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2022/09/13 / Erste Group Research
Slovakia | Slowdown in Slovak economy

Slowdown in Slovak economy

The Slovak economy, still lagging behind the pre-pandemic levels, faces unprecedented challenges again. In the first half of 2022, domestic demand (especially household consumption) remained resistant to the issues visible in the economy. On the other hand, investment activity was struggling to rebound after the hard pandemic hit and supply-side problems put pressure on export activity. For the rest of the year, we expect elevated uncertainty and higher inflation to dampen household expenses, investment activity as well as export activity. However, we still speak about a 'slowdown' rather than a contraction in the economy.

It is already confirmed that the higher inflation rate will stay with us longer than previously anticipated, mainly on the back of energy prices. Thus, the average inflation rate may exceed 12% this year and reach 10% next year, depending on the measures taken to mitigate the excessive energy prices. This will also require higher fiscal spending, not only for citizens, but also for businesses, resulting in a deficit of around 5.5% of GDP this year. Given the fiscal stance after the pandemic, targeted and effective steps are more than necessary

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General information

AuthorErste Group Research
Product typemonthly/ quarterly
Product nameCEE Country Macro Outlook
Topic in focusFX, Macro/ Fixed income
Market cap-
AvailabilityAll [1]


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