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Economy and Finance

Economic forecast for Slovakia

The latest macroeconomic forecast for Slovakia. 

Indicators 2023 2024 2025
GDP growth (%. yoy) 1.1 2.3 2.6
Inflation (%. yoy) 11.0 3.5 2.6

Economic growth in Slovakia slowed down in 2023 driven by the decline in private and public consumption. The weakening of the economic outlook in the country’s major export destinations resulted in a decline of exports and imports, accompanied by a drawdown in inventories. Real GDP is estimated to have grown by 1.1% in 2023, slightly below the Autumn Forecast.

Going forward, a real wage increase should provide an extra stimulus for private consumption, as government measures are expected to continue to shelter consumers from the impact of high energy prices in 2024. The increase in real incomes is also likely to extend into 2025. Exports are expected to increase over the forecast horizon, as the economic situation in major export destinations is assumed to improve. The absorption of EU funds is seen as a strong contributor to investment growth in 2024 and 2025. Financing conditions are expected to ease further over the forecast horizon but to remain relatively tight, somewhat dampening private investments. Against this backdrop, economic growth is overall projected at 2.3% in 2024 and 2.6% in 2025. This implies a significant upward revision by 0.6 pps. in each year compared with the Autumn Forecast, due to an expected pick-up in private consumption and investment.

HICP inflation reached 11% in 2023 due to high energy prices and their pass-through to other components. The inflation rate is set to drop to 3.5% in 2024 as growth in energy and consumer food prices is expected to strongly moderate over the forecast horizon. However, the protracted impact of energy prices and a tight labour market are set to exert upward pressure on prices in the service sector. In 2025, HICP inflation is expected to further decline to 2.6%. For both years, these forecasts have been revised down compared to autumn. Government measures to mitigate the impact of high energy prices, which were extended into 2024, are assumed to be phased out in 2025.