Slovakia: GDP posts first expansion since Q4 2019 in the first quarter
According to a preliminary estimate, economic activity bounced back in the first quarter, growing 0.3% year-on-year and contrasting the 2.1% contraction recorded in Q4 of last year. Q1’s reading marked the first expansion since Q4 2019, although it was partly flattered by a low base effect.
While a detailed breakdown is not yet available, the upturn likely reflected strengthening industrial activity, particularly in the key automotive industry, as well as firming external demand conditions, as merchandise export growth picked up pace in the quarter.
Meanwhile, on a seasonally-adjusted quarter-on-quarter basis, GDP dropped 1.8% in Q1, contrasting the previous period’s 0.8% expansion. Q1’s reading marked the largest drop since Q2 2020.
More detailed data will be released on 4 June.
Looking at the year as a whole, GDP growth is expected to return, supported by a solid expansion in domestic activity, while firming foreign demand amid the gradual removal of restrictions should support the all-important car industry. However, a slower-than-expected vaccine rollout and disagreements within the governing coalition represent risks to the outlook.