Slovakia: Economic and Political Overview
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, the Eurozone crisis of 2011-2012, and the COVID-19 pandemic. After a sharp slowdown in 2022–23 (+1.6%), Slovakia’s economy grew by an estimated 2.1% in 2024, outpacing the euro area. Growth was driven by recovering real wages, extended household energy support, and higher pensions. Public consumption helped offset weaker EU-funded investments. Growth is expected to ease to 1.9% in 2025 before rising to 2.1% in 2026 (IMF). Near-term risks include a global slowdown or rising trade policy uncertainty, which could dampen growth and push inflation lower.
Concerning public finances, the fiscal deficit rose to 5.7% of GDP in 2024, up from 5.2% in 2023, as revenue easing and higher spending outweighed 0.6% of GDP in net consolidation measures. This followed a 3.6 percentage point widening of the deficit in 2023. In October 2024, Parliament adopted a consolidation plan to cut the government deficit below 3% of GDP by 2027. Fiscal improvements, totalling about 2.0% of GDP in 2025–26, focus on revenue measures, including new levies on refineries and mobile operators. The budget increases spending on childcare, social services, military pay, culture, and the Environmental Fund, while extending electricity support for households into 2025. The deficit is projected to decline to 4.7% in 2025 and 3.6% in 2026 (OECD). Meanwhile, the debt-to-GDP ratio stood at 59.1% in GDP and is expected to increase marginally over the forecast horizon, reaching 60.6% by 2026. After falling from record highs in 2023, inflation rose in the second half of 2024 due to higher global food prices, reaching 2.8% for the year. Core inflation remained above the euro area average, driven by a tight labour market and strong wage growth. Inflation is expected to rise to 4.0% in 2025 before easing to 3.2% in 2026 (IMF).
The unemployment rate decreased to 5.6% in 2024 (from 5.8% one year earlier) and is expected to hover around 5.7% in the short term. While the labour market remains tight, strong wage growth should boost real incomes, supporting consumption. The OECD recommends addressing labour shortages by extending working lives, encouraging maternal workforce participation, shortening parental leave, improving childcare access, and promoting flexible work options. Overall, around 17.6% of the population is at risk of poverty (especially in the eastern part of the country), less than the EU average of 21.4% (Eurostat, latest data available). The country’s GDP per capita (PPP) was estimated at USD 45,632 in 2024 by the IMF, still below the EU average.
| Main Indicators | 2023 (E) | 2024 (E) | 2025 (E) | 2026 (E) | 2027 (E) |
| GDP (billions USD) | 132.83 | 142.62 | 152.48 | 160.36 | 167.77 |
| GDP (Constant Prices, Annual % Change) | 1.6 | 2.2 | 1.9 | 2.3 | 2.6 |
| GDP per Capita (USD) | 24,468 | 26,290 | 28,177 | 29,706 | 31,157 |
| General Government Balance (in % of GDP) | -3.2 | -5.4 | -3.9 | -3.9 | -4.5 |
| General Government Gross Debt (in % of GDP) | 56.0 | 59.1 | 57.8 | 60.6 | 63.9 |
| Inflation Rate (%) | 11.0 | 2.8 | 5.1 | 2.4 | 2.0 |
| Unemployment Rate (% of the Labour Force) | 5.8 | 5.6 | 5.7 | 5.8 | 5.7 |
| Current Account (billions USD) | -2.10 | -2.41 | -2.21 | -1.53 | -1.06 |
| Current Account (in % of GDP) | -1.6 | -1.7 | -1.4 | -1.0 | -0.6 |
Source: IMF – World Economic Outlook Database, October 2021
The Slovak Republic boasts a highly qualified labour force of 2.79 million out of its 5.42 million population. The agriculture sector is minimally developed and represents only 2% of the GDP and 2.4% of employment (World Bank, latest data available), although nearly two-fifths of the land is arable. The main agricultural products in the country are cereals, potatoes, sugar beets, and grapes. The mountainous area of Slovakia features vast forests and pastures, which are utilized for intensive sheep grazing, and it is rich in mineral resources including iron, copper, lead, and zinc. According to the third yield estimate by the Statistical Office of Slovakia, in 2024, Slovakia’s corn production reached 982 thousand tons, down 11% from the previous year despite a slight increase in sown area. Yields averaged 6.63 tons per hectare, 17% lower than in 2023 and 8% below the five-year average.
The secondary sector represents 32.9% of the GDP and employs 34.9% of the workforce. Heavy industry sectors - such as metal and steel - are still undergoing a restructuring phase. High-value-added industries, like electronics, engineering, and petrochemicals, are concentrated in the western part of the country. Sectors like automobiles and consumer goods experienced a significant contraction during the pandemic but have started to recover relatively fast and are offering attractive opportunities to foreign investors. The World Bank estimates that the manufacturing sector alone accounts for more than one-fourth of Slovakia’s GDP. Figures from the national statistical office show that industrial production decreased by 0.7% year-on-year in 2024, marking the seventh slowdown of the industry in the last 15 years. Mining fell nearly 25% due to mine closures, though with little impact on the overall industry. The largest negative impacts came from an 8% drop in metal production and a 13% decline in machinery manufacturing. Car companies increased output by over 4% (+1.05 p.p.), despite growth in only 6 of 12 months, mainly in autumn. Electricity and gas supply grew by 5% (+0.53 p.p.), adding a positive push to industrial performance.
The services sector contributes 56.4% of the GDP and employs around 62.7% of the active population. It is dominated by trade and real estate. The development of tourism may also become important for the Slovak economy in the coming years, as it has been one of the country's most dynamic sectors before the outbreak of the COVID-19 crisis. The sector showed signs of recovery in recent years, with the turnover of hoteliers and accommodation providers exceeding EUR 613 million in 2024, marking a 9% y-o-y increase. More than 60% of the turnover (EUR 613 million) was generated by domestic visitors, and 40% of the total turnover (EUR 242 million) was payments from foreign visitors (Statistics Slovakia). The country’s banking sector consists of 24 financial institutions: albeit strong, it is one of the smallest in the EU in comparison to GDP, and is largely owned by foreign groups (mostly from Austria, Italy, and Belgium; whereas only two are owned by Slovakians and one is controlled by the government). The sector is dominated by three major banks — Slovenská sporiteľňa, VÚB Banka, and Tatra banka — which control 60% of total assets (data EBF). The retail sector remains pivotal to the economy, with turnover growing by 4.5% in 2024 — one of the strongest results since 2013 (Statistics Slovakia).
| Breakdown of Economic Activity By Sector | Agriculture | Industry | Services |
| Employment By Sector (in % of Total Employment) | 2.4 | 34.9 | 62.7 |
| Value Added (in % of GDP) | 2.0 | 32.9 | 56.4 |
| Value Added (Annual % Change) | 21.0 | 15.0 | -1.9 |
Source: World Bank, Latest Available Data. Because of rounding, the sum of the percentages may be smaller/greater than 100%.
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The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.}}
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Source: Index of Economic Freedom, Heritage Foundation
The business rankings model measures the quality or attractiveness of the business environment in the 82 countries covered by The Economist Intelligence Unit’s Country Forecast reports. It examines ten separate criteria or categories, covering the political environment, the macroeconomic environment, market opportunities, policy towards free enterprise and competition, policy towards foreign investment, foreign trade and exchange controls, taxes, financing, the labour market and infrastructure.
Source: The Economist Intelligence Unit - Business Environment Rankings 2021-2025
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