GDP growth in third quarter of 2005

The growth in Slovakia's gross domestic product, which reached 6.2 percent in real terms over the third quarter of this year according to the Statistics Office estimate, came as a surprise to local analysts. They say Slovakia's economy should also continue to grow at a fast rate in the last quarter of this year. They expect end-year GDP growth to range from 5.5 percent to 5.7 percent. Though a detailed structure is not yet known, they attribute the high growth rate in Q3 to robust investment growth and household consumption. According to CSOB analyst Silvia Cechovicova, the high retail sales growth has already indicated a massive growth in household consumption, also supported by higher real wages and growing employment. Slovenska Sporitelna analyst Maria Feherova says that the strong domestic demand and net exports also positively influenced the Q3 GDP growth.

Although over the last five quarters net exports were slowing down real economic growth, in the third quarter of this year, its contribution was in all probability positive. Domestic demand could drive higher household consumption while double digit investment growth was reported due to higher construction activity, said analyst Feherova. The Slovak economy could thus grow at the highest pace in central Europe this year and achieve growth rate of 5.7 percent.

Total employment in Slovakia reached more than 2 million in the third quarter of this year. According to the Slovak Statistics Office's estimate employment grew 1.1 percent from the same period of last year.

Slovakia's high economic growth, inevitable for a growth in living standard and the employment rate, confirms that the ongoing economic reforms are successful, Finance Minister Ivan Miklos said. Miklos pointed out that the relevant authorities originally estimated slower economic growth. As he added only time will show whether it's a long-term trend or only a fluctuation. However he is hoping for a long-term trend.