National Bank of Slovakia Warns of Industrial Decline

The National Bank of Slovakia warned that the country's industrial sector is losing competitiveness due to stagnating productivity and labor costs that have risen 54% since 2020. This increase is more than double the European Union average of 22%.

The central bank stated that these cost pressures create a material risk of "premature de-industrialization," which poses a structural threat to the small, export-oriented economy. This trend is evidenced by Samsung Electronics closing its TV production facility and several automotive manufacturers scaling back investments.

Economic growth slowed to 0.7% in the second quarter, down from 0.9% in the previous quarter. While the services sector continues to see productivity gains, the industrial sector's contribution to productivity has turned negative amid global trade uncertainties and domestic fiscal consolidation.