Slovakia: Economy Overview

13 November 2009
by Ina Dimireva -- last modified 17 December 2010

Slovakia has made significant economic reforms since its separation from the Czech Republic in 1993. Reforms to the taxation, healthcare, pension, and social welfare systems helped Slovakia to consolidate its budget and get on track to join the EU in 2004 and to adopt the euro in January 2009.

Economy Overview

Major privatizations are nearly complete, the banking sector is almost entirely in foreign hands, and the government has helped facilitate a foreign investment boom with business friendly policies such as labor market liberalization and a 19% flat tax. Foreign investment in the automotive and electronic sectors has been strong. Slovakia's economic growth exceeded expectations in 2001-08 despite the general European slowdown. Unemployment, at an unacceptable 18% in 2003-04, dropped to 7.7% in 2008 but remains the economy's Achilles heel. Despite its 2006 pre-election promises to loosen fiscal policy and reverse the previous DZURINDA government's pro-market reforms, FICO's cabinet has thus far been careful to keep a lid on spending in order to meet euro adoption criteria and has focused on regulating energy and food prices instead. To maintain a stable operating environment for investors, the European Bank for Reconstruction and Development advised the Slovak government to refrain from intervening in important sectors of the economy. However, Bratislava's approach to mitigating the economic slowdown includes substantial government intervention and the option to nationalize strategic companies. GDP fell nearly 5% in 2009 and unemployment rose above 12%, as the global recession impacted many segments of the economy.

GDP (purchasing power parity):

$114.9 billion (2009 est.)
country comparison to the world: 62
$120.6 billion (2008 est.)
$113.6 billion (2007 est.)
note: data are in 2009 US dollars

GDP (official exchange rate):

$88.21 billion (2009 est.)

GDP - real growth rate:

-4.7% (2009 est.)
country comparison to the world: 186
6.2% (2008 est.)
10.6% (2007 est.)

GDP - per capita (PPP):

$21,000 (2009 est.)
country comparison to the world: 61
$22,100 (2008 est.)
$20,800 (2007 est.)
note: data are in 2009 US dollars

GDP - composition by sector:

agriculture: 2.6%
industry: 34.4%
services: 63%

Labor force:

2,632 million (2009 est.)
country comparison to the world: 108

Labor force - by occupation:

agriculture: 3.5%
industry: 27%
services: 69.4% (December 2009)

Unemployment rate:

11.4% (2009 est.)
country comparison to the world: 130
7.7% (2008 est.)

Investment (gross fixed):

23.6% of GDP (2009 est.)
country comparison to the world: 57

Budget:

revenues: $30.01 billion
expenditures: $35.99 billion (2009 est.)

Inflation rate (consumer prices):

1.6% (2009 est.)
country comparison to the world: 64
4.6% (2008 est.)

Commercial bank prime lending rate:

NA% (31 December 2009)
NA% (31 December 2008)

Stock of domestic credit:

$64.25 billion (31 December 2009 est.)
country comparison to the world: 57
$58.7 billion (31 December 2008 est.)

Agriculture - products:

grains, potatoes, sugar beets, hops, fruit; pigs, cattle, poultry; forest products

Industries:

metal and metal products; food and beverages; electricity, gas, coke, oil, 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:

-8.3% (2009 est.)
country comparison to the world: 134

Oil - production:

4,114 bbl/day (2009 est.)
country comparison to the world: 96

Natural gas - production:

103 million cu m (2009 est.)
country comparison to the world: 78

Current account balance:

$-2.819 billion (2009 est.)
country comparison to the world: 160
$-6.43 billion (2008 est.)

Exports:

$55.32 billion (2009 est.)
country comparison to the world: 44
$72.57 billion (2008 est.)

Exports - commodities:

machinery and electrical equipment 35.9%, vehicles 21%, base metals 11.3%, chemicals and minerals 8.1%, plastics 4.9% (2009 est.)

Exports - partners:

Germany 19.91%, Czech Republic 13.02%, France 7.72%, Poland 7.26%, Hungary 6.48%, Italy 6.06%, Austria 5.88%, UK 4.71% (2009)

Imports:

$53.67 billion (2009 est.)
country comparison to the world: 44
$73.62 billion (2008 est.)

Imports - commodities:

machinery and transport equipment 31%, intermediate manufactured goods 13%, vehicles 12%, base metals 9%, chemicals 8%, plastics 6% (2009 est.)

Imports - partners:

Germany 16.8%, Czech Republic 12.3%, Russia 9%, South Korea 6.8%, China 5.8%, Hungary 5.3%, Poland 4% (2009)

Debt - external:

$69.55 billion (31 December 2009 est.)
country comparison to the world: 45
$52.53 billion (31 December 2008)

Stock of direct foreign investment - at home:

$50.26 billion (31 December 2009 est.)
country comparison to the world: 51
$45.93 billion (31 December 2008 est.)

Stock of direct foreign investment - abroad:

$2.743 billion (31 December 2009 est.)
country comparison to the world: 63
$1.901 billion (31 December 2008 est.)

Exchange rates:

note: on 1 January 2009 Slovakia adopted the euro as legal tender

Source: CIA - The World Factbook