Slovakia: Domestic demand drags on growth in Q3
December 6, 2016
In the third quarter, GDP grew 3.0% over the same period last year, according to official data released by the Statistical Office of the Slovak Republic (SOSR) on 6 December. The print matched the preliminary estimate, undershot the 3.8% expansion recorded in Q2 and marked the weakest growth in nearly two years.
A sharp drop in fixed investment (Q3: -17.0% year-on-year; Q2: -1.1% yoy) led Q3’s deterioration. Fixed investment declined at the fastest pace in nearly eight years due to reduced absorption of European Union funds. Despite decelerating, private consumption grew a strong 2.5% annually in Q3 (Q2: +3.1% yoy) partially due to healthy dynamics in the job market. Government spending expanded 2.1% in Q3 (Q2: +2.5% yoy).
On the external front, growth in exports decelerated to 4.5% in Q3 (Q2: +7.8% yoy), while imports rose a mild 0.8% (Q2: +5.9% yoy). As a result, the external sector’s net contribution to overall economic growth improved from 2.2 percentage points in Q2 to plus 3.3 percentage points in Q3.
On a sequential basis, the economy grew a seasonally-adjusted 0.7% in Q3, which was below Q2’s 1.0%.
Author: Luis Lopez Vivas, Economist