Slovakia Economic Forecast

Slovakia Economic Outlook

September 1, 2020

The economy fell into recession in Q2, with GDP nosediving at a record-breaking year-on-year pace as the full brunt of the pandemic was felt. Industrial output contracted by over 25% in the quarter, reflecting weakened manufacturing activity amid temporary lockdown restrictions in the all-important car industry. Moreover, retail sales declined sharply in Q2, while the unemployment rate climbed to a two-year high in June, spelling trouble for household spending. On a brighter note, however, both consumer and industrial sector business sentiment improved in July–August amid the lifting of containment measures, with firms expecting an uptick in production in the three months ahead. Moreover, the country is poised to receive a EUR 631 million loan under the SURE scheme to help cover the costs of unemployment spending, according to an EC proposal released on 24 August.

Slovakia Economic Growth

GDP is expected to shrink sharply this year due to the Covid-19 pandemic. Domestic containment measures will constrain private consumption and investment activity, while severed global value chains and weak European demand are set to hammer exports. Although fiscal and monetary stimulus should provide support, the risk of new virus flare-ups clouds the outlook. FocusEconomics panelists see the economy contracting 7.7% in 2020, which is up 0.3 percentage points from last month’s forecast. For 2021, the panel sees GDP growth at 6.4% in 2021.

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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