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Analysts: Revival in Slovakia's Economy Caused by Foreign Demand
Friday 04 June 2010 Zoom in | Print page
Bratislava, June 4 (TASR) - The GDP structure of the first three months of 2010, published by the Statistics Office on Friday, indicates that the revival in Slovakia's economy has been caused mainly by foreign demand, with domestic demand still lagging behind.
"Slovakia's growth is still dependent upon the revival of the global economy in a significant way," ING Bank analyst Eduard Hagara told TASR.
The Slovak economy saw favourable developments in the first quarter of 2010, with GDP rising by 4.8 percent year-on-year. "Almost all elements contributed to this growth, with the only exception being gross capital formation, which has gone down by more than 2 percent y-o-y. When it comes to investments, companies are still very cautious," said Postova banka analyst Eva Sadovska.
According to Michal Musak from state-owned insurer Slovenska Sporitelna, the structure of GDP has confirmed individual monthly statistics that indicate improvements in international trade. "Imports have risen by 8 percent y-o-y, while exports have grown by 15 percent due to higher industrial production," said the analyst. Household consumption is still lagging behind, however.
Economists predict that the Slovak economy will continue to grow in the following quarters as well, although at a gradually slower rate. "The second half of this year will be more critical, as the Government's stimuli will slowly fade from the economy," said Hagara.
Improvements in the labour market should go hand-in-hand with domestic consumption. Musak predicts, however, that its contribution to 2010 growth will be low. Investments might see better times, but the analysts don't expect them to make up for the 20-percent drop in 2009. Slovakia's economy is predicted to grow by 3 percent in 2010.
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