The National Bank of Slovakia (NBS) revised downward its latest estimate of inflation growth for the next three years. In its latest prediction of macroeconomic development it lowered the expected year-end harmonized inflation rate from 1.5 percent to 1.3 percent for 2007. It decreased its estimate of the average inflation rate from 1.6 percent to 1.5 percent. Next year the average inflation rate measured by the harmonized consumer price index should oscillate around 1.9 percent and should be 2.2 percent in 2009.
The NBS also improved its estimate of gross domestic product (GDP) growth when compared with its January prognosis. It increased its estimate of GDP growth by 0.3 percentage points to 8.9 percent for 2007. Next year, real GDP growth should reach 7.4 percent, while the previous prediction forecast 1.2 percentage point lower GPD growth. In 2009 the central bank expects the GDP to grow 6.9 percent. However, dynamic growth of GDP should not have a pro-inflation effect, since potential, i.e. non-inflation growth of the economy, has increased, stated the NBS.
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