BRATISLAVA, February 15, (WEBNOVINY) – Growth dynamics of the Slovak economy slowed down in Q4 2010 again as expected. Based on a flash estimate of the Statistics Office of the Slovak Republic, real year-over-year GDP growth reached 3.5 percent in Q4 2010, compared with 3.8 percent posted in the previous quarter.
GDP generated in the last quarter of 2010 reached EUR 17.019 billion, which translated into a 4.5-percent growth in current prices. Net of seasonal influences GDP in constant prices accounted for EUR 12.615 billion, up 3.4 percent from Q4 2009. Regarding the whole of 2010, GDP in constant prices increased 4 percent and 4.5 percent in current prices.
The figures released by the Statistics Office of the Slovak Republic complied with estimates by analysts who predicted a 3.5-percent deceleration of the GDP growth dynamics in the last quarter of 2010. The Statistics Office is going to publish more detailed data on March 3. Economists estimate that the main driving force of economic activities in Slovakia was the foreign demand. Germany, Slovakia’s most important business partner, has been reporting the strongest increases since its reunification in 1990.
Although the Statistics Office will not release the structure of GDP before March, the so-far disclosed data clearly show that the economy still has been driven mainly by export-oriented industry, while consumer demand lags behind and the jobless rate remains high, ING Bank analyst Eduard Hagara remarked. Acceleration of corporate lending at the year’s end hints at potential recovery of investment activities of the local companies, opines UniCredit Bank’s Lubomir Korsnak. “We therefore assume that the formation of fixed investments might resume growth in the fourth quarter. However, it likely stood also behind higher imports which is expected to reduce the contribution of net exports to GDP growth,” he explains.
Banks forecast the same economic growth for 2011 as is the flash estimate of the Statistics Office for 2010, namely 4 percent. Industry is supposed to remain the main driving force and recovery is also anticipated in the automotive and electrotechnical industries. Analyst with Slovenska Sporitelna Maria Valachyova sees risks in the fiscal consolidation impact on consumption and a potential steeper slowdown in the eurozone.
Slovakia has recovered from the shock of economic contraction in 2009 after a single year. In 2009, the country witnessed a record y/y decline in foreign demand that caused steep GDP contraction. Slovakia’s economy jumped over 6 percent in 2008 while in the following year it contracted 4.7 percent. What is more, the Statistics Office reported a GDP downturn in all quarters that year.
SITA