Saturday, 15 March 2025
Slovakia’s economy grew by 1.8% year-on-year in the fourth quarter of 2024, in line with preliminary estimates and accelerating from the 1.2% expansion in Q3, which had been the slowest growth rate in nearly two years. The fourth quarter marked the seventh consecutive period of GDP expansion, supported by improvements in household spending and government expenditures, despite continued declines in fixed capital investment.
The economy benefitted from positive contributions from net trade, with exports remaining stable while imports declined by 0.1%. The reduction in imports helped improve Slovakia’s trade balance, providing a net boost to GDP. Household consumption growth picked up momentum, rising by 2.7% compared to 1.5% in Q3, suggesting increased consumer confidence and stronger retail activity. Government spending also accelerated, increasing by 2.1%, up from 0.9% in the previous quarter, reflecting higher public sector investments and support measures.
However, challenges persisted in gross fixed capital formation, which saw a sharp decline of 11.5% in Q4, deeper than the 8% drop recorded in Q3. The contraction in capital investment reflects weak business sentiment and continued caution among companies, particularly in construction and industrial sectors, where higher financing costs and economic uncertainties have limited expansion plans.
On a quarterly basis, Slovakia’s GDP grew by 0.5% in Q4, following a 0.3% expansion in the third quarter. For the full year of 2024, the economy expanded by 2%, marking the fastest annual growth rate in three years, up from 1.6% in 2023. The improved performance was driven by resilient domestic demand, a gradual recovery in external trade, and fiscal support measures that helped sustain growth despite global economic headwinds.
Looking ahead to 2025, Slovakia’s economic trajectory will depend on several key factors, including interest rate policies, EU funding inflows, and global trade conditions. Policymakers will be closely monitoring investment trends, as business confidence and capital formation remain areas of concern. With inflation expected to moderate and real wage growth improving, consumer spending may continue to support GDP growth, but external risks, such as geopolitical uncertainties and energy price fluctuations, could influence overall economic momentum.
Despite ongoing structural challenges, Slovakia’s economy remains on a steady expansion path, with moderate but stable growth prospects for the coming year.
