Slovakia flag Slovakia: Economic outline

Economic Outline

Economic Indicators

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

Slovakia has experienced sustained and steady GDP growth since its integration into the European Union in 2004, except for the financial crisis of 2008-2009 and the Eurozone crisis of 2011-2012. In recent years, the Slovak economy had returned to growth, fuelled by the return of internal and European demand. Nevertheless, the outbreak of the COVID-19 pandemic and the global crisis it caused pushed the country into a heavy recession in 2020, with GDP estimated to have dropped by 4.8% due to a sharp contraction in investments, low foreign demand and a sharp drop in private consumption. In 2021, Slovakia met a growth of 4.4%, hindered by supply shortages that affected the automotive sector (which accounts for almost 14% of GDP alone). For 2022 the IMF forecasts a stronger growth of 5.2% followed by 4.3% in 2023, with domestic demand as the main growth driver.

The government deficit has increased to -3.4% in 2021 (from -2.1% one year earlier) because of the government measures implemented to contain the effects of the COVID-19 crisis and due to weak tax revenues and social contributions. Despite lower expenditure, the deficit should decrease only marginally over the forecast horizon. The debt-to-GDP ratio reached 61.4% in 2021 and is expected to increase slightly this year (62%) before decreasing to 60.1% in 2023 (IMF). Inflationary pressures have intensified last year ending at 2.4%, driven by adverse supply-side developments and labour shortages, and also by fast-rising commodity and input prices. Inflation is expected to further increase at the beginning of 2022, with average annual inflation of 3%. Overall, Slovakia remains a small economy, but has a strong financial system and offers a production platform for the European automotive and electronic industries. Structural problems that Slovakia faces are regional disparities, poor infrastructure, and an ageing population.
 
The unemployment rate picked up to 6.8% in 2021 (compared to 5.8% before the pandemic) despite the measures taken to mitigate the impact of the crisis. It should gradually decrease to 6.1% and 5.8% in 2022 and 2023, respectively. However, the expiry of the protective measures implemented on the labour market (such as the short-time work scheme) is likely to keep unemployment at higher levels than before the pandemic, while wage growth is likely to be weaker and regional disparity strong (West of Slovakia enjoys a strong concentration of foreign and domestic companies that curbs unemployment). Around 13.8% of the population is at risk of poverty (especially in the eastern part of the country), below the EU average of 21.9% (Eurostat, latest data available).

 
Main Indicators 201920202021 (e)2022 (e)2023 (e)
GDP (billions USD) 105.13e104.49e116.75127.50137.63
GDP (Constant Prices, Annual % Change) 2.5e-4.8e4.45.24.3
GDP per Capita (USD) 19,289e19,145e21,38323,32325,146
General Government Balance (in % of GDP) -1.8-2.1e-3.4-3.5-3.2
General Government Gross Debt (in % of GDP) 48.260.3e61.462.060.1
Inflation Rate (%) 2.82.0e2.43.02.1
Unemployment Rate (% of the Labour Force) 5.86.7e6.86.15.8
Current Account (billions USD) -2.85-0.37e-1.08-1.72-2.45
Current Account (in % of GDP) -2.7-0.4e-0.9-1.3-1.8

Source: IMF – World Economic Outlook Database, 2016

Note: (e) Estimated Data

 
Monetary Indicators 20162017201820192020
Euro (EUR) - Average Annual Exchange Rate For 1 GHS 0.240.200.180.170.16

Source: World Bank, 2015

 

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Latest Update: April 2022