Slovakia GDP Q4 2020

Slovakia

Slovakia: GDP contracts at faster pace in Q4

March 5, 2021

A second GDP release confirmed that the economy contracted 2.7% on an annual basis in Q4, matching the preliminary release and decreasing at a quicker pace than last quarter (Q3: -2.4% yoy). For the year as a whole, the economy shrank 5.2%, contrasting the 2.3% expansion logged in 2019.

The fourth quarter’s faster annual fall largely reflected a swing to decline in private consumption. Household spending fell 2.1% in annual terms in the fourth quarter, contrasting Q3’s 1.0% rise. Moreover, fixed investment fell 16.3% in annual terms (Q3: -10.8% yoy), marking the sharpest decline since Q4 2016 and the fourth successive quarter of contraction. Meanwhile, public spending ticked up 0.2% on an annual basis in Q4, rebounding from Q3’s 0.2% decrease.

On the external front, exports of goods and services slightly accelerated in Q4, rising 0.4% in annual terms (Q3: +0.2% yoy), while imports of goods and services decreased at a slower rate of 0.9% (Q3: -6.5% yoy).

On a seasonally-adjusted quarter-on-quarter basis, economic activity slowed considerably in Q4, expanding 0.2%, following the 11.7% surge posted in the prior quarter.

GDP is seen bouncing back from 2020’s dive and growing solidly in 2021 on the back of gradually firming foreign demand, which should bolster the crucial automotive industry, and recovering consumer and capital spending. However, still-surging Covid-19 cases nationally, coupled with a slower-than-expected vaccine rollout, cloud the outlook.

Our panel sees GDP growing 4.7% in 2021, which is down 0.1 percentage points from last month’s forecast. For 2022, the panel projects GDP to expand 4.3%.


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Slovakia GDP Q4  20 20 1

Note: Year-on-year changes of GDP in %.
Source: Statistical Office of the Slovak Republic (SOSR) and FocusEconomics Consensus Forecast.


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