Slovakia Economic Forecast

Slovakia Economic Outlook

July 23, 2019

The economy likely lost some momentum in the second quarter, after the auto sector propelled an acceleration in the first quarter. Softer industrial production and falling business confidence due to the wider pullback in the EU indicate a moderation of private sector activity. Nevertheless, consumer spending seemingly remained healthy in Q2: The unemployment rate dropped, wages rose robustly in April-May and consumer confidence improved. That said, employment dropped in May for the first time since September 2012, signaling employers face intensifying skill mismatch problems. Meanwhile, the IMF recently noted wage growth is outpacing productivity, and warned against risks associated with an overdependence on the automotive sector. However, it also highlighted the country’s continued robust growth trajectory and effective macro-prudential measures.

Slovakia Economic Growth

Growth is set to soften in 2019, as last year’s strong investment activity in the auto industry tapers off. However, the economy will expand robustly, as sustained wage and credit growth buttress consumer spending. The main downside risks for the highly open economy stem from reigniting global trade tensions, a hard Brexit, and a marked weakening in the German car industry. Our panel sees growth of 3.4% in 2019, which is down 0.1 percentage points from last month’s forecast, and 3.1% in 2020.

Slovakia Economy Data

20132014201520162017
Population (million)5.45.45.45.45.4
GDP per capita (EUR)13,70714,04914,59814,97015,612
GDP (EUR bn)74.276.179.181.284.9
Economic Growth (GDP, annual variation in %)1.52.84.23.13.2
Consumption (annual variation in %)-0.81.42.32.93.5
Investment (annual variation in %)-0.93.021.9-9.43.4
Industrial Production (annual variation in %)1.53.26.64.73.3
Retail Sales (annual variation in %)0.13.61.72.16.0
Unemployment Rate14.213.211.59.78.1
Fiscal Balance (% of GDP)-2.7-2.7-2.6-2.2-0.8
Public Debt (% of GDP)54.753.552.251.850.9
Money (annual variation in %)6.25.211.15.26.2
Inflation Rate (CPI, annual variation in %, eop)0.4-0.1-0.50.21.9
Inflation Rate (HICP, annual variation in %)1.5-0.1-0.3-0.51.4
Inflation (PPI, annual variation in %)-0.1-3.5-4.3-4.38.3
Policy Interest Rate (%)-  -  -  -  -  
Exchange Rate (vs USD)-  -  -  -  -  
Exchange Rate (vs USD, aop)-  -  -  -  -  
Current Account (% of GDP)1.91.0-1.7-2.1-2.1
Current Account Balance (EUR bn)1.40.9-1.4-1.8-1.7
Trade Balance (EUR billion)2.92.92.81.60.7
Exports (EUR billion)62.462.462.667.271.5
Imports (EUR billion)59.559.559.865.570.8
Exports (annual variation in %)3.70.00.37.36.4
Imports (annual variation in %)3.20.00.59.58.0

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Slovakia Facts

ValueChangeDate
Bond Yield-0.12-4.12 %Jul 31
Exchange Rate1.110.65 %Jul 31
Stock Market3440.0 %Jul 31

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