SLOVAKIA’S economy has contracted by 5.4 percent over the first three months of 2009: the flash estimate of the Slovak Statistics Office has confirmed what the country had already learned from its central bank, the European Commission and market watchers who have predicted that Slovakia’s economy is destined to fall into recession throughout 2009.
The GDP in the first quarter of 2009 reached €14.678 billion, 5.9 percent less, in constant prices, than the same quarter last year, the Statistics Office said.
In its revised GDP estimate released on April 7, the National Bank of Slovakia said that Slovakia’s economy would contract by 2.4 percent over the course of 2009. Its estimate at the end of 2008 had projected growth of 2.1 percent for 2009. The bank attributes its 4.5 percentage-point revision entirely to the global economic downturn.
“After several years of sustained expansion in economic activity, GDP growth is expected to contract by around 2.6 percent in 2009 and to rebound slightly, by some 0.7 percent, in 2010,” wrote the European Commission in its forecast for Slovakia in early May.
Total employment in the first quarter of 2009 fell by 0.4 percent year-on-year with 2,199,900 persons employed. After adjusting for seasonal influences, the Statistics Office said employment was estimated to be 2,227,000, retaining the same level as last year.
A year-on-year drop in the country’s GDP by as much as 5 percent had been expected in the first quarter due to impacts of the natural gas crisis affecting Slovakia at the beginning of the year, according to František Palko, state secretary of the Economy Ministry. The next quarters of 2009 might not have such a negative outcome but the actual results will depend primarily on a revival in foreign demand, said Palko, as quoted by daily Sme.
The data released by the Statistics Office will serve a basis for a new economic prognosis by the finance department of the ministry.
“These are the data we have been waiting for, so we are now wrapping up the update of our macro-prognosis,” Palko said, according to Sme.
Palko said that the ministry would release its new prognosis, incorporating these last data, in June.
The harmonized rate of inflation was 1.4 percent in the fourth month of 2009, down 0.4 percentage points from March, the Statistics Office also reported.
This is historically the second lowest level of the year-on-year inflation rate measured by HICP, according to the statistics authority.