NBS: Lower GDP growth still spurs new employment

DESPITE the much lower pace of GDP growth compared to the times before the crisis, employment is growing, analysts with Slovakia’s central bank, the NBS, wrote in their latest commentary published on July 22.

NBS central bankNBS central bank (Source: Jana Liptáková)

The commentary explored the relationship between the employment rate and the actual economic developments in Slovakia.

“We’ve found that this relationship is largely changing over time,” the TASR newswire quoted the document. “The flexibility in the employment rate vis-a-vis the actual economic activity increased during the crisis in 2008-09, and estimates regarding the turnaround point, the pace of economic growth at which the economy adds new jobs, dropped from close to 3 percent to anywhere between 1.2 and 1.8 percent.”

This change may be explained by a long-term shift in the core of the economy from industrial sectors to services, analysts added. This structural shift makes the employment rate more responsive to GDP growth, particularly so if the economic growth is fuelled by domestic demand – as opposed to a situation when it is propelled by foreign demand.

As per figures released in June, Slovakia’s GDP rose by 3.1 percent year-on-year in 1Q15. According to Finance Ministry projections, the year-round GDP growth in 2015 should be 3.2 percent.

Get daily Slovak news directly to your inbox

Theme: Economics

Read more articles by the topic

Top stories

No test, no work. Employees will have to take paid or unpaid leave

Those who will be quarantined with a positive test result will be entitled to pandemic sick leave.

Illustrative stock photo

He wore his mask with his nose uncovered. Kotleba is COVID-19 positive

Three more MPs have reportedly tested positive so far.

Marian Kotleba in parliament with his mask under his nose

Curfew and closed schools. Slovakia goes into a mild lockdown this weekend

Nationwide testing will follow, accompanied by another curfew.

Nationwide testing - an ambitious plan with an uncertain result

Antigen tests to be used work on patients with symptoms.