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Slovakia

The average annual growth rate of GDP grew mainly through 2013 at a slow pace and was 0.8%, which meant quite a significant slowdown from the previous years. The acceleration pace of growth took place only in the fourth quarter of 2013 and the first quarter of 2014, respectively by 1.4% and 2.0% and was mainly due to the substantial increase in domestic demand.[1]

A positive development in the first quarter of 2014 in Slovakia was the increase in foreign trade turnover by 6.3%. To maintain growth in exports is the essential target for Slovakia (6.1% year by year). The simultaneous increase in imports by 6.5%, points to the revival of domestic investment and domestic consumption. The Slovak GDP in the first quarter of 2014, at current prices increased by 1.9% y/y and in absolute numbers, reached 17.0 billion euro. GDP at constant prices increased by 2.4%, compared to the first quarter of 2013 and the amount was 15.5 billion euro.

The biggest impact on GDP and its dynamics is the development pace of the Slovak exports, which in the first quarter of 2014, was the 87% of GDP. 84.4% of exports were directed to the EU, meaning the high dependence of Slovakia on the development of the economic situation in most European countries, mainly in Germany (23% share in exports). In the first quarter of 2014, imports from EU countries were 63% of the total Slovak imports. Germany is also the largest import partner for Slovakia, with the share of over 14%. In second place is the supply from Russia (more than 10% of imports), mainly due to the supply of natural gas, crude oil and raw materials. In third place is the Czech Republic with the share of nearly 10% and with the 9% of share in imports, South Korea becomes the next (supplies for factories - investment from South Korea) and 7% from China.

In the first quarter of 2014, Slovakia's foreign trade turnover, according to data from the Slovak Statistical Office (SUS) was 30.8 billion euro, an increase of 6.2% compared to the same period of 2013. Exports of Slovak goods, as in the mentioned period above, increased by 6.1% y/y and became 16.0 billion euro. While the imports to Slovakia increased by 6.5% and reached 14.8 billion. Slovakia achieved 1.2 billion euro surplus in the foreign trade value. Since the beginning of 2014, the trend continued, which began in mid-2013, when inflation was close to zero and for the first quarter of 2014 was -0.1% y/y, on average. The greatest influence on such development decreased approx. 1 percentage point (p.p.) of rental, water and energy costs, which have the greatest importance within the consumer's shopping basket (i.e. 279.405 %). The favorable phenomenon was also low, i.e. 0.7 p.p. increase in the prices of food and non-alcoholic beverages, which have the second highest weight (166.981 ‰) in consumer's basket.

As a result, low inflation was recorded after three years of growth in real wages and the increase in domestic consumption of citizens (+3.4% y/y at constant prices, at current prices +2.5% y/y).



[1] Polish National Bank, The economic situation in the countries of Central and Eastern Europe, 2014