The Slovak Republic overview

Cityscape at night

In the Slovak Republic we focus on:

Deepening financial intermediation and support for SMEs. The EBRD’s engagement in the financial institutions sector is focussed on further enhancement of the availability of credit finance to small and medium-sized local enterprises as well as to small municipalities with an emphasis on deepening financial intermediation to SMEs in the less developed regions of the country. The EBRD also seeks to expand programmes implemented through commercial banks providing funding and expert assistance for small energy efficiency and renewable energy investments. We are also pursuing opportunities with financial intermediaries on equity and mezzanine financing.

Supporting investments in infrastructure, energy security and energy efficiency. The EBRD is supporting the development of viable financing structures to secure long term financing for projects in the commercial infrastructure sector through co-operation with other IFIs and private sector participants. We are promoting the diversification of energy supply with a focus on renewable energy sources and energy efficiency throughout sectors to enhance energy security, reduce energy intensity and meet EU environmental targets.

Support cross border co-operation and investments of leading local entities in other countries of EBRD operations in order to enhance their regional presence.

As well as being a country where the EBRD works, the Slovak Republic is also an EBRD donor.  In 2015 the Slovak Republic approved financing totalling about €3.1 million for assignments, including €1 million each to the Sustainable Resource Initiative Policy Dialogue Framework and the Municipal and Environmental Infrastructure TC Framework Facility.  It also participates in two multi-donor funds including the Western Balkans Investment Framework and the Eastern Europe Energy Efficiency and Environment Partnership (E5P) Fund. For the Slovak Republic it is particularly important to develop the potential for energy efficiency in the region, which will contribute to energy security and economic competitiveness.
The EBRD’s latest strategy for the Slovak Republic was adopted on November 2017

Current EBRD forecast for the Slovak Republic’s real GDP growth in 2017 3.3%

Current EBRD forecast for the Slovak Republic’s real GDP growth in 2018 3.5%

Economic growth in the Slovak Republic slowed somewhat from 3.9 per cent in 2015 to 3.3 per cent in 2016, but still remained the strongest in central Europe and the Baltic states in 2016. Solid employment growth, rising disposable incomes and double-digit growth in credit to households supported strong private consumption. In contrast, investment expenditures declined by 8 per cent in 2016 and continued to fall over the first six months of 2017 (declining by 3.4 per cent) ,as the drawing of EU funds has been sluggish. During the first half of 2017, economic growth reached 3.2 per cent year-on-year.

Shortages of qualified labour have been a problem for some time in the automotive industry and are now slowing the development of the IT industry, which is located in the eastern part of the country and where the unemployment rate remains high, at 13.2 per cent in 2016. Overall, the national unemployment rate fell to 7.5 per cent in August 2017, but increasing labour shortages are putting more and more pressure on wages, which increased year-on-year by 4.2 per cent in nominal terms in the first half of 2017. A rapidly declining working-age population is also a threat to the Slovak Republic’s development model.

In 2017 GDP growth is forecast to reach 3.3 per cent, rising to 3.5 per cent in 2018. Risks to the outlook constitute a weaker-than-anticipated recovery in the Eurozone as well as slow absorption of EU funds.