Slovakia: GDP growth records best result in one year in Q2
According to a preliminary estimate, GDP growth improved to 1.5% year on year in the second quarter from 1.0% in the first quarter. Q2’s reading marked the strongest increase since Q1 2022. According to the press release, the economy was no longer supported by private consumption. Instead, corporate investments and a foreign trade surplus boosted activity.
On a seasonally adjusted quarter-on-quarter basis, economic growth sped up to 0.5% in Q2, from the previous quarter’s 0.3% expansion. Q2’s reading marked the strongest since Q3 2021.
Year-on-year GDP growth is set to lose some speed in Q3 as strong price pressures and higher interest rates continue to weigh on activity. Moreover, the downturns of key trading partners like Germany and slower global growth will dent exports. That said, improvements in supply chains and stronger net exports are likely boosting industry.
On the outlook, Marian Kocis, analyst at Erste Group, commented:
“After two quarters of economic growth, the possibility of a (technical) recession this year seems very unlikely due to an expected fiscal stimulus of EUR 5 billion from EU funds (approximately 5% of GDP). The determining factor will be the country’s ability to efficiently and quickly absorb these resources.”