Page 59 - CE Outlook Regions 2023

as compared with July to October 2021), but analysts believe that
namely the secondary apartment market, especially its sector of old
apartments, will be livelier than the others.

3.5.6 Major Sectors

Lithuania had a similar situation to Latvia as a large proportion of hotel
reservations have been cancelled because of the war in Ukraine. These
have mostly been group bookings from Germany, as well as the United
States and Asia.

Lithuania’s Hotel and Restaurant Association (LHRA), says that the
country’s inbound tourism has shrunk 47% over the last two years.
Over the period, the number is approximately 30% in Estonia and over
55% in Latvia.

To ensure that the upcoming winter is not too difficult for the tourism
sector, Lithuania reduced the VAT rate for hotels for an indefinite period
and extended the VAT exemption for restaurants for a half a year. A
part of the cost of electricity will also be reimbursed to operators of
hotels and restaurants in the Baltics. The other two Baltic states passed
similar measures.

3.6 Real economy - Slovakia

3.6.1 Retail

Retail turnover has been declining since August. September figures
show the retail trade down y/y by 4.9% despite the turnover in sales
and repair of motor vehicles and motorcycles increasing by 5.2% y/y,
which was driven by an 11.2% increase in turnover of vehicles. In
October retail trade fell by 4.4%.

In retail trade real wages decreased by 5% y/y in October.

3.6.2 Banks

Close to €20bn were provided in new loans for housing and some €4bn
in consumer loans in the past two years, according to the Slovak
Banking Association (SBA). Banks in Slovakia also own state bonds
worth €9bn which is a sixth of the emitted value.

NBS puts the net profit of the banking sector for January-September
2022 at €572mn, which is comparable to the corresponding period in
2021 despite the spike in interest rates.

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