Analysis:

- Economic Activity - real GDP growth, employment, inflation, consumption (retail sales and confidence).

- Balance of Payments - trade and investment, current and capital account.

- Monetary Policy - interest rate trends (bank lending and deposit rates) and inflation (producer price and consumer price).

- Exchange Rate Policy - currency controls, foreign investment flows, exchange rates and foreign exchange reserves.

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