Slovakia: GDP grows at softer-than-expected pace in Q3
A second national accounts release revealed the Slovak economy expanded at a slower rate than initially estimated in the third quarter, with GDP growing 1.1% year on year. The result was a deterioration from both the 1.5% expansion tallied in the second quarter and from the preliminary estimate of a 2.0% increase. On a seasonally adjusted quarter-on-quarter basis, economic growth waned to 0.2% in Q3, following the previous period’s 0.4% increase.
Household spending dropped at a slower pace of 1.8% year-on-year in Q3 from a 3.6% contraction in Q2. Public spending, meanwhile, rebounded, growing 2.9% in Q3 (Q2: -2.2% yoy). That said, fixed investment growth fell to 2.8% in Q3 (Q2: +12.4% yoy), marking the weakest reading since Q2 2022.
On the external front, exports of goods and services rebounded, growing 0.1% year on year in the third quarter (Q2: -0.8% yoy). In addition, imports of goods and services slid at a milder rate of 4.0% in Q3 (Q2: -8.0% yoy). Both results marked the best readings since Q4 2022. Overall, net trade grew in Q3.
Domestic demand likely benefited from lower average inflation in Q3, which fell to the lowest since Q4 2021. However, higher interest rates and slower nominal wage growth capped the overall improvement in private spending. Our Consensus is for the economy to post a stronger year-on-year expansion in Q4, but tally only a moderate increase in 2023 as a whole.