Page 38 - CE Outlook Regions 2023
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                               2.6.1 GDP growth


                               Slovak GDP grew by 1.4% y/y in 3Q 2022 and by 0.4% q/q, which was
                               a moderately better slowdown than market expectations. Overall, the
                               GDP in the first three quarters reached €79.4bn and rose by 1.9%. It is
                               above the pre-pandemic level by 0.9%.


                               Moderate growth was recorded in individual sectors, with industry
                               surpassing the pre-pandemic level from 3Q 2019 by 1.1.%. Even
                               though manufacturing grew by 3.7%, it lagged pre-pandemic levels by
                               4.7%.

                               The National Bank of Slovakia (NBS) writes in its winter report that the
                               risk of recession is increasing in 2023, but the slowdown at the
                               beginning of 2023 should only be a moderate one following EU-level
                               and national interventions into energy pricing. It improved its projections
                               of GDP growth in 2023 to 1.6%.

                               The European Commission’s autumn forecast predicts a slowdown in
                               Slovak GDP growth to 0.5% in 2023. The 2023 slowdown is expected
                               as “higher energy prices will erode households’ purchasing power and
                               increase the production costs of firms, which are already facing supply
                               bottlenecks and will now also be affected by lower demand”.


                               Successful absorption of EU funds complemented by government
                               investments will be crucial for maintaining growth in the years 2023 and
                               2024. NBS expects an increase in the drawing of EU funds despite
                               setbacks in a swifter transition to a carbon-free economy.


                               The nominal monthly wage for January-October 2022 increased
                               between 5% to 19% y/y in all 10 monitored sectors of the economy, but
                               real wages fell in nine of the sectors, except for the accommodation
                               sector where real wages increased by 6% in the first 10 months of
                               2022. A significant decline in real wages was registered in industry,
                               which employs more than half a million, and where real wages fell by
                               3.6% y/y.

                               Unemployment rates have been decreasing in the autumn, with the rate
                               going from 6.1% in September to 5.9% in October and 5.8% in
                               November.



















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