Analyst: Robust Household Consumption Boosted Slovak GDP in 2Q17

(Stock photo by TASR/AP)

Bratislava, September 5 (TASR) – Slovakia’s economy was boosted in the second quarter of 2017 mainly by household consumption, with the contribution of exports dropping also due to stagnation in the car sector, said UniCredit Bank Czech Republic and Slovakia analyst Lubomir Korsnak on Tuesday.

As suggested earlier by figures from retail, which posted the most robust growth since 2008, growth in household consumption continued to accelerate (up by 3.6 percent year-on-year), also recording the highest pace of growth since 2008.

Meanwhile, household consumption was driven mainly by the strong labour market, involving growth in both employment and salaries.

Korsnak expects that Slovakia’s GDP for 2017 could increase by 3.4 percent y-o-y, while he conceded that this figure could be corrected upwards. At the same time, Slovakia’s GDP growth should accelerate from 3.2 percent y-o-y in the first half of 2017 to 3.6 percent in the second half and 4 percent next year. This should take place on the back of strong household consumption and a continuing cyclical revival in European economies, a fact that should have positive effects on Slovak exports, including the car industry, said Korsnak.

“Exports should recover gradually, partly also due to an expected restart of the automotive industry following the launch of the production of new model generations and new models – not only at the new Jaguar Land Rover plant – at the turn of this year and next and [in 2018],” added the analyst.

Slovakia’s gross domestic product (GDP) in fixed prices rose by 3.3 percent year-on-year in 2Q17, according to updated figures published by the Statistics Office earlier in the day.

In a quarterly comparison, GDP grew by 0.8 percent over the April-June period.
GDP in current prices grew by 4.1 percent to €21.066 billion. It was chiefly driven by domestic demand, which went up by 2.3 percent y-o-y.