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Economic and political overview

Economic 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) 132.83142.62152.48160.36167.77
GDP (Constant Prices, Annual % Change) 1.62.21.92.32.6
GDP per Capita (USD) 24,46826,29028,17729,70631,157
General Government Balance (in % of GDP) -3.2-5.4-3.9-3.9-4.5
General Government Gross Debt (in % of GDP) 56.059.157.860.663.9
Inflation Rate (%) 11.02.85.12.42.0
Unemployment Rate (% of the Labour Force) 5.85.65.75.85.7
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

Country Risk

See the country risk analysis provided by La Coface.

 

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Main Sectors of Industry

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.

 
Monetary Indicators 20162017201820192020
Euro (EUR) - Average Annual Exchange Rate For 1 USD 0.940.890.850.890.88

Source: World Bank - Latest available data.

 

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Foreign Trade

Slovakia remains strongly dependent on external markets, with foreign trade representing 182% of its GDP (World Bank, latest data available). The country's strong industrial tradition, tax incentives, inexpensive and skilled workforce, rapidly developing infrastructure (boosted by an influx of EU funds), and fragile but real growth make it a preferred base for trade. Slovakia also benefits from an advantageous geographical location at the crossroads of Central Europe, representing a platform for re-exportation for the European automotive industry. In terms of product categories, in 2023, the country mainly exported machinery and transport equipment (63.1%), manufactured goods (14.7%), and chemical products (4%); while imports were led by machinery and transport equipment (49.2%), manufactured goods (13.6%), mineral fuels (8.7%), and chemical products (8.1% - data Statistics Slovakia). Exports rose mainly due to a 23.6% increase in new passenger car exports, adding EUR 5.8 billion to reach EUR 30.4 billion in 2024. The number of exported vehicles grew by 13.4% (+136.6 thousand units). Petrol cars with engines between 1.5–3 litres saw a 55.2% value increase, while electric and hybrid car exports rose by 20% and 17.3%, respectively. Imports fell primarily due to a 50% drop in natural gas value, which fell to EUR 3.0 billion, despite a smaller volume decline of 18.2%. The sharper value decrease resulted from lower global gas prices.
 
In 2023, Europe accounted for 77.4% of total exports and 64.9% of imports. On a country basis, Germany (21%), the Czech Republic (12.1%), Poland (7.3%), Hungary (7.1%), and France (5.3%) were the main destinations of Slovakia’s exports; whereas the main suppliers were Germany (14.5%), the Czech Republic (10.2%), China (7.4%), Poland (5.9%), South Korea (5.6%), and Hungary (5.2% - data Comtrade).

Historically, Slovakia has an overall positive trade balance, though it has been decreasing over the last few years and was negative in the two years preceding 2023. According to the national statistical office, in 2023, Slovakia exported goods worth EUR 108.4 billion, marking a 5.5% year-on-year increase. Imports decreased by 3.1% to EUR 103.9 billion. As a result, the foreign trade balance recorded a surplus of EUR 4.5 billion, improving by EUR 9 billion compared to the previous year. The overall trade balance was estimated to be positive by 1.6% of GDP. According to preliminary official data, in 2024, Slovakia's goods exports fell by 1.5% to nearly EUR 107 billion, while imports decreased by 0.2% to almost EUR 104 billion. The country's foreign trade ended the year with a surplus of EUR 3.1 billion, down EUR 1.4 billion in 2023. The balance was negatively impacted by a significant drop in the surplus in machinery and transport equipment and a widening deficit in chemicals.

 
Foreign Trade Values 20192020202120222023
Imports of Goods (million USD) 90,00184,393103,891112,466113,532
Exports of Goods (million USD) 89,50986,640103,891108,386117,316
Imports of Services (million USD) 10,9299,24710,66512,18211,652
Exports of Services (million USD) 12,29410,33811,31112,60112,476

Source: World Trade Organisation (WTO) ; Latest available data

Foreign Trade Indicators 20192020202120222023
Foreign Trade (in % of GDP) 183.7167.5181.9203.9182.3
Trade Balance (million USD) -1,677-244-1,688-7,596323
Trade Balance (Including Service) (million USD) -1281,106-653-6,9531,342
Imports of Goods and Services (Annual % Change) 2.4-7.911.74.2-7.7
Exports of Goods and Services (Annual % Change) 1.4-6.410.72.8-0.7
Imports of Goods and Services (in % of GDP) 91.983.291.2104.990.4
Exports of Goods and Services (in % of GDP) 91.884.390.799.091.9

Source: World Bank ; Latest available data

Foreign Trade Forecasts 20242025 (e)2026 (e)2027 (e)2028 (e)
Volume of exports of goods and services (Annual % change) 3.23.53.73.53.4
Volume of imports of goods and services (Annual % change) 5.63.33.13.13.3

Source: IMF, World Economic Outlook ; Latest available data

Note: (e) Estimated Data

 
International Economic Cooperation
Slovakia is a member of the European Union. It is also a member of the European Economic Area (EEA) which has guaranteed, since 1 January 1993, the free movement of most goods between the European countries.
Multilateral and bilateral agreements with many countries.
 

Main Partner Countries

Main Customers
(% of Exports)		 2023
Germany 21.0%
Czech Republic 12.1%
Poland 7.3%
Hungary 7.1%
France 5.3%
See More Countries 47.2%
Main Suppliers
(% of Imports)		 2023
Germany 14.5%
Czech Republic 10.2%
China 7.4%
Poland 5.9%
South Korea 5.6%
See More Countries 56.4%

Source: Comtrade, Latest Available Data

 

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Political Outline

Current Political Leaders
President: Peter PELLEGRINI (since 15 June 2024)
Prime Minister: Minister Robert FICO (since 25 October 2023)
Next Election Dates
Presidential: 2029
National Council: September 2027
Main Political Parties
Slovakia has a multi-party system, and parties need to work with each other to form coalition governments. The main political parties in the country are:

- Direction-Social Democracy (Smer-SD): left-wing
- Progressive Slovakia (PS): centre, social-liberalism, pro-environment
- Voice – Social Democracy (HLAS-SD): social-democratic, pro-European
- Slovak National Party (SNS): right-wing, nationalist
- Ordinary People and Independent Personalities (OLaNO): catch-all, populist, anti-corruption
- Christian Democratic Movement (KDH): centre-right
- Freedom & Solidarity (SaS): centre-right, described as eurosceptic

Other parties include:

- For the People (Za ľudí): centrist, liberalism
- We Are Family (Sme rodina): centre-right
- Most-Híd: centre, liberal, looks to expand understanding between ethnic Slovaks and Hungarians
- New Majority (NOVA): centre-right, liberal
- Slovak Conservative Party (SKS): centre-right, social conservatism
- Party of the Hungarian Community (SMK-MKP): centre-right , Hungarian minority
- Together (SPOLU): liberal-conservative

Executive Power
The President is the head of state and is elected by direct universal suffrage for a five-year term renewable once. Following the parliamentary elections, the leader of the majority party or the leader of a majority coalition is usually designated Prime Minister by the President and approved by the National Council with a vote of confidence, to serve a four-year term. The Prime Minister is the head of the Government and enjoys the executive powers, which include implementation of the law in the country and running the day-to-day affairs. The cabinet is appointed by the President on the recommendation of the Prime Minister.
Legislative Power
The legislature in Slovakia is unicameral. The parliament, called the National Council of the Slovak Republic, consists of 150 seats, with members elected by proportional representation to serve four-year terms. The executive branch of government is directly or indirectly dependent on the support of the National Council, often expressed through a vote of confidence. Legislative power is vested in the National Council. The Prime Minister cannot dissolve parliament, but the President may do so under specific constitutional conditions, such as if the National Council fails to approve the state budget, is unable to form a government, or if legislative processes are blocked. The people of Slovakia enjoy considerable political rights, including free elections, freedom of speech, and political participation.
 

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