Trade wars, the situation in Ukraine, geo‑economic fragmentation, the slowdown of key EU economies, and slow (geo)political decision‑making—often caused by fragmentation within the EU itself—are the central macro‑drivers shaping today’s dynamic global context.
Germany—on which Slovakia is heavily dependent for the third year running—is stagnating. The export sector faces pressure from high energy prices, the green transition, and demographic shifts. A deindustrialization trend could have uncertain outcomes. Similarly, France, the EU’s second-largest economy, has been warned that it is heading toward economic crisis if it fails to reduce its deficit.
The National Bank of Slovakia reported at the end of 2024 that Slovak exports were below expectations, as Germany’s weak growth drags Slovakia down. Prospects for the coming years remain bleak unless Germany changes its economic model—especially in the automotive sector. While Goldman Sachs downgraded European carmakers, the European Commission has launched a strategic dialogue on the future of the European automotive industry. Although Germany, Italy, and Ireland account for 55 % of EU exports to the US, American auto tariffs would pose a serious shock to German OEMs—and by extension Slovak industry. The Institute for Financial Policy estimates that US demand accounts for ~2.4 % of Slovakia’s GDP and supports 70,000 jobs (10 % of value added, 9,000 jobs in the auto sector). High tariffs on automotives would thus be a major negative shock for Slovakia.
Outlook for Global and Slovak Trade
The Slovak Chamber of Commerce and Industry expects the first half of this year to reflect the effects of consolidated fiscal measures (VAT rates, transaction tax, and rising inflation), with foreign trade development likely turning negative.
The Council for Budget Responsibility projects Slovak export growth of 3.3 % in 2025, 3.2 % in 2026–2027 and 3.0 % in 2028. Key risks include weaker foreign demand (especially from China and Germany), trade wars, difficulties in absorbing recovery plan funds, declining domestic competitiveness, lack of innovation and demographic trends.
Since 2019 Slovakia’s export geography has seen little change. The Council of Slovak Exporters notes that exports remain heavily concentrated in EU markets, and commodity structure remains stable. Passenger vehicles, trucks, and auto parts remain the dominant export group, with up to 20 % of exports going to Germany in 2023 and nearly 40 % comprising vehicle-related exports.
About 93 % of Slovakia’s foreign investment originates from EU countries, the UK, and the US. The Industry and Transport Association highlights that neighboring states offer more stable and favorable business environments. Central and Eastern Europe scores high on economic openness—Baltic states and the V4 region are notable for high export‑to‑GDP ratios. Slovakia ranks as the 8th most open economy globally. Regional strategy shouldn’t focus solely on security, but also on preserving trade liberalization based on mutually beneficial free‑trade agreements within the EU.
What Are the Responses?
In 2022, IMF Managing Director Kristalina Georgieva outlined four key priorities to restore confidence in the global system:
- Reduce trade barriers, mitigate shortages, reduce prices, and diversify exports.
- Intensify cooperative efforts to manage debt.
- Modernize cross‑border payments.
- Address climate change through green transition and investment in renewables.
Territorial and commodity export diversification speaks for itself. World Bank forecasts for 2025 project the highest GDP growth in South Asia (6.2 %), East Asia (4.6 %), Sub‑Saharan Africa (4.1 %), and the Middle East (3.4 %), while Western Europe and the US are expected to grow ~1.7 %. Among countries, the fastest growth rates are expected in South Sudan (27 %), Guyana (14.4 %), Libya (13.7 %), and Senegal (9.3 %).
A February study by Boston Consulting Group notes that global trade patterns are undergoing fundamental shifts. North America is reducing dependence on China, China is strengthening ties with developing markets, and the Global South—driven by nations like India and Southeast Asia—is rising as a key force in global supply chains. Developing countries are climbing the industrial hierarchy.
Positive momentum is emerging: 2025 has seen several international business missions at state level. Slovakia’s prime minister is planning visits to Central Asia, the Middle East, and Vietnam. Last year, the number of economic diplomats increased from 17 to 43. Yet countries like the Czech Republic are already hiring specialized diplomats in sectors such as innovation or agriculture in Beijing and Washington. The Czech Republic hit a record in foreign trade, surpassing CZK 200 billion exports for the first time. Czech exports are diversifying away from Germany and Austria. Scandinavian countries began moving their embassies from Europe to Africa and Southeast Asia a decade ago. Slovakia must take similar steps: focus on dynamic new markets, adapt its economy to new trends, and attract capital from regions where it is abundant.
Italy and France serve as inspirations: Italy signed a US$40 billion investment deal with the UAE in February—the largest in its history—boosting sectors like energy, AI, telecoms, and defense. It also secured a US$10 billion agreement with Saudi Arabia focusing on infrastructure, energy, defense, sports, and tourism. France is attracting US€ 30–50 billion into a massive AI data‑center project. A key issue remains investment security: recent research underscores the importance of NATO membership for trade flows, highlighting economic benefits of expansion and warning of risks from weakening alliances.
Opportunities
Our region has potential if it builds on strengths like nuclear energy and the transformation of automotive industry. According to the latest World Bank EU report, exports of clean‑energy technologies (heat pumps, solar panels, EV batteries, wind turbines) from Central and Eastern Europe—particularly Croatia, Bulgaria, Romania, and Poland—could triple in the coming years.
Ukraine’s reconstruction offers another opportunity: it will require US$524 billion, spanning critical sectors like energy, housing, transport, commerce, and education. Reconstruction of Gaza is estimated at US$52 billion, including housing, industry, infrastructure, health, transport, and water.
While initial macro challenges may appear bleak, each negative turns into opportunity if properly identified and seized. A bottom‑up approach requires deeply understanding exporters’ needs, listening, and mapping current conditions. The next step is delivering a professional state service—fast, high-quality, targeted support for exporters. With that synergy, the third step is planning, adaptation, foresight and evaluation of emerging risks and opportunities from current geopolitical and geo-economic trends, designing appropriate policies.
Author: Filip Šandor, Faculty of Natural Sciences, Comenius University, Bratislava
