BRATISLAVA, February 11, (WEBNOVINY) – Analysts expect that Slovakia’s economic growth in the fourth quarter of 2010 was slowest of all last year’s quarters. According to the latest prognoses of banks in Q4 2010 Slovak economy grew by 3.5 percent y/y in real figures, slowing down from the third quarter’s 3.8 percent. “Mainly foreign demand should boost economic growth in the last quarter. Economy of Germany, which is our most important foreign partner, is recording its most significant growth since the unification of Germany,” Postova Banka analyst Eva Sadovska told SITA. The Statistics Office is to release its flash estimate of economic growth for the last quarter of last year and all 2010 on Thursday.
VUB Banka had originally expected even slower growth than 3.5 percent for the fourth quarter. However, the positive economic development has improved its expectations. “Apart of strong growth of the industry, also growth of construction production was a surprise when it remained in the black over the entire quarter, ” said VUB Banka analyst Andrej Arady. The analyst said that with positive prognoses, it is necessary to not forget about the strong basis effect, which will be one of the factors causing slower growth dynamics. The decline of economy was already more moderate in the last 2010 quarter.
Slovak economy was thus probably driven by foreign demand also in the last quarter of 2010. Domestic demand continues being weak, foremost due to unfavorable development on the labor market. “Consumer demand is still lagging behind, as the economic growth in Slovakia after the crisis has not yet brought a more significant job creation,” said the ING Bank analyst Eduard Hagara.
If forecasts of the analysts become reality, it would mean a gradual slowdown in economic growth in individual quarters of 2010 from 4.7 percent in Q1, 4.2 percent in Q2 and 3.8 percent in Q3. Anyway, the Slovak economy started growing again after the crisis year of 2009 and in 2010 economic growth is expected to be four percent. In 2011, a slight deceleration is expected, mainly under the influence of the Cabinet’s consolidation measures.
SITA