Slovakia Merchandise Trade Balance (EUR bn)

Preliminary data shows that annual growth moderated in Q4, bringing the 2022 growth rate to 1.7%. While a full breakdown is not available until 7 March, the statistical office highlighted that private consumption and investment were the key growth drivers. During the quarter, GDP also exceeded its pre-pandemic levels. In Q1 this year, momentum is set to be weakening further. In January, harmonized inflation rose to 15.1%, hitting real incomes. Moreover, EU funds absorption is likely to be below potential. That said, improvements in economic sentiment—perhaps due to the recently approved caps on electricity prices—and hiring intentions in January bode more positively for activity. In politics, Parliament agreed on 31 January to hold early elections on 30 September. The legislature is deeply divided over its stance on Russia, boding poorly for political stability.