Analysts: Oil Prices and Interest Rates in Eurozone Can Slow Industry's Recovery

Bratislava, 11 May (TASR) - High oil prices and another rise in interest rates in the eurozone have the potential to slow the recovery of European (and Slovak) industry, analyst at UniCredit Bank Lubomir Korsnak stated in a commentary on the March industrial revenues data published by the Statistics Office on Monday, adding that the relatively high energy intensity of Slovak industry also increases its vulnerability to energy shocks. "This year, domestic industry will also be forced to cope with domestic fiscal consolidation and pressure for salary growth (such as a significant increase in the minimum wage). The outlook also includes positive drivers that could support it as early as this year, including the ramp-up of production of new fully electric models in the key automotive industry, the launch of the fourth unit of the Mochovce nuclear power plant, and the indirect effects of the German "fiscal bazooka" (a positive boost for suppliers to the German market)," said Korsnak. According to analysts at the Financial Policy Institute (IFP), the automotive sector faces growing competition from China in particular. A further slowdown could also come with the new 25 percent U.S. tariffs announced by the U.S. administration; currently, a 15-percent tariff is in effect. "The production of coke and oil products experienced a sharp slowdown in March, falling by as much as 45.6 percent, due to the halt in Russian oil supplies to Slovakia. Real revenues also declined in the production of metals, down 5.2 percent year-over-year. The decline was mitigated mainly by year-on-year improvements in the energy sector (10.7 percent), food production (15.8 percent), and the manufacture of machinery and equipment (10.1 percent)," added IFP analysts. Revenues in industry, the key sector of the economy, fell for the third consecutive month in March 2026 - by 1.3 percent year-on-year (y-o-y) in fixed prices when adjusted for inflation, the Statistics Office reported earlier on Monday, adding that seven of the 16 monitored industrial branches posted y-o-y decreases in revenues. am