We expect Slovakia to continue to converge with Western European policies and standards of living over the next ten years as the small economy has benefitted greatly from inclusion in the bloc. However, we stress that the country will face a number of challenges to political stability including corruption, relations with the eurozone, ethnic ten- sions and population decline. ...Ethnic Hungarians and Roma constitute the largest minorities in the country, accounting for -.- and -.- of the total population, respectively. The treatment of ethnic Hungar- ians in Slovakia and Hungary s oftentimes contentious policies towards ethnic Hungarians outside its borders (the government passed a law allowing ethnic Hungarians living abroad to apply for dual citizenship) means that relations between the neighbour- ing countries could deteriorate going forward. The so-called Roma issue persists as a key complaint by international rights organisations against Slovakia. Amnesty International continues to highlight that discrimination against Roma continues on a number of levels ranging from education and housing to enforced sterilisation. With the Roma people underrepresented in government, it continues to fall on inter- -- Business Monitor International Ltd www slovakia Q- ---- compares Favourably to eurozone aggregate
...Previously driven by net exports, real GDP growth in Slovakia will become increasingly weighted towards domestic demand in ---- and beyond. We forecast real GDP growth of -.- and -.- in ---- and ---- respectively. ...Indeed, we believe that weak eurozone economic growth and lingering deflationary risks will spur the European Central Bank into loosen monetary policy further. taBle: BMi eurozone currency forecast -- regional Monetary policy -- ecB Holds Fire For now, But Qe May Be on the Way - Business Monitor International Ltd www contents The European Central Bank (ECB) continues to toe a cautious line and left its policy instruments unchanged at the April - monetary policy meeting. However, a noticeably more dovish tone from ECB President Mario Draghi and indications that some form of quantitative easing is a possibility, suggest that the central bank is paving the way for fresh monetary stimulus. ...Nevertheless, we expect real GDP to average -.- over our ---year forecast period, well above eurozone averages. -- taBle: lonG-terM MacroeconoMic forecasts -- chapter -: Business environment -- sWot analysis -- BMi Business environment risk ratings -- Business environment outlook -- institutions --
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