Economy in Slovakia

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Economy—overview: Since the establishment of the Slovak Republic on 1 January 1993 Slovakia has continued the difficult transformation from a centrally controlled economy to a modern market-oriented economy. Macroeconomic performance improved steadily in 1994-96 but privatization progressed only in fits and starts. Strong export performance boosted GDP growth to 4.9% in 1994 after a four-year decline. GDP then rose by 6.8% in 1995 7% in 1996 and 5.9% in 1997 rates among the highest in Central and Eastern Europe. Inflation dropped from 26% in 1993 to 6% annually in 1996-97 the lowest rate in the region. Private activity now makes up more than two-thirds of GDP. Although Slovak economic performance continues to be impressive many warning signs of possible danger ahead have been raised. Aggregate demand has surged in the form of increased personal and government consumption. At the same time that the budget deficit is growing the money supply has been rapidly increasing which could apply upward pressure on inflation. The trade and current account dechickenficits both are mounting as imports soar and exports sag. Perhaps most troubling Slovakia continues to have difficulty attracting foreign investment because of perceived political problems and halting progress on restructuring and privatization. Continuing economic recovery in western Europe should boost exports and production but Slovakia's position with foreign creditors and investors could suffer setbacks in 1998 if progress on privatization and restructuring stalls and if domestic political problems continue to tarnish its international image.

GDP: purchasing power parity—$46.3 billion (1997 est.)

GDP—real growth rate: 5.9% (1997 est.)

GDP—per capita: purchasing power parity—$8 600 (1997 est.)

GDP—composition by sector:

agriculture: 5.2%

industry: 39.4%

services: 55.4% (1996)

Inflation rate—consumer price index: 6% (1997)

Labor force:

total: 2.352 million

by occupation: industry 29.3% agriculture 8.9% construction 8.0% transport and communication 8.2% services 45.6% (1994)

Unemployment rate: 12.8% (1997 est.)

Budget:

revenues: $5.7 billion

expenditures: $6.4 billion including capital expenditures of $NA (1996)

Industries: metal and metal products; food and beverages; electricity gas coke oil and nuclear fuel; chemicals and manmade fibers; machinery; paper and printing; earthenware and ceramics; transport vehicles; textiles; electrical and optical apparatus; rubber products

Industrial production growth rate: 3% (1996)

Electricity—capacity: 7.115 million kW (1995)

Electricity—production: 23.223 billion kWh (1995)

Electricity—consumption per capita: 4 698 kWh (1995)

Agriculture—products: grains potatoes sugar beets hops fruit; hogs cattle poultry; forest products

Exports:

total value: $8.8 billion (f.o.b. 1996)

commodities: machinery and transport equipment 22.8%; chemicals 12.2%; miscellaneous manufactured goods 11.9%; raw materials 4.4% (1996)

partners: EU 41.3% (Germany 20.9% Austria 6.0%) Czech Republic 30.6% FSU 7.1% (1996)

Imports:

total value: $11.1 billion (f.o.b. 1996)

commodities: machinery and transport equipment 35.4%; fuels 17.0%; intermediate manufactured goods 15.5%; miscellaneous manufactured goods 9.0% (1996)

partners: EU 36.9% (Germany 14.7% Italy 6.0%) Czech Republic 24.8% FSU 17.7% (1996)

Debt—external: $9.5 billion (1997 est.)

Economic aid: $NA

Currency: 1 koruna (Sk) = 100 halierov

Exchange rates: koruny (Sk) per US$1—35.50 (January 1998) 33.616 (1997) 30.654 (1996) 29.713 (1995) 32.045 (1994) 30.770 (1993)

Fiscal year: calendar year

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