Country Economic Forecasts > Slovak Republic

The economic data released so far this year have not been entirely convincing. While the EC economic sentiment survey indicator improved in Q1, official hard data on industrial production and exports have been volatile, with January quite weak but February much more robust. Overall, we think that the Slovak economy decelerated in Q1 but still grew by 0.5% on the quarter.However, we expect Slovakia to grow by 3% in 2016 as a whole, driven by rising exports and solid consumer spending (boosted by real wage gains and falling unemployment).The March 2016 elections have resulted in a coalition government. The incumbent Prime Minister Robert Fico has retained office and has managed to achieve a relatively smooth transition, with the coalition recently signing an agreement outlining plans for the next four years. The agreement looks to reduce corporate tax and spend more on education and pensions, reflecting the varying priorities of the different parties in the coalition. To stand a chance of meeting these goals, fiscal targets have been relaxed, postponing budget balance to 2020, two years later than previously planned.