Slovakia’s gross domestic product (GDP) at constant prices increased by 1.2% year on year in the third quarter of this year, confirming a continued slowdown after GDP grew by 3.3% in Q1 and 2% in Q2.

“Slovak economy maintained a growth above 1%, but significantly weakened from the beginning of the year,” the country’s statisticians highlighted in their flash estimate of GDP in 3Q, adding that “the growth rate of the economy was the slowest in the last five quarters.”

The volume of GDP amounted to €2bn at constant prices, which is an increase by €330mn y/y. Statisticians credited the “ever-increasing final consumption of households and public administration” for maintaining the economy’s growth while also noting the year-on-year slowdown in investment activity. Total employment stagnated.  

The figures came as a disappointment to local market analysts, who also expect unconvincing performance of the economy in the coming months.

UniCredit Bank analyst Lubomir Korsnak told daily SME that the struggling German industry, which is a key market destination for Slovak exporters does not give reason for optimism and UniCredit lowered its projection of GDP growth next year from 2.2% to 1.6%.

Last month, the National Bank of Slovakia (NBS) lowered the economy growth projection to 2.5% next year after the left-right cabinet of populist Prime Minister Robert Fico approved a bigger than expected €2.7bn consolidation package. The NBS estimates the package will cut growth next year by 0.6pp.

Korsnak also expects the incoming Trump administration to have a negative effect on the Slovak economy amid anticipated customs levies directed at strong export economies such as Germany.

“As an extremely open economy, Slovakia will certainly feel negatively the new customs tariffs, particularly in the automotive industry, indirectly through the slowing down of economic growth of its partners such as Germany and Czechia.

Slovakia is the world’s largest car producer per capita, with several world brands, including Volkswagen, Skoda, Stellantis, Jaguar, Volvo and Kia, produced in the country. Independent NGOs and analysts have long warned the country’s dominant car industry exposes the economy to abrupt global developments.