Slovakia

Economic and political outline

Economic indicators | Foreign Trade in figures | Sources of economic information | Political outline

Economic indicators

Since 2000, Slovakia has been experiencing a sustained and steady GDP growth rate induced by the progress of integration into the European Union (it joined the EU in May 2004). Foreign direct investment (FDI) in Slovakia has increased dramatically, more than 600% since 2000. Earlier due to the privatization of the banking, energy and telecommunication sectors, the FDI inflows have been more recently encouraged by a business-friendly taxation system and the availability of a cheap and skilled labour force. The country also benefits because of its advantageous geographical position; being located at the crossroads of Central Europe. The rate of inflation is under control and the budgetary deficit is decreasing driven by some major structural reforms implemented within the process of integration into the Euro zone in January 2009. But on the other hand, these reforms have also disavantaged domestic demand and lowered the potential of economic growth. The GDP growth rate was 4.4% in 2006, 2.4% in 2007 and the forecasts are 2.0% for 2008.

GDP Indicators	2006	2007	2008	2009	2010
GDP (billions USD)	56.05	74.99	100.57e	n.c.e	n.c.e
GDP (constant prices, annual % change)	8.5	10.4	7.3e	4.0e	5.6e
GDP per capita (USD)	10,357.08	13,857.47	18,584.56e	n.c.e	n.c.e
General government balance (in % of GDP)	-3.5	-2.0	-2.1e	-2.0e	-1.5e
Inflation rate (%)	4.5	2.8	4.4e	2.8e	2.8e
Unemployment rate (% of the labor force)	13.3	11.0	9.7	9.4	9.0
Current Account (billions USD)	-3.92	-4.00	-4.92e	-3.74e	-2.17e
Current Account (in % of GDP)	-7.1	-5.3	-5.0e	-4.1e	-2.2e

Source: IMF - World Economic Outlook Database; OECD - Economic Outlook n°84

Note: (e) Estimated data

Socio-demographic indicators	2008	2009	2010
Unemployment rate (%)	9.7	9.4	9.0

Main sectors of industry

The agriculture sector is not much developed in Slovakia and accounts for less than 3.5% of GDP. The main agricultural products in the country are cereals, potatoes, sugar beets and grapes. The mountainous part of Slovakia has vast forests and pastures (used for intensive sheep grazing), and is rich in mineral resources including high-grade iron ore, copper, lead, and zinc. The heavy industrial sectors like metal and steel are still going through a phase of restructuring. High value-added industries like electronics, engineering and petro-chemistry are set up in the Western part of Slovakia. Sectors like automobile and consumer goods offer attractive opportunities to foreign investors. Fuelled by huge foreign investments in the automobile sector since 2006 Slovakia produces a great number of vehicles.
The services sector represented 64.2% of GDP in 2007, dominated by commerce and real estate. This figure shows how the Slovak economy is moving into the tertiary sector.

Breakdown of economic activity by sector	Agriculture	Industry	Services
Value added (annual % change)	-19.5	14.0	9.5
Value added (in % of GDP)	2.9	37.0	60.2
Employment by sector (in % of total employment)	4.7	38.8	56.3

Source: World Bank - World Development Indicators - last available data.

Monetary indicators	2003	2004	2005	2006	2007
Average annual exchange rate for 1 USD	36.77	32.26	31.02	29.70	24.69

Source: World Bank - World Development Indicators

Foreign trade in figures

The share of foreign trade in the country’s GDP has reached more than 160%. Because of high energy imports from Russia, as well as substantial imports of machinery and electric & electronic equipment used in its growing automobile and energy sectors Slovakia’s imports remain very high resulting in foreign trade deficit. Nevertheless, dynamics in the services sector and newly found potential regarding exports of cars is definitely going to reverse the trend. The country's top three import partners are Germany, the Czech Republic and Russia. Its top three export partners are Germany, the Czech Republic and Austria. The main commodities exported from Slovakia are vehicles, electric & electronic equipment, machinery, iron & steel, and mineral fuels & oils. The automobile sector is the largest export-oriented sector in the country.

Foreign trade indicators	2003	2004	2005	2006	2007
Imports of goods (millions USD)	22,593	n.c.	n.c.	n.c.	n.c.
Exports of goods (millions USD)	21,944	n.c.	n.c.	n.c.	n.c.
Imports of services (millions USD)	3,056	0	0	0	0
Exports of services (millions USD)	3,297	n.c.	n.c.	n.c.	n.c.
Imports of goods and services (annual % change)	7.6	8.8	16.6	17.8	12.6
Exports of goods and services (annual % change)	15.9	7.9	13.8	20.7	16.6
Imports of goods and services (in % of GDP)	78.4	77.9	82.4	88.2	86.6
Exports of goods and services (in % of GDP)	76.5	75.2	77.3	84.4	86.1
Trade Balance (millions USD)	-649	n.c.	n.c.	n.c.	n.c.
Trade Balance (including service) (millions USD)	-408	n.c.	n.c.	n.c.	n.c.
Current Account (millions USD)	-282	n.c.	n.c.	n.c.	n.c.
Current Account (in % of GDP)	-0.9	n.c.	n.c.	n.c.	n.c.
Foreign trade (in % of GDP)	154.9	153.1	159.6	172.6	n.c.

Source:World Bank - World Development Indicators

Main partner countries

Main customers (% of exports)	2007
Germany	21.5%
Czech Republic	12.4%
France	6.8%
Italy	6.4%
Poland	6.2%
Other partners	46.7%

Main suppliers (% of imports)	2007
Germany	19.9%
Czech Republic	11.5%
Russia	9.4%
Hungary	5.4%
China	5.2%
Other partners	48.6%

Source: Comtrade

Main products

Main exports (% of exports)	2007
Vehicles other than railway or tramway rolling stock	24.2%
Electrical machinery and equipment and parts thereof; sound recorders and r ...	20%
Machinery and mechanical appliances; parts thereof	9.6%
Iron and steel	7.1%
Mineral fuels, mineral oils and products of their distillation	4.9%

Main imports (% of imports)	2007
Electrical machinery and equipment and parts thereof; sound recorders and r ...	17.8%
Vehicles other than railway or tramway rolling stock	14%
Machinery and mechanical appliances; parts thereof	12.1%
Mineral fuels, mineral oils and products of their distillation	11.2%
Iron and steel	4.1%

Source: Comtrade

To see more products: More imports (Intracen Data)
More exports (Intracen Data)

Sources of economic information

Ministries: Ministry of the Economy
Ministry of Finance
Statistical Office: Statistical Office of the Slovak Republic
Central Bank: National Bank of Slovakia
Stock Exchange: Bratislava Stock Exchange (in Slovak)
Search Engines: Zoznam
Pages.sk
Dmoz.org
Economic portals

Political outline

Executive Power: The President is the head of state and is elected by direct universal suffrage for a five-year term. Following the parliamentary elections, the leader of the majority party or the leader of a majority coalition is usually appointed Prime Minister by the President for a four-year term. The Prime Minister is the head of the government and enjoys the executive powers which include implementation of the law in the country and running the day-to-day affairs. The cabinet is appointed by the President on the recommendation of the Prime Minister.
Legislative Power: The legislature is unicameral in Slovakia. The parliament, called National Council, consists of 150 seats; its members are elected on the basis of proportional representation to serve four-year terms. The executive branch of government is directly or indirectly dependent on the support of the National Council, often expressed through a vote of confidence. Legislative power is vested in the National Council. The Prime Minister cannot dissolve the parliament, but the President can do so if circumstances require this. The people of Slovakia enjoy considerable political rights.
Main political parties: Slovakia has a multi-party system, with numerous parties in which no one party normally has a chance of gaining power alone, and parties need to work with each other to form coalition governments. The major political parties in the country are:

SNS (Slovak National Party), – a centre-right party based on principles of Christianity, Nationalism and Socialism;
KDH (Christian Democratic Movement), – Christian democrats;
Smer-SD (Direction - Social Democracy), – generally considered to be a left-of-centre political party;
SMK (Hungarian Coalition Party) , – a party of the ethnic Hungarian minority;
LS-HZDS (People's Party - Movement for a Democratic Slovakia), – a social democratic party;
SDKU-DS (Slovak Democratic and Christian Union - Democratic Party), – a Christian democratic party.
Current political leaders: President: Ivan GASPAROVIC (since June 2004) non-partisan, but nominated by political parties
Prime Minister: Robert FICO (since July 2006) Smer-SD, heading a coalition government with SDKU-DS and SMK
Next election dates: Presidential:July 2010
National Council: In 2010