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Structural Challenges 2025

Without innovation and inclusion, Slovakia will decline

Kick-starting innovation is essential for competitiveness and growth

  • Economic convergence continues to stagnate
  • Growth in GDP per capita has slightly exceeded the EU average in recent years
  • Prices are converging towards the EU average faster than the economy itself

Public finances remain the biggest weakness

  • Fiscal consolidation has helped somewhat, but it must continue
  • Population ageing and defence expenditure will pose challenges for public finances
  • It is imperative to repair these finances and create a fiscal buffer

Rising poverty, illness and inequality

  • The number of people at risk of poverty or social exclusion has been rising since 2020
  • The situation is worst in Eastern Slovakia, where poverty, material deprivation, and infant mortality are all increasing
  • Health in Slovakia: lagging behind the EU and marked by disparities

Structural Challenges 2025

2.61 MB

Presentation (in Slovak only)

26.91 MB

Data

10.7 MB
If we want to accelerate, we must shift gears

Productivity in Slovakia has grown in recent years, but not quickly enough. To move forward, we need to change our approach. Cheap labour will no longer be the driver – the future lies in ideas, knowledge, and new technologies. Investment in people, research, and education is crucial. Yet it is here that Slovakia is falling behind – both private and public investment are declining, and the country no longer attracts foreign investors as it once did.

Public finances need a buffer for difficult times

Although public finances have improved somewhat, they are still among the weakest in the EU. The population is ageing, defence spending is rising – and all of this will have to be paid for. That is why it is important to repair the budget while there is still time and to create a buffer for tougher times.

Growing disparities between regions and people

Poverty is rising again – especially in eastern Slovakia. The most vulnerable groups are large families, single-parent households, and young women. It is not just an issue of low incomes – material deprivation is also increasing. Unless these problems are addressed, the gap in society will continue to widen.

People’s health affects their future

Slovakia has some of the worst figures in Europe for infant mortality and preventable mortality. People on lower incomes are more likely to forgo seeing a doctor – thus increasing their risk of serious illness. Better prevention and stronger primary care are key to improvement.

The green transition is slowing

Slovakia reports lower greenhouse gas emissions than other countries, but this is due more to the structure of its economy than to deliberate policy. Air pollution remains a problem, and the transition to a net-zero economy is proceeding slowly. The solution is to make better use of EU funds available from the Recovery and Resilience Facility (via Slovakia’s recovery and resilience plan) and the Modernisation Fund – in a way that eases the burden on households and regions.

Also in this edition

Trade fragmentation: The world is changing. More tariff barriers and less certainty in global trade pose a risk to countries like Slovakia, which are highly integrated in global value chains. The solution lies in reforms and fiscal discipline.

Generational living standards: Millennials may earn more than their parents, but their position in society is worsening. Their chances for upward mobility are lower, and gender inequalities persist.

What are structural challenges and why do we monitor them?

This annual publication systematically maps the main barriers to Slovakia’s long-term growth – from low productivity and sluggish innovation to population ageing, poor health outcomes, and institutional weaknesses.

Národná banka Slovenska produces this report because these factors have a major bearing on how effectively monetary policy is transmitted into the economy under euro area conditions, and on the room for manoeuvre in maintaining price and financial stability. By identifying and quantifying structural obstacles, NBS highlights reforms that can strengthen the country’s growth potential and increase resilience to future shocks.