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Slovakia GDP Q4 2021

Slovakia: GDP growth improves slightly in Q4

Growth improved very slightly in the final quarter of last year, with GDP increasing 1.4% on an annual basis according to a preliminary reading (Q3: +1.3% year-on-year). On a seasonally-adjusted quarter-on-quarter basis, economic growth slowed to 0.3% in Q4 from the previous period’s 0.4% expansion.

Although a detailed breakdown is not yet available, the press release suggested that the reading was largely supported by domestic demand. Sectors mentioned as supporting the positive reading included the manufacture of machinery and equipment and a number of subsectors within the transport industry. The press release also stated that growth was “significantly affected” by sharply rising prices at the end of last year.

Erste Bank’s Matej Hornák argued that Q4 trade data points towards a still-imbalanced economic recovery:

“[A] growth breakdown will be released in early March. We expect domestic demand to be a driver of the growth. Despite the worsened pandemic situation, household consumption seems to be a positive contributor, as well as investment activity, as both of them were affected by base effect. As foreign trade figures indicate, [the] contribution of foreign demand is expected to be negative due to the persisting lack of semiconductors in industry, even though the situation softened at the end of the last year. On the other hand, a rebound in domestic demand caused a swift growth of imports.”

Hornák further commented on the outlook for growth this year:

“Economic performance in 2022 might be positively influenced by the expected improving pandemic situation and growing investment activity owing to EU funds and [the] Recovery Plan. On the contrary, supply chain problems (anticipated to significantly soften in the second half of 2022) and rising inflation (a gradual decline from the second quarter expected) pose threats to economic growth.”

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