Institute Drops GDP Forecast to 3%

Photo: Reuters/Scanpix
7/5/2013 1:31 PM
Category: Economy

In its Q2 report, the Institute of Economic Research downgraded its annual GDP forecast from 3.6 to 3 percent.

Introduced yesterday, the quarterly report said economic climate remains above satisfactory. Experts were moderately optimistic about the second half of the year.

Most forecasters decreased predictions for this year's economic growth after poor Q1 results, with the OECD dropping its forecast from 3.7 to 1.5 percent.

Still, economists expect exports to continue growing, inflation to decline and share prices to rise. Interest rates should remain at the current, relatively low level.

The business confidence index in June was at 100.5 - lower than a year ago during the same period and lower than in the first quarter, but still above the long-term average.

Rising salaries ensure an increase in consumer spending, improving commerce and services. Business was not as strong for industrial and construction companies.


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