Experts agree on the following specific features of the Slovak
economy relative to the Czech economy (Source: P. Karasz-J.
Rencko, Forecast Institute of the Slovak Academy of Science,
Bratislava in Newly Created States in East Central Europe:
Expectations and Reality, FOCUS, November, 1993):
- A high concentration of industries manufacturing
semifinished products which are then finished in the
Czech Republic, Czech industry having a higher percentage
of final manufacturing.
- A greater dependence on imports, especially imports from
the former socialist countries of Eastern Europe and the
former Soviet Union.
- A substantial proportion of the arms industry developed
in Czechoslovakia after 1948.
- Less production efficiency and less export capacity.
Despite unfavorable expectations, the Slovak economy showed
signs of growth in 1994, and the outlook for 1995 is relatively
positive. However, the pace of foreign investment and of the
privatization of state property has slowed since November 1994,
when the new government came into office. On the other hand, the
government budget for 1995 is sufficient to sustain efforts to
achieve the transition to a market economy.
Foreign investment in the Slovak economy in 1994 reached the
equivalent of US$5.5 billion. The main investors were Austria,
the Czech Republic, France, Germany, and the U.S. The level of
investment of these countries represented 80 percent of total
foreign investment.
Prices used to be strictly regulated. Prior to the revolution
of 1989, consumer prices rose by only one percent per year,
though hidden inflation (caused by the distortions generated by
strictly controlled exchange markets) was estimated at
approximately 3.5 percent. In 1993 the inflation rate, as
measured by the consumer price index, reached 23.2 percent. In
1994 the rate, which had been anticipated to be between 24.5 and
28 percent, was only 17.1 percent, even though a planned currency
devaluation of 10 to 20 percent was never implemented. Consumer
prices are expected to grow by 15 percent in 1995.
Unemployment is a new phenomenon in Slovakia. Statistics were
not kept until February 1990. Fear of the unknown, job insecurity
and unfamiliarity with coping strategies have caused many
inhabitants, especially in more depressed regions, to condemn the
social changes implemented following the collapse of Communism.
Table 2
Selected Macroeconomic Indicators, 1994
| |
Slovak Crowns |
U.S. Dollars |
| GDP |
398.3 billion |
12.4 billion |
| Per capita |
74,800 |
2,330 |
| Growth in 19944 |
-- |
4.8% |
| Expected growth in 19956 |
-- |
3.6% |
| Exports |
152.48 billion |
4.75 billion |
| Imports |
151.19 billion |
4.71 billion |
| Average monthly wage |
6,285 |
196 |
| Budget deficit |
16 billion |
.5 billion |
| Total debt |
131.6 billion |
4.1 billion |
Source: Wiener Institut Fur Internationale
Wirtschaftsvergleiche - WIIW Analysis in TREND, March 15,
1995.
The growth of unemployment in Slovakia is characterized by
three long-term trends:
- Regional disparities;
- Prolonged duration of unemployment;
- Greater unemployment among under 25-year-olds,
school-leavers and university graduates.
In 1994, unemployment stood at 14.5 percent. In 1995 the
unemployment rate is expected to reach 16 percent. Young people
aged 18 to 24 account for 32 percent of the unemployed. The
significantly higher rate of unemployment among this age group is
explained by the difficulty in securing employment after
graduation from secondary school or university. |
