Economic growth has already peaked
The euro zone Purchasing Managers’ Index (PMI), compiled by IHS Markit and seen as a good guide to economic activity, sank in May to an 18-month low of 54.1 points. This, along with weaker inflation, has intensified concerns the economic growth has already peaked. The euro fell to a six-month low after the PMI was released, also due to concerns over the political situation in Italy, where a new ruling coalition is being formed by two anti-establishment and anti-EU parties. Weak demand from Slovakia’s main trading partners in Western Europe will also impact Slovak economic activity.