Slovakia's economy grows by only 0.8%: Retail sales rise by 2.3%, and industrial production by 0.3%

The Slovak economy grew by 0.8% year-over-year in the second quarter, according to a report released by the Statistical Office of the Slovak Republic (Štatistický úrad SR) on September 4. Compared to the first quarter, it increased by 0.2%. The TASR news agency reports: “The growth rate has been below 1% for six consecutive quarters.”

Consumer spending and government spending provide support, while investment weakens

Households spent 0.6% more, following a 1.1% increase in the first quarter. Government spending rose by 1.7%, following a 0.4% decline in the first quarter. Gross fixed capital formation fell by 0.3%. Exports grew by 3.0%, and imports by 3.7%. Foreign trade closed with a surplus of over 0.5 billion euros, the highest figure since the first quarter of 2024.

Trade, transportation, and hospitality grew by 2.3%. These sectors account for 21.8% of gross value added. Industrial output grew by 0.3%. Economic output at current prices totaled just under 36 billion euros.

The labor market is cooling off. Erste Group reports an unemployment rate of 5.6% for the second quarter, 0.3 percentage points higher than the previous year. Total employment fell by 0.5%, and by 4.5% in the industrial sector. The average wage rose by 3.2% to 1,707 euros. Real wages fell by 0.5%—the first decline in two and a half years.

Consumer prices rose by 3.1% in August, following a 3.3% increase in July. Core inflation fell to 1.5%, the lowest level since February 2021.

Manufacturing: Cars Lead the Way, Electronics Slump

Industrial production grew by 2.4% year-over-year in July. Ten out of 15 industrial sectors saw increased output. Automotive production rose by 9.2%, partly because factory holidays were rescheduled. Mechanical engineering grew by 11.9%. Production of computers and electronics fell by 41%, while petroleum processing declined by 17.8%. On a seasonally adjusted basis, production fell by 0.7% compared with June.

The auto industry remains the core sector. The manufacturers’ association ZAP reported approximately 1.07 million vehicles built in 2025, 7.7% more than in 2024. ZAP President Alexander Matusek set a condition in November 2025: “To maintain the transition of production to electric mobility, the government must create the necessary framework conditions.”

Erste Group expects growth of 1.0% for 2026 and 1.7% for 2027. It sees downside risks.

For German exporters and investors, this means: Slovakia is growing slowly, and the industry is cutting jobs. Suppliers to the auto plants are seeing stable demand, but no growth spurt. The consumer market is gaining hardly any purchasing power because real wages are falling.

Sources: Štatistický úrad SR (SK/EN), TASR (EN), Erste Group Research (EN), ZAP Manufacturers’ Association (EN)

SK, Frankfurt