INVESTMENT CYCLE IN THE ECONOMY OF SLOVAKIA AND IN THE EU-27

Abstract

Fluctuations in investment and consumption expenditure often give rise to the business cycle.Older theories or approaches to business cycles found the causes of cyclical fluctuations in investment, underconsumption, psychological factors as well as climatic factors.The aim of the article is to evaluate the development of investment and consumption expenditure in the economy of Slovakia and the EU-27 economy. In the period 2003-2022, which is the subject of our interest, the Slovak economy as well as the EU economy experienced two major economic recessions.The first was caused by the global financial crisis, and the second was due to the coronavirus pandemic.Investment expenditure was subject to significant fluctuations throughout the reporting period, butthe fluctuations were larger in the Slovak economy.Consumer spending also experienced cyclical fluctuations in both Slovak and the EU-27 economies.Consumption growth in the SR during the period of high GDP growth (2004-2008) exceeded consumption growth in the EU-27countries.During the global financial and economic crisis, consumer spending declined only slightly in both economies.Consumption fell more during the economic crisis caused by the coronavirus pandemic (2020).In the EU-27, consumer spending decreased by -4.8%, in Slovakia by -1%.