Slovakia's Economy Takes a Hit: Credit Outlook Dims as Threats Grow

On Friday, Standard & Poor’s confirmed Slovakia’s A+ sovereign credit rating but changed the outlook from stable to negative, citing potential risks posed by escalating global trade tensions to the country’s export-oriented economy.

In Bratislava, the announcement sparked a sense of cautious optimism as the Finance Ministry pointed out that Slovakia’s credit rating still stands two levels higher than those given by Fitch and Moody’s. The ministry stated, "The positive development is that Slovakia continues to hold an A+ rating." Nevertheless, they also highlighted that the looming specter of potential global trade conflicts is negatively impacting the country’s economic forecast.

S&P commended Slovakia's government for their initiatives aimed at reducing public expenditure in its evaluation. They anticipate that the nation's budget shortfall will decrease to 4.7% of GDP by 2025, aligning with the state budget ratified towards the conclusion of the previous year. In the near future, the administration plans to unveil its third fiscal tightening measure for 2026. Additionally, the organization projected an economic expansion of 1.6% in 2025 followed by a slower pace of 1.3% in 2026, primarily spurred by EU-funded investment projects and the implementation of the recovery strategy.

Nevertheless, experts cautioned that Slovakia’s significant dependence on automobile exports, especially to Germany and the United States, makes it very susceptible to disturbances in international trade. "We have changed our forecast to negative because Slovakia heavily relies on exports, and the auto sector could be impacted by worldwide trade conflicts," stated S&P, highlighting increasing doubt about possible tariff actions from Washington in the upcoming months.

Finance Minister Ladislav Kamenický from the Smer party aimed to present the updated forecast as an outcome of worldwide turbulence instead of shortcomings at home. "Securing an A+ rating even with the most challenging financial situation among EU countries stands as good news," he stated. He further noted, "This adjustment is due to outside influences, not decisions made by our administration." This statement overlooked the role played by earlier administrations led by his own party in worsening Slovakia’s economic condition.

According to the finance minister, ratings from Fitch and Moody’s are anticipated in May and June respectively. Kamenický, who was highly critical, criticised Moody’s in December Following the downgrade of Slovakia to A3 with a stable outlook, the agency was accused back then of delivering an assessment that was politically influenced and prejudiced.

"I firmly believe that political activities impacted Moody's rating, potentially harming the credibility of their organization," Kamenický stated in a Facebook post dated December 16, 2024. According to him, the Finance Ministry had previously presented comprehensive objections before the credit downgrade, highlighting issues such as politicking and discrepancies within the debt information; however, these concerns were disregarded by Moody’s.

“He stated they implemented no alterations,’ adding, ‘What you should infer from this is left entirely up to your imagination.’”

Kamenicky has subsequently communicated with the agency, though he continues to be skeptical. "If somebody creates a rating based on political opinions they encountered in liberal media outlets, I find it unacceptable," he says. said On Sunday, April 27th, 2025.

The most recent decision by S&P was praised by Prime Minister Robert Fico, who expressed disappointment with the local media for barely covering the news. Despite the negative outlook, Fico emphasized that Slovakia does not bear responsibility for this development.

"This outcome stems from worldwide occurrences, not something we initiated," Fico stated on Sunday.