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 growing 1.7% in 2022, the Slovak economy decelerated to 1.1% in 2023 due to reduced private and public consumption accompanied by a decline in exports and imports, coupled with inventory reductions, reflecting the weakening economic prospects in its primary export markets (EU Commission). The economic growth outlook for 2024 and 2025 stands at 2.3% and 2.6% respectively. Real wage hikes are expected to bolster private consumption, offering an additional stimulus. Furthermore, the absorption of EU funds is anticipated to significantly contribute to investment growth (EU Commission).

In 2023, the general government budget saw a significant deterioration due to heightened social transfers, raises in public sector wages, increased interest rates, amplified military spending, and temporary measures to support energy schemes benefiting households and firms. The deficit was estimated at 6.5% of GDP by national authorities. The EU Commission raised concerns about the 2024 budget, projecting the deficit at 6.3% in 2024. Similarly, the debt-to-GDP ratio is on an upward trajectory according to Fitch Ratings, which expects it to rise to 62.1% by end-2025 from 57.8% at end-2022. Interest costs, however, are anticipated to increase gradually, attributed to a favorable redemption profile characterized by an average maturity of 8.5 years and predominantly fixed-rate debt structures. As per the EU Commission, inflation surged to 11% in 2023, driven by elevated energy prices and their subsequent influence on other components. In 2024, the inflation rate is projected to decrease to 3.5%, largely due to the anticipated moderation in energy and consumer food prices. However, the persistent effects of energy prices and a constrained labor market are expected to exert upward pressure on prices within the service sector. By 2025, inflation is forecasted to decline further to 2.6%.

The unemployment rate decreased to 6.1% in 2023 (from 6.2% one year earlier) and is expected to hover around 5.9% in the short term, while the labor market remains tight. Overall, around 15.6% of the population is at risk of poverty (especially in the eastern part of the country), less than the EU average of 21.6% (Eurostat, latest data available). The country’s GDP per capita (PPP) was estimated at USD 37,459 in 2022 by the World Bank, 31% below the EU average.

Foreign Trade

Slovakia remains strongly dependent on external markets, with foreign trade representing 170.6% 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 2022, the country mainly exported machinery and transport equipment (57.7%), manufactured goods (16.9%), and chemical products (4.9%); while imports were led by machinery and transport equipment (43.8%), manufactured goods (14.2%), mineral fuels (14.1%), and food (5.1% - data Statistics Slovakia).

In 2022, Europe accounted for 88.6% of total exports and 73.9% of imports. On a country basis, Germany (20.9%), the Czech Republic (12.1%), Hungary (8.7%), Poland (7.7%), and France (58%) were the main destinations of Slovakia’s exports; whereas the main suppliers were Germany (14.1%), the Czech Republic (9.1%), China (7.5%), Russia (7.4%), South Korea (5.7%), and Poland (5.5% - data WTO).

Historically, Slovakia has an overall positive trade balance, though it has been decreasing over the last few years. For the last 14 years, the export of goods exceeded the import, but in 2022 the balance ended with significantly negative values: exports of goods totaled EUR 95.1 billion (+16.1 year-on-year) against EUR 98.2 billion in imports, up by 23.6% y-o-y. Higher prices of selected energies and materials had a significant impact on the record-high import. Nevertheless, according to preliminary data by Statistics Slovakia, the trade balance in goods returned to positive territory in 2023: exports surged by 5.4%, surpassing EUR 108 billion, while imports dropped by 2.9% totaling EUR 104 billion. Both export and import values crossed the EUR 100 billion mark, marking the highest volume since 2010.

COVID-19 Country Response

Travel restrictions

Regularly updated travel information for all countries with regards to Covid-19 related entry regulations, flight bans, test and vaccines requirements is available on TravelDoc Infopage.
To find information about the current travel regulations, including health requirements, it is also advised to consult Travel Regulations Map provided and updated on a daily basis by IATA.

Import & export restrictions

A general overview of trade restrictions which were adopted by different countries during the COVID-19 pandemic is available on the International Trade Centre's COVID-19 Temporary Trade Measures webpage.

Economic recovery plan

The summary of the EU’s economic response to the COVID-19 pandemic is available on the website of the European Council.
For the general overview of the key economic policy responses to the COVID-19 outbreak (fiscal, monetary and macroeconomic) in Slovakia, please consult the country's dedicated section in the IMF’s Policy Tracker platform.

Support plan for businesses

For an evaluation of impact of the Covid pandemic on SMEs and an inventory of country responses to foster SME resilience, refer to the OECD's SME Covid-19 Policy Responses document.
You can also consult the World Bank's Map of SME-Support Measures in Response to COVID-19.