Macroeconomic indicators in Slovakia and the Eurozone

Macroeconomic indicators, such as GDP, unemployment or indebtedness, have a downward trend in Slovakia in the second quarter of this year. For example, the annual GDP growth rate in the second quarter of 2022 was 1.8%, down 7.8% from the second quarter of 2021. A significant negative impact on GDP, and therefore to some extent a reason why there has been such a massive decline, is the persistent decline in value added in financial and insurance activities. Another factor is the decline in Slovakia’s most important industry, namely the manufacture of motor vehicles.

Moving on to the second indicator, namely unemployment, at the end of June 2022, we had an unemployment rate of 6.28% in Slovakia. If we look at June 2021, where unemployment was at a very similar level, 6.9% to be precise, we can say that there has been a more modest decline in this indicator too. With these percentages, Slovakia is approaching the data before the pandemic. Although the downward trend in unemployment has been in place for a longer period, in some sectors and regions, there will probably be no further decline, as we are approaching the natural limits.

As far as indebtedness is concerned, we are also seeing a decline here compared with the figures for the same period in the previous year. From 63.1% in 2021, the percentage Slovakia reached during the pandemic, to the current 62.4%. Although there has been a slight decrease, Slovakia still exceeds the upper limit of government debt which is at 60%. This overshoot has also resulted in a salary freeze for ministers of the Slovak government, which means that the so-called debt brake is coming into force under the Budget Responsibility Act.

Turning to the indicators in the euro area, we can also see a fall in the annual GDP growth rate in the second quarter of this year compared with the second quarter of last year. In 2021, the annual GDP growth rate was 14.4% and this year it was only 4.1%.

The unemployment rate in the Eurozone at the end of June 2022 was 6.7%, down 1.2% compared to June last year. Southern European countries are contributing the most to these figures. The leader in unemployment is Spain, where unemployment this year stands at 14.6%. Another country with high unemployment is Greece, with an unemployment rate of 13.3%.

In the case of the debt ratio, we can also see a slight decrease compared to 2021. In percentage terms, it is 95.7% in 2021 and 95.6% in the current year. The most indebted remain the Greeks, who at the end of the first quarter of this year had a public debt of 189.3% of GDP, followed by the Italians, the Portuguese and the Spaniards. Conversely, the least indebted to the Eurozone countries are Estonians and  Swedes.