Hi Neil
Yes, interesting price growth figures.
And, as our soon to be released Slovakia property market profile will show, there’s a great deal more growth on the way!
If you look at the data released today by the Slovak statistical office, you can see why – Slovakia’s economy is booming!
What’s more – and most importantly – it’s booming because of export led growth, which means the growth doesn’t translate into spiraling inflation.
That’s what makes Slovakia special and different from the Baltics, which had the growth but also the huge inflation that went with it and those three – Latvia, Estonia and Lithuania - have all effectively kissed goodbye to joining the euro until well after 2010.
Slovakian GDP expanded a record 14.1% in Q4 of 2007 – the fastest growth in the EU by far.
This is up from a blistering 9.4% growth in Q3.
You don’t need to be an economist to figure that this kind of growth, plus in-check inflation (3.8% in December) equals jobs (employment up 2.3% year on year) and big rises in affluence – and, by extension, demand for better quality property.
The key to this spectacular growth has got to be the massive investments by big corporates, notably major car makers, like Peugeot-Citroen and Kia.
This is a classic slow burn effect of big injections of FDI – the car factories take a while to get built and come on stream at maximum capacity – that’s why we’ve seen this leap in growth in Slovakia in the last year or so.
And it’s also why it looks as near certain as these things ever are that the country will adopt the euro in under 12 months – providing another boost to the economy.
Until then the koruna is pegged to the euro in ERM and looks rock solid.
Meanwhile, at least one of those giant car producers – Peugeot – is also very bullish about sales projections and profit forecasts for this year, expecting sales to grow 5%. The main engine of that growth will be outside of Western Europe, the company said – and in developing countries: South America, China, Russia and Eastern Europe, said the company.
All great news for Slovakia then….
ES