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Commission Report 2002 (Slovakia)
Since the crisis in 1998, Slovakia has restored macroeconomic
stability, although imbalances have re-emerged. After the macroeconomic
situation had become unsustainable in 1997-1998, the government implemented a
restrictive fiscal stance and managed to more than halve the current account
deficit in 1999-2000. Concomitantly, real GDP growth dropped to 1.3% in 1999
but has steadily been accelerating since. Inflation has been reduced well
into the single-digit range. Unemployment has risen significantly, mainly as
a consequence of the temporary growth slowdown, accelerated enterprise
restructuring and shortcomings in the functioning of the labour market.
Starting in 2001, fiscal policy has become increasingly expansionary again
and considerable trade and current account deficits have re-emerged. Slovakia
has already implemented a number of structural fiscal reforms, but many
necessary measures, especially on the expenditure side, still lie ahead. The
severity of the current account deficit is mitigated by the way it is
financed, a recent increase in foreign currency reserves, and, at least in
2001, by the high underlying growth in investment spending taking place in a
fundamentally improved structural environment. However, investment has since
moderated and consumption has become the dominant factor behind growth, with
corresponding implications for the composition of imports and the
sustainability of the current account deficit.
|
Main Economic
Trends |
|
Slovak Republic |
|
1997 |
1998 |
1999 |
2000 |
2001 |
Average |
2002 latest |
|
Real GDP growth rate |
5.6 |
4.0 |
1.3 |
2.2 |
3.3 |
3.3 |
3.9 Q1 |
|
|
Inflation rate |
|
|
|
|
|
|
|
|
| -
annual average |
6.0 |
6.7 |
10.8 |
12.3 |
: |
: |
: |
|
| -
December-on-December |
6.3 |
5.7 |
14.1 |
8.4 |
6.41 |
8.2 |
2.02 |
|
|
Unemployment rate |
|
|
|
|
|
|
|
|
| -
LFS definition |
percent |
11.8 |
12.5 |
15.9 |
19.1 |
19.4 |
15.7 |
19.4 Q1 |
|
General government budget
balance |
percent of
GDP |
-5.7 |
-4.7 |
-6.4 |
-12.8 |
-5.6p |
-7.0p |
|
|
Current account balance |
percent of
GDP |
-9.3 |
-9.7 |
-5.7 |
-3.6 |
-8.8 |
-7.4 |
|
|
Million
ECU/euro |
-1,725 |
-1,893 |
-1,088 |
-772 |
-1,960
3 |
-1,488 |
-859 Jan.-May
4 |
|
Gross foreign debt of the whole
economy |
percent of exports of
goods and services |
53.7 |
65.0 |
67.8 |
45.6 |
: |
: |
|
| -
debt export ratio |
Million
ECU/euro |
5,603 |
7,553
5 |
7,707 |
6,978 |
: |
: |
|
|
Foreign direct investment
inflow |
percent of
GDP |
0.8 |
2.6 |
1.6 |
10.9 |
6.3 |
4.4 |
|
| -
balance of payments data |
Million
ECU/euro |
154 |
504 |
306 |
2,317 |
1,414
6 |
939 |
229 Jan.-May
7 |
| Sources:
Eurostat. National sources. OECD external Debt
Statistics |
|
- National
CPI.
- National
CPI.
- Source:
Website of the National Bank.
- Source:
Website of the National Bank.
- Series
break as a result of some technical changes to the definition.
- Source:
Website of the National Bank.
- Source:
Website of the National Bank.
|
Since 1998, Slovakia has made very good progress in improving the
structural underpinning of its economy but the process is not yet finished.
The restructuring and privatisation of the inherited, largely insolvent
public banking sector, which started in 1999, has basically been completed.
In parallel, most remaining non-financial state-owned enterprises have been
privatised. Measures have been taken to create an enabling environment for
sound private sector development and to promote enterprise restructuring,
although further steps are necessary. The legal framework has been
considerably improved. However, the capacity to implement it effectively is
lagging behind. Crucial improvements in the functioning of the labour market
are also still missing. Slovakia's per capita income as a percentage of
the EU average has remained constant and substantial disparities in general
living conditions and unemployment continue to exist within the country. Per
capita income in purchasing power standards as a percentage of the EU average
stood at 48% in 2001. In 1999, its regional distribution varied from 39% in
the East Slovakia region to a very high 95% in the Bratislava region. The
economic activity rate increased slightly from 69% in 1999 to 70.4% in 2001,
while the employment rate declined from 58% to 56.7%. Unemployment rose to
19.4% of the labour force in the first quarter of 2002 from 11.8% in 1997
(labour force survey data). Over the same period, the unemployment rate among
persons younger than 25 increased from 21.7% to 38.9%, the male unemployment
rate from 10.9% to 20.1%, and the female unemployment rate from 12.8% to
18.6%. Long-term unemployed accounted for 58.3% of all unemployed in 2001,
compared with 47.6% in 1999. Given the strong correlation between
unemployment and social conditions, the latter may have somewhat deteriorated
over recent years. However, judging from the limited available data, the
social safety net seems to be providing a cushion against most social
hardships.
|
Main Indicators of
Economic Structure in 2001 |
|
Population (average) |
Thousand |
5,380 |
|
GDP per head1 |
PPS |
11,100 |
|
percent of EU
average |
48 |
|
Share of agriculture 2
in: |
|
|
| -
gross value added |
percent |
4,6 |
| -
employment |
percent |
6.3 |
|
Gross fixed capital
formation/GDP |
percent |
31.9 |
|
Gross foreign debt of the whole
economy/GDP3 |
percent |
33.4 |
|
Exports of goods &
services/GDP |
percent |
75.9 |
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Stock of foreign direct
investment |
|
|
|
Million |
2,801
4 |
|
per
head5 |
521 |
|
Long term unemployment rate |
percent of labour
force |
11.3 |
|
- Figures
have been calculated using the population figures from National
Accounts, which may differ from those used in demographic
statistics.
-
Agriculture, hunting, forestry and fishing.
- Data
refer to 2000.
- Data
refer to 1999.
- Figures
have been calculated using the population figures from National
Accounts, which may differ from those used in demographic
statistics.
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© European Commission; last modified 2003-05-22
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