BRATISLAVA, November 15, (WEBNOVINY) — The year-on-year growth pace of the Slovak economy is modestly decelerating. Based on the flash estimate of the Statistics Office of the Slovak Republic, GDP in Slovakia grew 2.9 percent in Q3 compared to 3.5 percent in Q2. The economic activity keeps expanding at a relatively solid pace in quarterly terms, going up by an identical 0.8 percent in the previous three quarters and by 0.7 percent in Q3 versus Q2.
Analysts see particularly foreign demand behind the figures for the third quarter. Slovenska sporitelna analyst Maria Valachyova attributed the slight deceleration of the Slovak economy to the slowdown of the country’s business partners in Europe. The ongoing decline in retail sales indicates that Slovaks are prudent regarding spending and thus, the economic growth lacks the support of local demand, according to ING Bank analyst Eduard Hagara.
Eva Sadovska, an analyst with Postova Banka, noted that it was chiefly industry that pulled the Slovak economy in the third quarter. Growth of industrial production slowed down but the sector continues growing and this is positively reflected in GDP. September’s industrial output that bolstered over 7 percent y/y was a pleasant surprise for the market, she added. Investments might have supported the growth in the observed period, too.
UniCredit Bank’s Vladimir Zlacky also sees net exports and to a certain extent also investments behind the economic growth. The analyst forecasts that the GDP growth in the eurozone, which absorbs some fifty percent of Slovakia’s exports, will further come down in the last quarter of this year. That is why he prognosticates stagnation of the local economy on a quarterly basis and 2-percent growth in annualized terms.
Net of seasonal influences, GDP increased 3.2 percent in Q3. GDP growth in current prices mounted 4.4 percent to EUR 18.251 billion. The Statistics Office will release updated figures for Q3 on December 6, 2011.
Based on the flash estimate, GDP growth in Q3 was slower than bank analysts expected. They prognosticated 3 percent growth in the latest poll by the National Bank of Slovakia, and 3.1 percent for the whole of 2011. Several banks have revised their forecasts due to deepening debt crisis in Europe and turbulent global markets, expecting a significant slowdown in 2012.
SITA