The Slovak economy rose by 2% last year, its progress was the fastest in the last three years

The economy of the SR and the GDP indicators in the last quarter and in total for the year 2024 were significantly helped by household and government administration consumption. On the contrary, it was hampered by the slump in investment activities. Among the sectors, it was mainly supported by a moderate growth in industry and trade with transportation and tourism. In the structure of the economy, all 10 groups of sectors managed to increase performance compared to 2023.

Gross domestic product (GDP) increased by 1.8% year-on-year (at constant prices, seasonally unadjusted) in the 4th quarter of 2024. The growth rate exceeding 1% was maintained in all quarters during 2024, at the end of the year it was the second lowest value. The volume of GDP at current prices was higher by 4.8% year-on-year and reached EUR 33.9 billion. After seasonal adjustment, GDP was higher by 0.5% quarter-on-quarter (compared to the 3rd quarter of 2024) in real terms.

According to the ESA 2010 methodology, GDP is quantified in three ways (production method, expenditure method, income method). Considering the available sources of information, the production method is decisive for the Slovak Republic.

Production method

The performance of the manufacturing sectors, expressed in gross added value, slowed down significantly year-on-year in the 4th quarter. The volume of gross added value in real terms at constant prices reached EUR 24.1 billion which was an identical value as a year ago, in the 4th quarter of 2023.

Growth in gross added value was recorded by 3 out of 10 monitored groups of sectors. Industry, which is the most important production sector with almost a quarter share, had the greatest impact on the overall result. This key sector maintained its growth above 2% mainly due to the year-on-year growth of metal production by 8%, manufacture of machinery and equipment by 6.4%, other manufacture with repair and installation of machinery by almost 15%. A quarter of the added value of the sector was created by the most important manufacture of transport equipment. However, its performance was identical as at the end of 2023. The only sector that hampered the results of the industry was an almost 27% decrease in manufacture of coke and petroleum products.

Other components in the GDP structure with a year-on-year growth were also financial and insurance activities, as well as agriculture.

The dampening effect on the performance of the economy was mainly a drop in the second most important sector - trade, transportation, accommodation and food services1) by 2.5%, but also in information and communication by 3.8%, construction by 1.3% or real estate activities by 0.9%. The increase in net taxes by 21.5% was also significant.

Expenditure method

GDP growth also in the 4th quarter of 2024 was significantly affected by year-on-year higher consumption by households by 2.7%, as well as higher consumption of government by 2.1%. The performance of the economy was thus supported by the fact that households and the public sector did not save at the end of the year

On the contrary, investment activity, measured by the gross fixed capital formation, dropped significantly by 11.5%. The economy recorded its decline for the second consecutive quarter.

Both exports (foreign demand) and imports of products or services remained at the same year-on-year level, the balance of foreign trade at current prices remained slightly negative.

Development of the Slovak economy for 2024

During 2024, the Slovak economy rose the fastest since 2021, GDP at constant prices increased by 2%. It was significantly affected by a dynamic performance in the first half of the year. The volume of nominal GDP (at current prices) reached almost EUR 130 billion.  At constant prices it slightly exceeded the value of EUR 100 billion for the third consecutive year.

For the year 2024, the performances of almost all structures of the economy rose. The gross added value (according to the production method) increased by 1.4%, the year-on-year increase was recorded by all 10 monitored groups of sectors. The most significant impact was apparently the growth of industry by 1.7%. In the structure of the industry, production in 6 out of 13 sectors rose decisively, the most significant was metal production by 7.7%, manufacture of transport equipment by 3.8% and manufacture of food by 5.8%. On the contrary, higher growth was dampened by the decline, for example, in manufacture of rubber and plastic products by 2.3%, manufacture of coke and petroleum products by 12.9% and in manufacture of computer products by 5.4%.

The growth of added value in professional, scientific and technical activities by 2.5% and in financial and insurance activities by 8.5% also had a positive impact on the growth of the economy. Very moderate growth was also maintained in trade, transportation, accommodation and food services1) by 0.8%. Net taxes increased by more than 8% for 2024.

Within the expenditure method, the most significant impact on the overall result of the economy was an increase in household consumption by 2.6%, as well as consumption of government by 3.6%. Household consumption managed to grow again after a slowdown in 2023, when it dropped by 3.1%. The government sector recorded an expense growth after two years of declines. Again higher spending by households and the public sector was mainly a consequence of the drop in inflation during 2024

The loss of investment dynamics had a significant dampening effect on the GDP result. Lower investments were reflected in a decrease in gross fixed capital formation for 2024 by 4.1%. This slowdown was replaced by strong investment growth above 16% in 2023.

The level of stocks in current prices dropped for the second consecutive year, in 2024 by almost EUR 1.1 billion. However, this decrease was significantly lower than in 2023.

The economy was also helped by a moderate growth in foreign trade. Export of products and services (foreign demand) had year-on-year in positive values by 1% and import of products and services by 2.5%. In the annual balance, exports exceeded imports, the performance of the economy was also supported by a positive balance of foreign trade at the level of more than EUR 780 million (at current prices).