06. 12. 2017 14:13
Slovakia's gross domestic product (GDP) grew by 3.4 percent in the third quarter of this year , according to updated figures published by the Statistics Office on Tuesday. Household consumption and investments drove the economic growth in this period, according to UniCredit Bank Czech Republic and Slovakia analyst Ľubomír Koršňák. "Domestic demand was bolstered by all components except for government consumption, which was down by 1.4 percent year-on-year. The annual investment growth was driven by a low comparison basis from last year, but it needs to be noted that investments experienced quite a dynamic upward movement also on a quarterly basis," stressed Koršňák. He added that he would not change the GDP growth outlook for this year as a whole, keeping it at 3.4 percent year-on-year. At the same time, he has upped his estimate for 2018 from 3.8 percent to 3.9 percent, mainly due to a better than previously expected improvement in the external environment (mainly the eurozone). GDP growth on the turn of 2018-19 should exceed 4 percent, despite an expected cyclical deceleration of economic growth in Europe. A strong car output, which Koršňák named an 'offer shock' due to the arrival of Jaguar Land Rover in Nitra, should ensure that Slovakia experiences its economic climax somewhat later than the rest of the eurozone, while a cyclical slowdown of domestic demand will already be visible by late next year or early 2019.
Slovenská sporiteľňa bank analyst Katarina Muchová noted that positive developments on the labour market were among the chief factors behind household consumption, as the nominal average salary in the third quarter grew by 5.2 percent year-on-year- the best figure since 2008. It reached €935 per month. A lower rise in consumer prices influenced the development of the real salary, which increased by 3.6 percent. Muchová expects Slovakia's GDP growth to stand at 3.3 percent at the end of this year, due to be driven mainly households' demand. "A slump in public investments was only partly offset by private investments. However, a reoccurrence of the positive contribution of investments towards GDP growth is expected this year, due to the gradual drawing of new EU funds. The outlook is also relatively favourable for private investments due to be supported by the good economic situation. Meanwhile, the contribution of foreign trade to the economy's growth should be rather dampened," added Muchová.