Slovaks enjoy Hungary shopping sprees with cheap forint

(BRATISLAVA) - Slovaks, the eurozone's second poorest members, are taking advantage of the slumping rate of neighbouring Hungary's forint against the euro to go on shopping sprees in Hungarian border towns.

"The number of cash withdrawals (by Slovaks) in Hungary has increased by more than 55 percent over the past three months compared with the same period a year ago, while the number of card transactions has increased by 50 percent in the same period," Stefan Frimmer, spokesman for Slovakia's biggest bank Slovenska Sporitelna told AFP on Monday.

Slovakia was the first among former Soviet bloc countries to adopt the euro on January 1, 2009, a move that put consumers in a favourable position compared with neighbours whose currencies have weakened in the global financial crisis.

"Shopping in Hungary starts making sense for Slovak customers as soon as the exchange rate approaches 298 forints for a euro," market analyst from the Terno agency Lubomir Drahovsky said.

The Hungarian currency hit a historic low of 324 to the euro in early January on fears that international lenders would refuse a bailout for Hungary, which is seeking a credit line of 15-20 billion euros ($19-25 billion).

"The Slovaks focus on electronics and food, they usually buy enough supplies for two weeks and then return," Drahovsky said, adding that Slovak families also often fill up at Hungarian petrol stations.

Another traditional shopping destination for Slovaks is Poland, where they prefer to buy home-made food products or products made by local craftsmen, according to Drahovsky.

But thrifty Slovaks spending their money abroad are also harming national retailers.

"National retail sales have been falling for three years now - since we joined the eurozone -- and some 80 percent of the slump has been caused by shopping abroad," Pavol Konstiak from the Trade and Tourism Association told AFP.

"Every customer prefers to save as much money as possible and they don't care whether they support local or foreign economy," he added.