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2022/03/11 / Erste Group Research

Economy below pre-pandemic levels in 2021


After two years of pandemic, the Slovak economy still remains below its prepandemic maximum (around 1%). While at the beginning of the pandemic, industry was a driver of economic growth, in the second half of 2021 it struggled with supply-side problems, which in combination with the changeable pandemic situation slowed economic performance. In the light of the Russian invasion and its consequences (supply chain tensions, limited trade flows…), we expect economic growth to slow down this year.

The war in Ukraine will also cause pressure on commodity prices, especially energy and food, and elevated uncertainty. Thus, inflation should reach 9.5% on average in 2022, with deceleration to 5% in 2023. Moreover, the new situation will also affect the fiscal stance, where we can expect higher fiscal needs due to humanitarian and defence spending. The fiscal deficit may reach 6% this year, delaying the necessary fiscal consolidation after the pandemic crisis.


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General information

AuthorErste Group Research
Date2022/03/11
Languageen
Product nameCEE Country Macro Outlook
Topic in focusFX, Macro/ Fixed income
Economy in focusSlovakia
Currency in focusEuro
Sector in focus-
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