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| The picture of the EU's slow catching up remains unchanged |
| Bratislava, 21.07.2025 |
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| The long-term trend of narrowing the gap between the growth rates of the Slovak and European economies, which became apparent after the global financial crisis, has not yet been broken. This gap has been positive for several years, but it is small. The overall picture of slowing down or even stagnation in catching up with the European Union (EU) level has not changed either. The National Bank of Slovakia (NBS) drew attention to this in the current issue of its annual publication Structural Challenges.
Last year, gross domestic product (GDP) per capita at constant prices in Slovakia grew by 2%, while in the EU by 0.8%. Compared to the new member states that joined the union together with Slovakia in 2004, Slovak growth last year was in third place behind Poland and Lithuania. Looking at the past five years, the growth of the Slovak economy is still slightly higher than the EU average, but it ranks lower among the new member states, behind Poland, Lithuania, Slovenia, Hungary, Latvia and ahead of the Czech Republic and Estonia.
“If we look at economic growth per capita, for example, the Czech Republic may have grown significantly slower in recent years, but it is also much higher in terms of level. But the countries in our region or in the Baltics have grown much more significantly in the past five years,” said Branislav Reľovský, Director of the NBS Cross-Sectional Initiatives Department.
According to the central bank, labor productivity remains key to restarting real convergence. “Despite some improvement in recent years, it is still at a low level compared to the rest of Europe, which has a direct impact on employee compensation and household income,” the NBS warned in a document.
It pointed out that hourly productivity, after a decline in 2022 and only a slight increase in 2023, accelerated last year and significantly contributed to the overall growth of the Slovak economy. This increase was more significant than in the entire EU, which was reflected in a slight reduction in the productivity gap. Nevertheless, its growth in Slovakia remains slower than in the period from 2000 to 2015.
According to the NBS, the challenge for the future remains the need to accelerate the pace of productivity growth. "Especially in the context of an aging population, it is necessary to sustainably reverse the trend of slowing labor productivity growth from the period before the pandemic and to ensure permanent dynamic productivity growth in the long term," the central bank emphasized.
With a tight labor market and the growing consequences of an aging population, it is necessary to achieve this by strengthening investment and innovation activity. However, the share of investment in GDP in Slovakia has been declining for a long time, the NBS pointed out. While before the financial crisis it was well above the EU level and comparable to the Czech Republic or Hungary, in recent years it has been significantly lagging behind these countries. There is room for improvement in all sectors, including households, businesses and public administration.
"Innovation is key to starting the economy or accelerating its catch-up. This is essential for us to be able to turn around our current model and bring a more fundamental impulse to the economy," explained Reľovský, adding that there is certainly room for improving the domestic environment. "The inflow of foreign direct investment in recent years has been very low compared to other countries. So if we look at it only through this lens, we can see that the attractiveness of the domestic environment in the eyes of foreign investors has significantly decreased," he reminded. |
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Address : Euro-Brew Ltd., Hlboká 22, 917 01 Trnava, Slovakia
Tel. : +421 33 53 418 53, Fax : +421 33 53 418 52, E-mail : info@eurobrew.sk |
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