Slovakia Economic Forecast

Slovakia Economic Outlook

May 31, 2022

GDP growth improved in the first quarter of this year. The acceleration was spearheaded by stronger domestic demand: Eased Covid-19 restrictions pushed up average annual retail sales growth to 16.0% in Q1 from 2.4% in Q4, pointing to healthier private spending growth. Less positively, the external sector weakened in Q1, weighing on the overall result. Turning to Q2, available data paints a mixed picture. Both business and consumer confidence improved in April, suggesting that private sector was broadly resilient to a slowing global economy and supply bottlenecks arising from the war in Ukraine and lockdowns in China. That said, inflation shot up to a record high in April and will likely remain at all-time highs in the coming months, in turn hurting household consumption in Q2. Meanwhile, on 23 May, S&P Global Ratings slashed the outlook of Slovakia’s A+ rating from stable to negative.

Slovakia Economic Growth

Our panel sees growth easing this year, with the economy again one of the worst performers in the Euro area. The importance of the automotive sector and dependence on Russian energy imports makes the country especially vulnerable to the fallout of the Russia-Ukraine war, which will hit export and manufacturing activity, private spending and investment. FocusEconomics panelists see the economy growing 2.4% in 2022, which is down 0.2 percentage points from last month’s forecast. In 2023, the panel sees GDP growth at 3.7%.

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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