The Slovak Republic overview

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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 with  about EUR  14 million of contributions.  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 2019 2.5%

Current EBRD forecast for the Slovak Republic’s real GDP growth in 2020 2.5%

Domestic demand, particularly household consumption and investment, continued to underpin GDP growth of 4.0 per cent in 2018. However, a slowdown was evident in the first half of 2019, with the economy growing by just 3.0 per cent year on year. Amid weakening external demand in western Europe, export growth lost momentum and reached 3.9 per cent in the first half of the year.

Inflation accelerated to 2.5 per cent in 2018, and further to 3.0 per cent in July 2019. Service price inflation saw the greatest hikes, in line with expectations of rapidly rising wages and positive consumer confidence. External uncertainties are the main risks to further economic growth, especially for the automotive industry, including its SME-led supply base.

GDP growth is likely to continue to be driven by domestic demand, although its strength will moderate. We expect growth to slow to 2.5 per cent in both 2019 and 2020, representing a large downward revision (of 1.1 percentage points in 2019 and 0.8 percentage point in 2020).

Key negative risks include the possibility of a hard Brexit and the eurozone’s economic slowdown. By contrast, improved absorption of EU funds provides potential for an upside.



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