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Economy grew slightly in 2Q 2013

THE SECOND quarter of 2013 saw Slovakia’s GDP up by 0.9 percent in the year-on-year comparison, according to the data released by the Statistics Office on September 4.

THE SECOND quarter of 2013 saw Slovakia’s GDP up by 0.9 percent in the year-on-year comparison, according to the data released by the Statistics Office on September 4.

GDP grew by 0.3 percentage points compared to the first quarter of this year, the SITA newswire reported.

At current prices, the economy in the first quarter increased 2.4 percent year-on-year, while the generated GDP was €18.255 billion. For the first half of this year, Slovakia’s GDP reached €35.066 billion. At current prices, this meant annual growth of 2 percent. At constant prices, the economy grew by 0.8 percent, representing a slowdown compared to last year by 1.9 percentage points, SITA wrote.

GDP growth was driven by external demand, while domestic demand continued to drop in the second quarter of 2013, according to SITA.

Exports of goods and services increased by 4.7 percent, and growth in the import of goods and services rose 1.3 percent. Domestic demand fell by 3.3 percent due to a reduction in a majority of expenditure components, SITA wrote.

Household consumption grew in the year-on-year comparison by 1.5 percent, for the first time since the third quarter in 2009.

Government consumption dropped in the second quarter of 2013 by 0.1 percent.

“Given the unstable situation, as well as the increased tax burden, Slovak companies are probably putting off their investments and trying to optimise their inventories,” an economic analyst with UniCredit Bank, Ľubomír Koršňák, said.

A long-term drop in investments can however lower the competitiveness of the Slovak economy and threaten the growth potential of the country, Koršňák said. He expects further GDP growth in the second half 2013, mainly driven by the expected growth of the eurozone’s bigger economies and faster growth of the German economy. The outlook for GDP is to grow by 1.0 percent in 2013 and by 2.5 percent in 2014.

“The structure of the growth is however going to change only slowly – the GDP growth will continue to be driven almost exclusively by net exports,” Koršňák said.

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