The economy of the Slovak republic at the beginning of 2024: record GDP growth and challenges in the labor market

The economy of the Slovak Republic entered 2024 with a significant improvement in its performance. Based on the latest data on gross domestic product (GDP) and employment, we can state that the first quarter of this year brought positive results, accompanied by certain challenges.

GDP Growth

Gross domestic product (GDP) at constant prices grew by 2.7% year-on-year in the first quarter of 2024, representing the fastest growth in the last eight quarters. This GDP increase is the result of more dynamic quarterly and year-on-year growth, indicating strong economic activity in the country.

The GDP value at current prices reached 29.8 billion euros, representing a year-on-year increase of more than 2.2 billion euros. When converted to constant prices, the GDP value reached 21.9 billion euros, which is 583 million euros higher year-on-year.

Causes of growth

The GDP growth was primarily supported by a significant year-on-year increase in final consumption. Particularly notable was the rise in household consumption, a key indicator of consumer confidence in the economy. The growth in public administration consumption was also important, indicating increased public spending on infrastructure, education, and healthcare.

Investments also played a crucial role in GDP growth. Increased capital expenditures by businesses indicate confidence in future economic conditions and growth potential. The export sector also contributed to the growth, especially due to increased demand for Slovak products in foreign markets.

Employment and the Labor market

Total employment in the Slovak Republic in the first three months of 2024 reached 2.419 million people, representing a year-on-year decrease of 0.2%. The number of employed persons, after seasonal adjustments, decreased by 0.3% both quarter-on-quarter (compared to the 4th quarter of 2023) and year-on-year. This slight decline in employment suggests certain challenges in the labor market, which could be caused by structural changes in the economy or temporary factors affecting some sectors.

Despite the overall decline in employment, some sectors experienced job growth. In particular, the technology sector, healthcare, and education showed increased demand for labor, indicating the growing importance of these industries for the Slovak economy.

A graph is attached to illustrate these data, providing a visual overview of GDP growth and changes in employment.

The economy of the Slovak Republic at the beginning of 2024 experienced significant performance improvements, mainly due to GDP growth supported by increased consumption and investments. However, the slight decline in employment highlights the need for continued labor market monitoring and measures to support job creation. The overall picture suggests optimistic prospects for the Slovak economy, but also challenges that will need to be addressed in the coming months.