* Minister forecasts faster growth of 3.6 pct in 2016
* Rising household spending, exports leading
* Car sector remains key driver, to add new plant in 2018
* Slow Brexit talks may have weakening impact on econ
(Adds Brexit impact, details, FinMin comments)
BRATISLAVA, Sept 19 Slovakia will expand faster
than previously expected in 2016, the Finance Ministry said on
Monday, with rising household spending and increasing exports
that should keep the economy among the fastest-growing in the
euro zone in the coming years.
Propelled by a car sector that is ramping up production and
set to add a fourth manufacturing plant in 2018, unemployment
has fallen steadily and wages have grown as the economy outpaces
most euro zone peers, many still coping with the effects of
years of economic crisis.
The ministry, in its updated economic outlook, raised its
gross domestic product growth forecast to 3.6 percent for 2016,
more than twice the euro zone average expected this year and up
from a previous estimate of 3.2 percent.
Household consumption this year is seen at its fastest pace
in eight years, the ministry said.
"The record growth of domestic consumption is definitive
proof the economic crisis is over. It proves a change in
people's minds, they are not afraid to spend, to make financial
commitments," Finance Minister Peter Kazimir told a news
Unemployment should fall to 9.8 percent this year and could
reach new lows in 2017, when the ministry estimates the economy
to grow by 3.5 percent. Growth should accelerate to 3.9 percent
in 2018 and 4.4 percent in 2019.
By then, Jaguar Land Rover will join a list of
three other foreign carmakers that have already set up shop in
the country of 5.4 million, making it the world's highest
per-capita auto producer.
Investments by France's Peugeot, Germany's
Volkswagen and South Korean Kia are an
important addition to growth this year.
Slovakia has braced for some impact from Britain's vote in
June to leave the European Union, which is an indirect drag on
The outlook includes a possible 0.2 percentage point impact
next year. But the ministry's forecasting unit said perceived
slow progress in Brexit talks could be another positive factor.
"Economic reality shows that domestic political
disagreements and possible delays in negotiations between
Britain and the European Commission might postpone the impact of
Brexit on our economy, eventually diluting it," Kazimir said.
The following is a table of the ministry's updated outlook
with previous forecasts from June 21 in brackets.
INDICATOR 2016 2017 2018
GDP (pct, y/y) 3.6 (3.2) 3.5 (3.7) 3.9 (4.1)
AVERAGE HICP (pct, y/y) -0.5(-0.3) 0.9 (1.3) 1.6 (1.8)
UNEMPLOYMENT RATE (pct) 9.8 (9.7) 8.5 (8.7) 7.4 (7.5)
REAL WAGES (pct, y/y) 3.3 (3.4) 2.6 (3.0) 2.7 (2.7)
- GDP - real gross domestic product, real terms
- AVERAGE HICP - EU-norm inflation
- Unemployment rate - Labour Force survey
- Wages - annual average wage, real terms
(Reporting by Tatiana Jancarikova and Mirka Krufova; Editing by
Jason Hovet and Robin Pomeroy)