Slovakia: GDP records slowest increase in a year in Q2
GDP reading: According to a preliminary estimate, the Slovak economy lost steam in the second quarter, expanding 1.9% year on year and marking the softest reading since Q2 2023. The result came in below Q1’s 2.7% rise and surprised markets on the downside. On a seasonally adjusted quarter-on-quarter basis, economic growth slowed to 0.2% in Q2, following the previous period’s 0.7% expansion and marking the worst reading since Q1 2023.
Drivers: According to the statistical office, private consumption and public spending remained supportive of growth; the former was likely buoyed by improving consumer sentiment, a lower unemployment rate and receding price pressures in the quarter. On the production side, industrial output rebounded in Q2 on the back of surging energy sector output and softer contractions in manufacturing and mining.
A complete breakdown will be released on 5 September.
GDP outlook: Our panelists expect the economy to lose steam in H2 compared to H1, expanding at a similar annual rate to Q2 in the second half of 2024. Overall in 2024, economic growth will rise from the prior year as rebounds in exports plus private and public spending outweigh plummeting fixed investment growth.
Panelist insight: Erste Bank’s Matej Hornak commented:
“A rebound in household consumption, supported by a strong labor market and wage growth, accompanied by investment activity induced by NextGen funds, could be the most important factors for economic growth this year. A visible rebound in foreign trade will come hand in hand with rising activity in the big foreign economies, especially Germany, which we expect at the end of this year.”