However, there are compelling reasons to believe that we're on a path of accelerated growth and convergence, although the country is unlikely to manage this as fast as some of its CEE-peers (Central and Eastern Europe).
Over the past four years, we've witnessed an average asset growth rate of around 7.8% annually, which, while certainly impressive, is significantly below what some of Slovakia’s neighboring countries have been able to achieve.
Outlook to 2030
Our projections suggest that this robust growth is probably to continue in the coming years. We anticipate an annual growth rate of approximately 7.3% until 2030, driven by two key factors:
organic growth from asset performance (estimated at 5.4% annually)
and a convergence factorcoupled with increased financialization of the Slovak economy (contributing around 1.9% annually).
This projected growth is underpinned by Slovakia's economic fundamentals. We expect nominal GDP (Gross domestic product) to grow by 4-5% annually until 2030, providing a solid foundation for the asset management sector. The high correlation between asset growth and GDP growth that we've observed is likely to persist, albeit to a lesser degree as the market matures.
Given these growth projections, we anticipate a significant narrowing of the gap between Slovakia's asset management market and the European average over the next 15-20 years. While full convergence to the 40-80% assets-to-GDP ratio may not be achieved within this timeframe, substantial progress is expected. In case the not too overwhelming savings ratio in Slovakia would increase, there is some upside to our current asset management industry forecasts. Moreover, the propensity to invest into the (local) real estate market may also decline a bit going forward.
This document has been produced by Raiffeisen Bank International AG, Am Stadtpark 9, A-1030 Vienna/Austria
Supervisory Authorities: Austrian Financial Market Authority (FMA), Austrian National Bank, European Central Bank within the Single Supervisory Mechanism (SSM).
Imprint according to the Austrian Media Act: Media Owner and Publisher is Raiffeisen Bank International AG
This document constitutes neither investment advice, an offer or a recommendation nor an invitation to execute a transaction. Past performance is no reliable indicator of future results. The information presented does not constitute binding tax, financial or legal advice.
This document is based on the knowledge the persons preparing the document have obtained up to the date of creation. Errors and misprints excepted.
As of October 2024