Slovakia: GDP growth slows in Q2
Flash GDP data shows that year-on-year growth almost halved in Q2, coming in at 1.7%, compared to the 3.1% increase in Q1. The slowdown was due to deteriorating performances in industry, with the automotive sector particularly affected by rising energy prices and input shortages. As such, the final GDP breakdown due in September is likely to show a deterioration in exports. More positively, consumer demand remained strong in Q2, contrasting the slowdown in retail sales growth amid surging inflation experienced over the same period. Lastly, foreign demand declined less than in Q1.
On a seasonally-adjusted quarter-on-quarter basis, economic growth remained unchanged at 0.4% in Q2, marking the fourth consecutive period of stable growth.
Commenting on the key GDP drivers, analysts at the EIU painted a somewhat downbeat picture:
“Key automotive components such as semiconductors, magnesium and steel are subject to disruption due to the war in Ukraine and the continued implementation of strict coronavirus lockdowns in China. In addition, other industries in Slovakia, such as metallurgical plants, will continue to be forced to scale down production or cease activities in the coming months as energy prices remain high, weakening industrial activity. This will significantly weaken Slovakia’s export-based-economy (exports account for nearly 90% of GDP) […]”