Economic Outline

Economic Indicators

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.

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