Smer dominates as economy rebounds
Overview:
Robert Fico's Smer party continues to dominate the opinion polls as parliamentary elections approach in June. Most likely the current rightist/nationalist coalition with the HZDS and SNS will be reformed. The government’s popularity is being helped by signs of a robust economic rebound. While Slovakia was not spared from an economic contraction last year it is expected to be one of the countries in the region best placed to make a strong recovery given its strong export base. Latest data readings confirm this with industrial production and exports growing. The current account deficit has been reduced significantly and inflation is low. Near-term, the key policy challenge is to reduce the fiscal deficit to more sustainable levels. Labour market flexibility is important in maintaining competitiveness within the Euro area.