* Economy shrinks 5.3 percent year-on-year in Q2
* GDP up 2.2 pct quarter-on-quarter
* Improvement seen driven by euro zone's recovery
By Martin Santa and Peter Laca
BRATISLAVA, Sept 2 (Reuters) - Slovakia's economy shrank at
a slower annual rate in April-June and GDP actually rose
quarter-on-quarter, data showed on Wednesday, suggesting that a
patchy recovery in the euro zone may be spreading east.
Gross domestic product fell 5.3 percent year-on-year in the
second quarter, the Slovak Statistics Office said, matching the
flash estimate released on Aug. 13, and slightly less than a 5.6
percent contraction in the first three months of the year.
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Second quarter GDP rose 2.2 percent from the first quarter,
on a seasonally adjusted basis, the Office added.
"The economy hit the bottom in the first quarter, and a
gradual recovery has started, driven to some extent by
administrative measures in western Europe," said Maria
Valachyova, the senior analyst at Slovenska Sporitelna. "The
question remains how fast this recovery will be."
Slovakia is heading towards its first full-year recession as
demand for its key exports, cars and electronics goods, dried up
in the West. However, the German and French economies have
already returned to growth and overall euro zone GDP fell only
marginally in the second quarter against the previous three
months, data confirmed on Wednesday. []
Economists said longer-term problems remained for Slovakia.
"The entire (annual) drop of the GDP is due to low
investment activity," said Eduard Hagara, ING Bank analyst in
Bratislava. "Less investment sets preconditions for a smaller
growth in the coming years."
Gross fixed capital formation fell 17.6 percent on the year,
following a 4.1 percent decline in the first quarter, while the
fall in exports slowed to 20.5 percent in the second quarter
from a 24.3 percent drop in the previous period.
Slovakia's economy, a member of the euro zone since January,
has been slowing from one of the highest growth rates in the
European Union, which peaked at 10.4 percent growth in 2007.
Analysts said the second quarter data showed a surprising
rise in household consumption, which they said could be a
one-off effect driven by a car-scrapping subsidy scheme.
They expected household spending to swing into negative
territory in the coming quarter.
The recession is putting pressure on the public finances as
slowing budget revenues are complicating government efforts to
maintain expanded welfare programmes a year before a general
election.
Separate finance ministry data showed on Wednesday the
central state budget deficit totalled 1.2 billion euros for the
January-August period, above the full-year ceiling of 1.0
billion [].
(Reporting by Martin Santa; editing by David Stamp)
