Bloomberg News

Slovak Economic Growth Slows to 3 Percent Because of Debt Crisis

December 06, 2011

Dec. 6 (Bloomberg) -- Slovakia’s economic growth slowed to 3 percent in the third quarter from 3.5 percent in the previous three-month period as the eastern euro-region member feels the effect of the sovereign debt crisis.

On a quarterly basis, gross domestic product grew 0.8 percent from the second quarter, slowing from a 0.9 percent advance in the previous period, the Slovak Statistical Office said on its website, citing final data. The annual result exceeds a 2.9 percent preliminary estimate released on Nov. 15.

The Slovak economy relies on exports to drive growth, making it vulnerable to a slowdown in western Europe, its main trading partner. Households are also reluctant to spend as employment hasn’t fully recovered to levels before the 2009 crisis and the economy is heading toward a deeper slowdown.

The Finance Ministry expects the economy to grow 3 percent in 2011, slowing from a 4.2 percent expansion in the previous year. In 2012, growth is set to falter to 1.7 percent, prompting the government to give up on its original goal to reduce the budget deficit to 3.8 percent of GDP.

Household consumption fell 0.9 percent in the third quarter from the same period last year, while government spending was down 3.3 percent and investment rose 5.9 percent. Exports of goods and services rose 6.8 percent, while imports dropped 1.8 percent, the office said.

--Editors: James M. Gomez, Douglas Lytle

To contact the reporter on this story: Radoslav Tomek in Bratislava at rtomek@bloomberg.net

To contact the editor responsible for this story: James M. Gomez at jagomez@bloomberg.net


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