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 13 November 2012

Current EBRD forecast for the Slovak Republic’s real GDP growth in 2016 3.2%

Current EBRD forecast for the Slovak Republic’s real GDP growth in 2017 3.2%

Growth in the Slovak Republic accelerated to 3.6 per cent in 2015, primarily driven by impressively high investment, including in foreign-owned enterprises, as well as household consumption. Investment expenditures grew by 14 per cent last year, at a similar rate as at the beginning of the country’s EU membership almost 12 years ago.

Even though the spike in public investment clearly mirrors an acceleration of utilisation of the EU structural funds from the previous budgetary period, the Slovak Republic only manged to absorb less than 90 per cent of the committed funds by end-2015. Further falling unemployment, deflation and the now rapidly expanding consumer credit further stimulated household consumption.

We expect this trend to persist, in part due to the reduction in the VAT rates for selected food products and the hike in the minimum wage that came into effect this year. Substantial domestic private investments should underpin growth this year and next.

Several large investment projects are about to get under way, such as the Bratislava ring road, as well as the Jaguar car plant, which is expected to start operating by end-2016.

Slovak Republic in the EBRD’s 2015-16 Transition Report