Slovakia's economy will decelerate and growth will be 1.7 percent in 2012, according to an updated forecast of the Finance Ministry released on Friday.
The ministry has slashed its estimate from September by nearly two percentage points as a loss in budget income of some 480 million euros is now expected. Specific numbers will be known next week when the ministry releases a new prognosis concerning tax revenues.
"Turmoil on financial markets and the resulting uncertainty is worsening the economic outlook of the eurozone, including Germany," according to the ministry's Financial Policy Institute (IFP).
Since Germany is Slovakia's largest trading partner, the IFP analysts say the ramifications for Slovakia are obvious.
Any negative developments in foreign demand for Slovak products will translate into a slowdown in the growth of exports, investments and employment. However, the launch of new production in the carmaker and electronic industries will partly offset the slowdown.