SAV: Slovak Economy to Grow by Only 0.5% in 2026 But Should Speed Up Afterwards

Bratislava, 13 March (TASR) - The Slovak economy is projected to grow by only 0.5 percent in 2026, a significantly slower pace than in previous years, and growth will be hampered primarily by weaker foreign demand, fiscal consolidation and persistent uncertainty in the global economy, according to the latest forecast by the Economic Institute of the Slovak Academy of Sciences (SAV), which has assessed economic developments through to 2030. In the coming years, Slovakia's growth is expected to gradually accelerate and stabilise at around 2 percent. "Inflation is expected to hover at around 4 percent in 2026. Price growth will be driven primarily by fiscal consolidation measures and higher costs for businesses. Real salary growth will therefore be only modest," predicted SAV analyst Tomas Miklosovic. The drawing of European funds, particularly from the Recovery and Resilience Plan and the new programme period for EU funds, is expected to be a key driver of economic growth. According to the SAV analysts, a lower absorption of these funds could therefore significantly slow down economic growth. "An economic recovery is expected in 2027, when gross domestic product (GDP) growth could reach approximately 1.3 percent. This could be aided by a gradual improvement in foreign demand, higher public spending in the European Union (EU) and the launch of new production capacity at the Volvo car plant in Slovakia," said Miklosovic. According to him, the labour market will face demographic challenges. The unemployment rate could rise to approximately 5.8-5.9 percent in the coming years, while labour shortages and an ageing population will limit the economy's growth potential in the long term. According to the SAV forecast, Slovakia could have the lowest economic growth among the Visegrad Four (V4) countries (the Czech Republic, Hungary, Poland and Slovakia) and Austria in 2026. Without implementing economic reforms, Slovakia's convergence with more developed EU countries could also slow down. In the medium term, the analysts expect the economy to stabilise, with growth reaching approximately 2 percent annually between 2028-2030. am/df