The projected slowdown in Slovakia's economic growth should not have a negative impact on the labour market, analysts believe. According to Ľubomir Koršňák, analyst of UniCredit Bank, the Slovak and Czech labour markets usually respond to the change of economy with a slight delay, most often in the range of one to two quarters. "However, some economies also show a faster, almost immediate transfer of the economic conditions onto the labour market. These include Poland, Latvia and Spain. On the contrary, in Croatia, Luxembourg and Switzerland the reaction is delayed by up to three quarters of a year," stated Koršňák.
He also pointed out that for quite a long time, the 3% growth in the economy was considered the limit for employment growth in Slovakia. Between 2000 and 2008, this threshold was 2.3% . At the moment, even a more moderate economic growth could keep employment unchanged, with a GDP growth of 0.5 percent in the case of Slovakia and 0.2 percent in the case of the Czech Republic. According to Slovenská Sporiteľňa analyst Katarína Muchová, Slovakia's Gross Domestic Product growth is expected to slow down to probably close at 2.5% this year.
Muchová also noted that the economic growth is currently slowing down not only in Slovakia but in the Eurozone, too. "In a sense it's natural after the peak of the cycle, but at the same time there is a combination of several negative risks that overshadow the outlook," said Muchová. According to her, domestic demand remains in good shape and any risks stem from developments in other countries. "The final form of Brexit is still unknown, there's also the possibility of slower growth in Germany, the Eurozone and China, the unresolved foreign trade disputes and the threat of protectionism as well as the gradual structural changes in the automotive sector," said Muchová, adding that the situation on the Slovak labour market should remain favourable this year.
