Macroeconomic Forecast Slovakia

Slovak gross external debt reached US$38.2bn at the end of July, on the back of a 19.5% year-to-date increase in government external debt to US$9.2bn. In light of the latest figures, we have revised upward our end-year forecast to US$40.0bn. That said, we maintain our view that in percent of GDP terms, the level of external debt is on a declining trend. Indeed, even taking into account our revised nominal figure, external debt is still forecast to fall to 53.7% of GDP at end-2007, down from 58.4% a year earlier. We expect this trend to continue going forward, with the total external debt stock hitting 46.4% of GDP by the end of our five-year forecast period in 2012.

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