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Slovakia: Economic and Political Outline
Economic Indicators | Foreign Trade in Figures | Sources of General Economic Information | Political Outline
Since 2000, Slovakia has been experiencing a sustained and steady GDP growth rate, notably induced by its integration into the European Union in May 2004. The taxation system is well-adapted to the needs of trade and the workforce is highly qualified. The country also benefits from an advantageous geographical location, being located at the crossroads of Central Europe. The budgetary deficit is in constant decrease, mainly due to the major structural reforms set in place in the preparation process to its integration into the eurozone.
However, the Slovak economy has been affected by the financial crisis of 2008-2009, followed by the crisis in the eurozone deepening in 2011. As a member of the eurozone since 2009, Slovakia suffered an overall slowing down of th eeconomy. After having registered growth of 4% in 2010, it contracted to 3% in 2011 (which nonetheless still remains one of the highest growth rates among the Central European countries) and should further slow down to 1% in 2012.
The Slovak economy is also negatively affected by weak domestic demand, with its construction sector in crisis and a continued decrease in consumer spending (-3% in 2011). Inflation rose to 4% in 2011 and unemployment continues to surge despite positive economic growth, reaching 13.4% in 2011. The country's debt is expected to reach 45% of GDP in 2012. Indeed, much of the Slovak foreign debt (45%) depends on the eurozone, with only exports driving growth. They should remain dynamic in 2012, depending on the economic dynamism of its European partners.
| Main Indicators | 2009 | 2010 | 2011 | 2012 (e) | 2013 (e) |
| GDP (billions USD) | 87.82 | 87.45e | 97.24e | 101.20 | 107.08 |
| GDP (Constant Prices, Annual % Change) | -4.8 | 4.0 | 3.3e | 3.3 | 4.3 |
| GDP per Capita (USD) | 16,187 | 16,104e | 17,889 | 18,598 | 19,660 |
| General Government Balance (in % of GDP) | -6.4 | -6.7 | -4.2 | -3.4 | -2.9 |
| General Government Gross Debt (in % of GDP) | 35.4 | 41.8e | 44.9 | 46.9 | 47.1 |
| Inflation Rate (%) | 0.9 | 0.7 | 3.6e | 1.8 | 2.9 |
| Unemployment Rate (% of the Labor Force) | 12.1 | 14.4 | 13.4 | 12.3 | 11.3 |
| Current Account (billions USD) | -2.82 | -3.02e | -1.23e | -1.10 | -0.73 |
| Current Account (in % of GDP) | -3.2 | -3.5e | -1.3e | -0.7 | - |
Source: IMF - World Economic Outlook Database ; World Bank , Last Available Data
Note: (e) Estimated Data
The agriculture sector is not much developed in Slovakia and it represents less than 3.5% of the GDP. The main agricultural products in the country are cereals, potatoes, sugar beets and grapes. The mountainous area of Slovakia has vast forests and pastures which are used for intensive sheep grazing, and it is rich in mineral resources including iron, copper, lead, and zinc.
The secondary sector represents about a third of the GDP. The heavy industry sector such as metal and steel are still in a restructuring phase. High value-added industries such as electronics, engineering and petro-chemicals are installed in the western part of the country. Some sectors, like the automobile and consumer goods, offer attractive investment opportunities to foreign investors.
The services sector represents about 60% of the GDP. It is dominated by trade and real estate. The development of tourism can also become an important sector for the Slovak economy in the next following years. Already in 2011 it was among the most dynamic sectors of the Slovak economy.
| Breakdown of Economic Activity By Sector | Agriculture | Industry | Services |
| Employment By Sector (in % of Total Employment) | 3.6 | 37.9 | 58.4 |
| Value Added (in % of GDP) | 2.7 | 35.3 | 62.1 |
| Value Added (Annual % Change) | 6.0 | 6.0 | -7.3 |
Source: World Bank - Last Available Data.
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| Monetary Indicators | 2004 | 2005 | 2006 | 2007 | 2008 |
| Euro (EUR) - Average Annual Exchange Rate For 1 USD | 32.26 | 31.02 | 29.70 | 24.69 | 21.36 |
Source: World Bank - Last Available Data.
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Distribution of Economic freedom in the world
Source: 2011 Index of Economic freedom, Heritage Foundation
Note: The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labor freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.
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Slovakia's strong industrial tradition, tax incentives, a still inexpensive and skilled workforce, its rapidly developing infrastructure boosted by an influx of EU funds and a fragile but real growth make the country a place of predilection for trade. Since 2009, the economic growth of Slovakia has been driven by its exports. These amounted to almost 2 billion euros in 2011 and should remain high in 2012. The share of foreign trade inthe GDP of the country, which exceeded 100% in 2010, too remains very important.
Slovak trade balance is in deficit, mainly because of energy imports from Russia and the substantial imports of machinery and electrical and electronic equipment used in the automotive and energy sectors. Nevertheless, the dynamism of the tertiary sector is expected to eventually improve this situation.
The top three import partners are Germany, the Czech Republic and Russia. Its three main customers are Germany, the Czech Republic and Austria. The European crisis has accentuated the country's exposure since more than a third of its exports depend on the eurozone.
| Foreign Trade Indicators | 2007 | 2008 | 2009 | 2010 | 2011 |
| Imports of Goods (million USD) | 60,616 | 73,912 | 55,650 | 66,151 | 77,138 |
| Exports of Goods (million USD) | 58,515 | 71,142 | 56,082 | 65,127 | 79,362 |
| Imports of Services (million USD) | 6,413 | 9,066 | 7,940 | 6,773 | 6,987 |
| Exports of Services (million USD) | 6,985 | 8,414 | 6,263 | 5,813 | 6,527 |
| Imports of Goods and Services (Annual % Change) | 8.9 | 3.3 | 8.4 | 8.0 | - |
| Exports of Goods and Services (Annual % Change) | 13.8 | 3.2 | 8.8 | 7.5 | - |
| Imports of Goods and Services (in % of GDP) | 87.8 | 85.3 | 103.7 | 105.7 | - |
| Exports of Goods and Services (in % of GDP) | 86.7 | 83.0 | 99.5 | 102.5 | - |
| Trade Balance (million USD) | -909 | -899 | 1,374 | 182 | - |
| Trade Balance (Including Service) (million USD) | -376 | -1,584 | -355 | -806 | - |
| Foreign Trade (in % of GDP) | 174.5 | 168.3 | 203.2 | 208.3 | - |
Source: WTO - World Trade Organization ; World Bank , Last Available Data
| Main Customers (% of Exports) |
2010 |
| Germany | 19.2% |
| Czech Republic | 13.7% |
| Poland | 7.3% |
| France | 6.8% |
| Austria | 6.8% |
| See More Countries | 46.1% |
| Main Suppliers (% of Imports) |
2010 |
| Germany | 16.1% |
| Czech Republic | 10.3% |
| Russia | 9.6% |
| South Korea | 8.0% |
| China | 6.2% |
| See More Countries | 49.8% |
Source: Comtrade, Last Available Data
Source: Comtrade, Last Available Data
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Source: Worldwide Press Freedom Index 2011, Reporters Without Borders
Note: The world rankings, published annually, measures the violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position is assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire sent to partner organizations,150 RWB correspondents, journalists, researchers, jurists and activists of human rights, including the main criteria - 44 in total - to assess the situation of press freedom in a given country. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).
Note: The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.
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Last Updates: May 2012