Page 33 - CE Outlook Regions 2024

EC and local analysts expect the domestic demand to partially recover following state and EU investments accompanied by the projected return to real wage growth in a boost to the economy.
2.4.2 External environment
The balance of foreign Slovak trade was a surplus of €548.1mn in October, marking a ninth consecutive month of positive results contributed to by the combination of a lower volume of imports in energy commodities and the growth on the export side led by the country's key car industry.
The trajectory is expected to remain in place as the car industry benefits from a more stable supply chain environment. In the long term the car industry faces a daunting task of adapting to a more energy- sustainable model.
In contrast to the country’s dominant car and nuclear industries, the SME sector remains underdeveloped, dragging Slovakia down on the level of competitiveness and productivity.
2.4.3 Inflation and monetary policy
Inflation eased to 6.2% y/y in November and the trend is expected to continue, with the EC projecting 10.8% overall for 2023 and 5.2% for 2024.
The easing of inflation towards the end of 2023 already contributed to the lowest depreciation of real wages in the last seven quarters, signalling a much anticipated return to real wage growth in the coming months.
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