Slovakia’s industry faces de-industrialization risk, central bank warns

Slovakia’s manufacturing sector faces a growing risk of de-industrialization, the National Bank of Slovakia (NBS) warned in its latest assessment. The central bank cited structural weaknesses, rising global competition, and elevated energy costs as key threats to the country’s industrial base.

The NBS noted that Slovakia’s heavy reliance on energy-intensive industries, such as automotive manufacturing, has left the sector vulnerable to external shocks. Persistent cost pressures, including higher electricity and gas prices, have eroded competitiveness, while foreign investors increasingly favor lower-cost alternatives in Central and Eastern Europe.

Industrial output growth has slowed in recent quarters, reflecting broader challenges in the sector. The NBS emphasized that without targeted policy interventions, the trend could accelerate, leading to job losses and reduced economic resilience. The automotive industry, a cornerstone of Slovakia’s economy, has been particularly affected by shifting supply chains and declining demand for combustion-engine vehicles.

The central bank called for structural reforms to modernize infrastructure, improve energy efficiency, and attract high-value-added industries. It also urged closer cooperation between government, businesses, and financial institutions to mitigate the risks of de-industrialization and support long-term economic stability.