BRATISLAVA, March 3, (WEBNOVINY) – The growth of Slovak economy slowed down over the last quarter of 2010 to 3.5 percent from 3.8 percent reported for Q3, the Statistics Office of the Slovak Republic stated. This figure confirms the office’s flash estimate from mid-February. Net of seasonal influences the real growth of GDP reached 0.9 percent in quarterly terms. Economic growth for the whole of 2010 improved 4 percent y/y in constant prices.
The main feature of the Slovak economy in 2010 was a slowdown of the GDP growth dynamics. This is confirmed by y/y increases in GDP that gradually came down in individual quarters, the Statistics Office explained. GDP growth in Q1 reached 4.7 percent and 4.2 percent in Q2. The volume of GDP generated in Q4 reached EUR 17.02 billion in absolute figures. The volume of GDP swelled 4.5 percent y/y in current prices.
GDP generated for the whole of 2010 achieved EUR 65.906 billion. The indicator went up by 4.5 percent in current prices compared to 2009. Economic growth in 2010 was influenced by rising foreign demand, the statistical authority reported. The volume of exports grew 16.4 percent y/y on a 14.9-percent rise in imports.
According to analysts, investments and net exports were the main driving forces in Q4. UniCredit Bank’s Vladimir Zlacky said that the positive growth of households’ consumption (+0.5 percent) was a surprise. Slovenska Sporitelna analyst Maria Valachyova noted that the increase in investment growth to over 10 percent in Q4 was a positive signal as well.
However, Zlacky predicts that the Slovak economy will continue to slow down this year. The latest data on GDP generation in Slovakia hint certain deceleration of economic growth. The analyst expects that the growth will slow down to 3.1 percent particularly due to the Cabinet’s austerity measures and the impact of higher prices of energy and foodstuffs on income of households. Valachyova offered a more optimistic forecast at 4 percent. Growth rate in the euro zone and the impact of fiscal consolidation remain the main uncertainties, according to her.
Local demand came up by 2.4 percent. This is attributable to improvement of all its items except for the final consumption of households, which dropped 0.3 percent. Final consumption of public administration rose by 0.1 percent, final consumption of non-profit institutions serving households surged 2.3 percent and the formation of gross capital flared up by 12.9 percent. Formation of gross fixed capital bolstered 3.6 percent.
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. The Financial Policy Institute predicts that the Slovak economy could return to pre-crisis level already in Q1 2011.
SITA