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Slovakia GDP Q4 2021

Slovakia: Economic growth improves moderately in Q4

A second reading confirmed that GDP growth gained steam to 1.4% year-on-year in the final quarter of 2021, from 1.3% in the third quarter, marking the weakest Q4 growth figure in the Euro area. The reading meant that, overall, the economy grew 3.0% in 2021—which was also the weakest growth figure in the Euro area for that period. Thus, the economy still remained 1.5% below its pre-pandemic levels at the end of last year.

The upturn reflected improvements in private consumption, public spending, fixed investment and exports. Household spending growth sped up to 2.8% year-on-year in Q4 from a 2.5% expansion in Q3. Government spending bounced back, growing 2.1% in Q4 (Q3: -1.0% yoy). Fixed investment also rebounded, growing 6.0% in Q4, contrasting the 1.9% contraction recorded in the prior quarter.

On the external front, exports of goods and services bounced back, growing 1.6% in Q4 (Q3: -3.0% yoy). Conversely, imports of goods and services were stable at 3.5% in Q4 (Q3: +3.5% yoy).

On a seasonally-adjusted quarter-on-quarter basis, economic growth lost some steam, cooling to 0.3% in Q4, compared to the previous quarter’s 0.4% expansion. Q4’s reading marked the worst reading since Q1.

Q4’s growth figure capped a disappointing year overall for the Slovak economy, with GDP growth figures for the quarter and the year as a whole the weakest in the Euro Area. Although domestic demand has helped support the recovery in recent quarters, the external sector has remained weak. In particular, the auto industry remains hampered by ongoing semiconductor shortages. Overall, by the end of last year, the manufacturing sector—which forms over a quarter of the economy—remained 5.5% below its pre-pandemic levels.

Analysts at Erste Bank commented on the outlook ahead:

“[The] current escalated situation in Ukraine combined with imposed sanctions and supply-side tensions are expected to slow the economic recovery following the pandemic crisis, resulting in deceleration of economic growth and rising inflation. However, the final impact remains unclear at this moment.”

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