Slovakia: GDP growth loses steam in Q2
September 6, 2022
GDP growth waned to 1.8% year on year in the second quarter, from 3.1% in the first quarter.
Private consumption increased 4.3% in the second quarter, which was below the first quarter's 9.1% expansion. Public spending contracted sharply, by 7.2% (Q1: -0.4% yoy). Fixed investment growth slowed to 0.4% in Q2, from the 6.4% growth logged in the previous quarter.
On the external front, exports of goods and services fell 0.3% on an annual basis in the second quarter, which was above the first quarter's 4.5% contraction. In addition, imports of goods and services flatlined in Q2 (Q1: -1.3% yoy).
On a seasonally-adjusted quarter-on-quarter basis, economic growth rose from 0.4% in Q1 to 0.5% in Q2. Q2's reading marked the strongest increase since Q2 2021.
Commenting on the outlook, analysts at Erste Bank painted a somewhat downbeat picture:
“After two relatively strong quarters, we expect GDP growth to land slightly below 2%, driven by domestic demand and negatively affected by foreign trade. However, the higher inflation rate will affect real household consumption because of lowered real wages and savings, while the ubiquitous uncertainty will have a dampening effect on the purchase and investment decisions of businesses and households. Persistent supply-chain problems are expected to have a negative impact on foreign trade. Given the current economic conditions and difficult situation in the energy market, economic activity may be the most adversely affected at the turn of the year.”