Slovakia

slovakia

Quick facts:

Territory 49,035 km2
Population 5.41 million (2013)
Currency Euro (EUR)
Capital Bratislava
Official language Slovak
Memberships EU, OECD, Eurozone, Schengen Area, NATO, the Visegrad Group (V4)
Real GDP per capita 9,400 EUR per inhabitant (2012)
Growth of GDP, % 1.8% (2012). Forecast: 0.9% in 2013, 2.1% in 2014, 2.9% in 2015
Average gross salary 818 EUR (2Q 2013)
VAT rate 20% general rate; Reduced rate – 10% on medications and books
Company Income Tax 23%
Phone code +421
Top domain .sk

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Ten years ago, 5 million Slovakians embarked on an ambitious project of deep structural reforms in order to become one of the top business locations within the European Union. These reforms focused on a reduction of bureaucracy and tax burdens together with an emphasis on lower and effective government expenditures, and are often presented as a model for other emerging CEE markets, highly praised by respected institutions such as IMF or World Bank. Early after the reforms came into effect, Slovakia experienced a boom of FDI and fast growth of the economy, which peaked in 2008 when GDP growth hit a record level of 10.4%, the highest in the EU. Following accession to the EU in 2004, Slovakia’s great economic performance was crowned with the introduction of the Euro currency in 2008.

Favourable business conditions attracted flocks of foreign investors and bolstered existing Slovakian businesses. This resulted in fast expansion of industries such as automotive (per capita car production in Slovakia is now the highest in the world), machinery and precision engineering, metallurgy and metal processing, electronics, chemistry and pharmaceuticals, and ICT as well as the service sector.

Even at the time of the global crisis, Slovakia kept its economy growth above the EU average despite the fact that external conditions significantly curbed its outstanding performance. Data of the final quarter inf 2009 indicated a turn-over of the negative trend, together with a positive international rating which is one of the highest in Central Europe. In 2010 the Slovakian GDP increased by 4%, in 2011 with a 3.3% growth rate, the Slovakian economy was the 2nd fastest growing Eurozone member after Estonia.

The development of the Slovak economy will depend a lot on foreign demand. The development of the economies of Slovakia’s main export partners, Germany and the Czech Republic, will influence the development of Slovak export. According to the European Commission forecast, in 2014 the Slovakian economy will grow by 2,1%; and in 2015 – by 2.9%.