August 14, 2019 / 9:41 AM / 2 months ago

UPDATE 1-Slovakia's car-reliant economy slows sharply as trade wanes

 (Adds analyst, central bank comments, background)
    BRATISLAVA, Aug 14 (Reuters) - Slovakia's economy, dominated
by car manufacturing, slowed unexpectedly in the second quarter
when it expanded by 1.9% year-on-year, down from a 3.7% rise in
the first quarter and missing analysts' expectations of 3.3%
    The quarterly, seasonally adjusted growth of 0.4% given by
the statistics office on Wednesday also missed analysts'
expectation of a 0.7% expansion - buffeted by turbulence in the
global economy and a shrinking Germany economy.                 
    "Slovakia is feeling the impact of the global slowdown and
the economic stagnation in Germany, our biggest trade partner,"
VUB Bank analyst Michal Lehuta said.
    "Slovakia's unexpected slowdown in the second quarter was
due to the slowdown in industrial output, falling net exports
and weak household consumption." 
    Slovakia's data has been the biggest disappointment in
central Europe as Hungary, Poland and the Czech Republic all
posted strong growth, albeit slowing down from first quarter. 
    Slovakia's industrial output dropped 2.1% year-on-year in
June, the first contraction since March 2018 and the lowest
level since April 2017, statistics office said last week.
    Car manufacturing at factories run by Volkswagen
           , Peugeot          , Kia             and Jaguar Land
Rover             fell for the first time in 18 months in June,
dropping by 7.6%.
    The country's central bank said a partial shutdown at oil
refiner Slovnaft MOLB.BU           in May and June and output
cuts at United States Steel Corp's       Slovak factory as the
steel industry struggles across Europe have also contributed to
slower growth.
    Statisticians will release the full breakdown of the Slovak
data, including household consumption, on Sept. 6.
    A slump in exports sent Germany's economy into reverse in
the second quarter, data showed on Wednesday, as its
manufacturers bore the brunt of a global slowdown amplified by
tariff conflicts and uncertainty over Brexit. 

 (Reporting by Mirka Krufova; Editing by Tatiana Jancarikova;
Editing by Alison Williams)
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