Slovakia: GDP contracts at softer pace in Q3
A second estimate confirmed that the economy shrank 2.4% on an annual basis in Q3, matching the preliminary release and softening markedly from the record-breaking 12.1% dive tallied in Q2.
Household spending bounced back in the third quarter, growing 1.0% and swinging from Q2’s 4.2% contraction. Moreover, fixed investment contracted at a milder pace of 10.8% in Q3 compared to the 15.7% decrease in the prior quarter. Similarly, the decline in public spending softened markedly to 0.2% in Q3 (Q2: -10.3% yoy).
On the external front, exports of goods and services returned to growth in Q3 for the first time since Q1 2019, increasing 0.2% year-on-year (Q2: -26.8% yoy). In addition, imports of goods and services fell at a more moderate pace of 6.5% in the quarter (Q2: -27.0% yoy).
On a seasonally-adjusted quarter-on-quarter basis, economic activity rebounded in Q3, with GDP expanding 11.6% and contrasting the 8.3% decrease logged in the prior quarter.
Commenting on Q3’s outturn and the outlook ahead, Tomas Dvorak, assistant economist at Oxford Economics, noted:
“We have raised our 2020 GDP forecast for Slovakia to -5.6%, as the economy in Q3 surprised sharply on the upside […]. Nevertheless, a severe second wave of coronavirus means that output will contract in Q4 and activity should remain subdued in H1 2021 before population immunity is achieved via a general inoculation programme. We expect a strong recovery in H2 2021, with GDP forecast to rise by 4.8% next year.”