Changes in the forecasts since the previous version:
The fiscal deficit for 2012 might surpass the originally planned level at 4.6% of GDP and reach up to 5% of GDP, which is suggested by the cash data of government budget. Thus, the accrual fiscal deficit might reach a similar level than in 2011 (4.9% GDP). Apart from that, public debt is likely to surpass 50% of GDP, partly due to the ESM contribution as well as bigger- than-usual pre-financing for 2013.
Slovak government bond yields are still trading near record low levels of around 2.2% for 2020 maturities, having dropped amid a widespread rally in CEE government paper. However, we have seen a moderate rise in the recent weeks which is likely to continue. We expect the yields to rise slightly in the near term, possibly reaching 2.70% by the end of the year.