Slovakia's GDP growth was again driven mainly by automotive production in the second quarter of this year, said UniCredit Bank analyst Lubomir Korsnak in his commentary on the GDP figures released by the Statistics Office Tuesday. The Statistics Office reported that Slovakia's GDP in the second quarter of 2023 increased by 1.5 percent year-on-year (in fixed prices, not seasonally adjusted). The volume of GDP in current prices increased by 11.3 percent in yearly terms, reaching €30.3 billion. Seasonally adjusted, the country's GDP grew by 0.4 percent quarter-on-quarter.
"A look at GDP from the supply side confirms that the surprisingly strong GDP figures in Slovakia in the second quarter (when compared to the rest of the region and Europe) were mainly driven by Slovak automotive plants. These benefited from an easing of bottlenecks and still unsatisfied domestic (European) demand that had accumulated in previous years - during the pandemic and the semiconductor crisis," specified Korsnak.
However, he said that the prospects for the external environment into the second half of the year are increasingly worrying, mainly due to the weak figures for the German economy, which has been a key business partner of Slovakia's industry for a long time. Another concern is the deteriorating mood in the Slovak and European economy, which has its roots in industry. Scepticism is increasingly spreading to the service sector as well. "We expect only a moderate acceleration in GDP growth to 1.6 percent next year. However, the outcome of the general election could have a significant impact on growth next year, as it will determine the extent and method employed for a necessary consolidation of public finances," added Korsnak.
Slovenska Sporitelna analyst Matej Hornak expects household consumption to dampen in the second half of this year due to higher inflation, a drop in real salaries and more savings. "We also expect more significant positive contributions to GDP growth from investments, which, however, will depend on a continued ability to absorb EU funds from the old programme period. GDP growth for the whole of this year might thus reach 1.5 percent. In addition to EU funds, further developments in foreign economies and global demand will play a more significant role in the second half of this year," added Hornak.
(TASR)
