UnitedLife 05

…so what are our prospects?

ako-bude-domaunited-life

Peter Bobik
Consultant
Bratislava, Slovakia

Home is where the heart is…and it hasn’t looked this well for some time. This year will exceed all expectations. Why is that? Allow me to ponder for a while and share my conclusions with you. I will analyze my reasons for labeling future growth prospects of Slovak economy as conservative as well as I will explain why I see much greener numbers. I am presenting the optimistic point of view. Since pessimists have unlimited options to express themselves, I will not walk on that side of the road. Those predicting a sinister future find huge success in their audience, as if we all craved the negative. This insight will be different.

Peter Bobik for United Life 05

 

lovak economy will fully reap the benefit of being in the Eurozone in the coming year. Tendencies for the euro to parity with the dollar have doubtlessly huge advantages for an export-oriented economy, even if only indirect ones. German booming exports will contribute to our GDP in terms of exports considerably even though this effect is achieved indirectly. Suppliers as well as manufacturers will create more jobs. Car manufacturers won’t be the only ones able to produce millions of units and breaking record sales numbers. All this will cause a drop in unemployment which has been decreasing slowly for some time. This year we can expect to see even brighter numbers and a developing trend. This inevitably leads to more consumer spending and therefore a financial benefit for us all.

Our finances in general should also do better compared with past years. A drop in interest rates brings along a considerable amount of capital. Mortgage rates that went down noticeably mark a trend that is likely to continue for a while. Both imply a staggering increase in household consumption reaching 300 million euros in total. Decreasing interest rates for consumer debt will have a similar effect although with a weaker impact. Let us not forget the consequences of falling fuel prices due to declining oil prices.

Their effect would be multiplied across a wide spectrum of more than half a billion people. Any business spending on transportation will be able to cut its costs which will be mirrored in the price levels of goods and services. Similarly, it can contribute to higher profits which in turn create even more employment opportunities or offer financial benefits for existing employees. I do more than hope that this will go on for some time. Additionally, we can see a trend towards falling energy prices. Lower energy bills again reflect positively in household consumption. At the same time we count with an increase in current wages. Short-term deflation should not reveal itself as devastating.

All these factors combined will hopefully lure an elusive mood that has been hiding undercover for years although it is so favorable for the entire economy – the so called positive sentiment. Negative consumer sentiment usually attracts an imminent fall and the same applies vice versa. Which came first – desire to spend or a quicker economic growth? It is yet another Columbus‘ egg. There is no point in discussing any further because the conclusion cannot be interpreted else than to our advantage. Positive sentiment can make our economy soar. We will be buying, lending and producing more which means more published books, films, theater plays and better times to follow. Home will be where the heart is and it will be wealthier.

 

Peter Bobik



READ MORE
READ MORE
SCIENCE & TECHNOLOGY

    UnitedLife 09 (S/S 2016)

Robotic farmers

8. May 2017
READ MORE
READ MORE
READ MORE
HEALTH

    UnitedLife 08 (A/W 2016)

Everything about moles

16. November 2016
READ MORE