The Slovak economy may have peaked in 2018 at 3.3% GDP growth, but the battle for employees is still so fierce that wages are rising more quickly than ever. The country’s central bank isn’t overly concerned for the immediate future, predicting that growth will slow to 3.2% in 2020. But the outlook for 2021 is just 2.8 percent as domestic demand is expected to come off the boil, with the central bank’s governor Peter Kazimir blaming the slowdown on a global cooling off. This will result in falling levels of direct foreign investment and a reduction in the country’s ability to produce new growth. Long-term growth, he warned can only be achieved by investing more in labor productivity and in the quality of the country’s education system. Inflation is expected to hover at between 2.5 and 2.6 percent for the next couple of years.
