Slovakia Economic Forecast

Slovakia Economic Outlook

October 27, 2020

Available data points to a gradual recovery in Q3, following the unprecedented GDP drop in Q2. In August, the decline in industrial production softened for the fifth consecutive month, while merchandise exports rose at the strongest pace in over a year. Additionally, goods imports dropped at a softer pace in the same month, while retail sales rebounded in July–August, largely due to increased sales of electronics and recreational goods. This, coupled with consumers turning less pessimistic on average in Q3 compared to Q2, bodes well for household consumption. Nonetheless, a surge in Covid-19 cases prompted the reinstatement of the state of emergency on 1 October, which could lead to new restrictions and thus hamper activity in Q4. Lastly, on 14 October, the government approved its 2021 draft budget, based on a 5.5% growth forecast and envisioning a fiscal deficit of 7.4% of GDP.

Slovakia Economic Growth

The economy is seen contracting at a record pace this year before rebounding strongly in 2021. The gradual easing of pandemic-associated restrictions, coupled with EU funding, should ramp up domestic activity, while reviving foreign demand is expected to bolster the external sector. However, the unpredictable course of the pandemic poses a key downside risk. FocusEconomics panelists see the economy growing 6.0% in 2021, which is down 0.2 percentage points from last month’s forecast. In 2022, the panel sees GDP growth at 3.8%.

Slovakia Economy Data

2015 2016 2017 2018 2019
Population (million)5.45.45.45.45.5
GDP per capita (EUR)14,71314,93515,55116,48417,276
GDP (EUR bn)79.881.084.589.794.2
Economic Growth (GDP, annual variation in %)4.82.13.04.02.3
Consumption (annual variation in %)2.83.94.43.92.5
Investment (annual variation in %)21.6-9.33.93.75.2
Industrial Production (annual variation in %)6.74.63.34.30.5
Retail Sales (annual variation in %)1.72.16.03.7-1.3
Unemployment Rate11.59.78.16.55.8
Fiscal Balance (% of GDP)-2.7-2.5-1.0-1.0-1.3
Public Debt (% of GDP)51.952.051.349.448.0
Money (annual variation in %)11.15.26.26.58.9
Inflation Rate (CPI, annual variation in %, eop)-0.50.21.91.93.0
Inflation Rate (HICP, annual variation in %)-0.3-0.51.42.52.8
Inflation (PPI, annual variation in %)-4.3-4.31.95.02.6
Policy Interest Rate (%)-  -  -  -  -  
Exchange Rate (vs USD)-  -  -  -  -  
Exchange Rate (vs USD, aop)-  -  -  -  -  
Current Account (% of GDP)-1.7-2.1-2.1-2.4-2.9
Current Account Balance (EUR bn)-1.4-1.8-1.7-2.3-2.7
Trade Balance (EUR billion)-1.21.60.70.0-0.7
Exports (EUR billion)62.667.271.576.477.9
Imports (EUR billion)63.865.570.876.478.6
Exports (annual variation in %)0.37.36.46.91.9
Imports (annual variation in %)6.62.78.07.93.0

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Slovakia Facts

Value Change Date
Bond Yield0.13-4.12 %Dec 31
Exchange Rate1.120.65 %Dec 31

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