Domestic demand strengthens economic growth

SLOVAKIA’s GPD rose by 1.5 percent in the last quarter of 2013, the Statistics Office announced, thus confirming its previous flash estimate from February, the SITA newswire reported.

SLOVAKIA’s GPD rose by 1.5 percent in the last quarter of 2013, the Statistics Office announced, thus confirming its previous flash estimate from February, the SITA newswire reported.

GDP increased 1.1 percentage point faster in the fourth quarter of 2013 than in the same period of 2012. In the quater-on-quarter comparison, Slovakia’s economy grew by 0.4 percent.

The volume of GDP in common prices increased to €18.393 billion, which is an increase by 1.5 percent, SITA reported.

The economic growth for the whole of 2013 thus stood at 0.9 percent, which is slower compared to the previous year, by 0.9 percentage points. In 2013, Slovakia produced GDP in the volume of €72.134 billion.

There was a key change in the structure of the economic growth in the last quarter of 2013, which had been expected, UniCredit Bank’s analyst Ľubomír Koršňák noted.

“In contrast with the previous quarters, domestic demand did not continue to slow down economic growth, for the first time since mid 2011,” Koršňák wrote. On the contrary, domestic demand was among the main factors to secure GDP growth, as it increased in all of its main areas in year-on-year terms: in consumption of households, consumption of the government and in investments.

On the other hand, exports, which were almost the only source of economic growth in the previous quarters, did not really contribute to GDP growth in the last quarter of 2013 (contributing only 0.1 percentage point), according to Koršňák.

Even though foreign demand rose significantly (which showed in the increased growth of exports from 1.9 percent to 6.6 percent year-on-year), domestic demand pushed the growth of imports as well, which then returned to year-on-year growth of 7.2 percent, even outnumbering the growth in exports for the first time since mid 2011.

Source: SITA, UniCredit Bank press memo

Compiled by Michaela Terenzani from press reports.
The Slovak Spectator cannot vouch for the accuracy of the information
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