Finance Ministry Revises Its 2027 Forecast Upwards, Expects GDP Growth at 1.8%

Bratislava, 29 September (TASR) - Slovakia's economy is expected to grow by 0.8 percent this year, while next year's growth should accelerate to 1.8 percent, according to the Finance Ministry's September macroeconomic forecast published on Tuesday. The ministry has left its previous June forecast for this year unchanged, but the forecast for 2027 was revised upwards from 1.5 percent. "A slight improvement is expected despite the persisting negative impacts of the external environment, which are still pulling our economy down. These involve trade wars, energy crisis, US tariffs and the loss of EU's competitiveness," stated the ministry, adding that the latest forecast takes into account the parameters of next year's budget. According to the ministry, a recovery in private consumption and exports should contribute to a better performance, with the ramp-up of production at the Volvo car plant providing a significant boost. "In the years 2029 and 2030, GDP growth should be slightly above 2 percent, with economic activity also supported by more intensive spending of EU funds," stated the ministry. The latest forecast also expects a more favourable trend in inflation, with the rate of price growth slowing down to 2.9 percent in 2027 from this year's 3.7 percent. Inflation should also be dampened by the expected continuation of energy assistance scheme for households. "A more positive development is also expected in real incomes of households, with the average nominal salary rising by 4.5 percent this year. Adjusted for inflation, real salaries should increase by 1.4 percent next year," quantified the ministry. At the same time, the ministry pointed out that while GDP growth forecasts are getting slightly better for Slovakia, the OECD's estimate of eurozone growth for 2027 was revised downwards from 1.2 percent to 1 percent. Next year, Slovakia is expected to grow faster than the eurozone average, as well as France (0.7 percent) and Germany (1.1 percent). According to the Finance Ministry's Financial Policy Institute (IFP), the risks in the forecast are balanced. These involve the persistently higher energy prices which could dampen the real performance of the economy and entail fiscal costs for the budget. Uncertainty in the external environment in connection with military conflicts and trade barriers could delay the recovery in exports and slow down economic growth. "Conversely, a swift end to the conflict in the Middle East would lead to lower energy prices, lower interest rates and reduced fiscal costs. Last but not least, Germany's momentum could be stronger than currently projected," added IFP in its commentary. jrg