BRATISLAVA, June 9, (WEBNOVINY) — The local economy continues to stand in the way of faster growth of the economy of Slovakia. Local components contributed mostly negatively to formation of the gross domestic product in the first quarter of this year. This applies also to q/q development, in which, as an analysis by the National Bank of Slovakia shows, paradoxically only the final consumption of the general government contributed positive results, 0.9 percent higher than in the last quarter of 2010. The final consumption of households decreased by 0.1 percent, while formation of gross fixed capital dropped 1.8 percent. On the whole, the Slovak economy in the first quarter grew 1 percent after adjustment to seasonal influences, while real y/y growth rate reached 3.5 percent.
The consumption of general government grew in quarterly terms in spite of a y/y decline in expenditures for goods and services. The number of employees in the sector decreased, too, which did not reflect in overall wage compensation. The growth of wage costs within the final consumption of the general government was probably influenced by severance pay or layoffs of employees with lower wages, the central bank’s monetary department comments. Investments by the general government moderately increased.
Investment in the economy did not reach the level of last year’s last quarter in spite of continuing growth of industrial output and profitability of firms. Considering individual sectors, the construction business affected the development, as it has been recovering from the crisis the longest. “It can be seen in the decline of investments in all types of buildings, including residential buildings, which were the only ones to preserve growth during the crisis, too,” the central banks states.
The consumption of homes remains negatively affected by the only gradually improving situation on the labor market. Household consumption changed neither in yearly terms nor in quarterly terms, in spite of growing income, employment, and savings.
Foreign trade remains the main driving force of the Slovak economy. Exports grew 15.8 percent y/y in the first quarter, while imports swelled 11.3 percent y/y. In quarterly terms, exports grew 5.6 percent and imports 2.3 percent. This component is influenced by the weak output of the local economy, too. „Import lagged moderately behind export, as the local part of the economy has still been developing negatively,” the central bank adds.
SITA
