Macroeconomic Forecast Slovakia

German PMI readings - which historically hold strong correlation with Slovakia's industrial production (IP) index - register a slight slowing in the deterioration in the index in December, posting a modest 0.4% increase to 48.1; the first increase since April 2011. Slovakia's IP readings have also perked up their growth rate, growing by 7.8% y-o-y, up from 5.0% y-o-y in July. Despite these modestly positive indicator readings, trade confidence and consumer confidence both experienced sharp downturns in November, and we hold to our expectations of slowing economic growth in 2012, in line with our view for a mild eurozone recession.

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