FinMin: Slovakia's Economic Growth Should Reach 1.0% of GDP This Year

Bratislava, 15 February (TASR) - Slovakia's economic growth is expected to reach 1.0 percent of gross domestic product (GDP) this year, with the economy due to be driven mainly by the Recovery and Resilience Plan, while real salary growth is also predicted to continue, according to the conclusions of the latest macroeconomic forecast published by the Finance Ministry on Sunday. Finance Minister Ladislav Kamenicky (Smer-SD) described the economic situation as challenging. "Slovakia is significantly affected by what's happening in Germany, Austria, and globally. We've been significantly affected by tariffs and trade wars, and on top of that, we're still struggling with the consequences of devastated public finances," he said, adding that consolidation is therefore necessary. However, he declared that despite this, economic growth is holding steady at 1 percent of GDP and pro-growth measures are being worked on. According to Kamenicky, the whole of Europe is heading for difficult times "as a result of bad decisions". According to the Finance Ministry, Slovakia is a small and open economy that depends on the performance of its largest trading partners. "Since developments in Germany and Austria, for example, aren't at all favourable, this is also having a negative impact on its economy. If we add to this external headwinds, trade wars, the loss of competitiveness of European companies due to high energy prices, and overall global uncertainty, the result is a lower estimate of economic growth than was predicted last autumn. GDP growth should reach 1 percent this year," it said. The ministry claims that the Slovak economy should be boosted quite significantly in 2026, in particular by domestic demand. Investments from the Recovery and Resilience Plan are expected to be the main driving force of growth. The Finance Ministry expects that investments totalling more than €2.3 billion will be made under the programme this year. "The latest forecast provides a more positive estimate of inflation. While the Finance Ministry estimated inflation for 2026 at 4.4 percent last autumn, the latest forecast puts it at 3.8 percent. According to the Finance Ministry, a slight economic recovery should come in 2027. It expects GDP growth to reach 1.2 percent. This will be driven mainly by the start of exports from the new Volvo car factory. "This should help compensate for the lost market share of the Slovak automotive industry in the post-pandemic period," it stated, describing the risks of the forecast as balanced. am