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 recession in 2020. The economy returned to growth in 2021 (+3%) and recorded an estimated growth of 1.8% in 2022 as high inflation weighed on private consumption and the weak performance of major export destinations hampered foreign trade, with the overall balance of trade turning negative for the first time in 14 years. For 2023, the IMF forecasts GDP growth at 1.5% driven by public investment (underpinned by plans to absorb EUR4 billion in Multi-Annual Financing Framework funds). Private consumption is expected to regain momentum only in 2024, the same as for exports, resulting in a projected growth rate of 3.4%.

In 2022, the general government budget was affected by a series of one-off measures (with energy support totalling EUR 5.5 billion), as well as by higher permanent spending both in terms of wages and transfers (including a family package costing 1% of GDP), resulting in an overall deficit of 3.3% of GDP (Fitch Ratings). For 2023, the deficit is expected to widen to 5.6% as windfall profits and EU funds will only offset some of the additional expenditure. The debt-to-GDP ratio was estimated at 60.5% in 2022 by the IMF and is expected to follow a downward trend over the forecast horizon (at 57.4% this year and 56.2% in 2024). Debt dynamics should be supported by nominal growth and stable debt-servicing costs. Inflation soared to over 11.9% in 2022 due to high energy prices and the pass-through to core components, especially food. Food prices are expected to keep pushing inflation in 2023, with a projected rate of 10.1%, before inflation gradually eases to 4.4% the following year (IMF).

The unemployment rate decreased to 6.2% in 2022 (from 6.8% one year earlier). The labour market remains tight and is set to contribute to more persistent growth of prices in the service sector in 2023. Overall, around 15.6% of the population is at risk of poverty (especially in the eastern part of the country), below the EU average of 21.7% (Eurostat, latest data available). The country’s GDP per capita (PPP) was estimated at USD 38,620 in 2022 by the IMF, 28.4% below the EU average.

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