Economic trends
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. Foreign direct investment (FDI) in Slovakia has increased more than 600% since 2000. The taxation system is well adapted to the needs of trade and the workforce is very qualified. The country also benefits from an advantageous geographical location, being located at the crossroads of Central Europe. Inflation is under control and 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 Euro zone in January 2009. The disadvantage of these reforms is that they have created a load on domestic demand and they lower the potential of economic growth.
The Slovak economy has been touched by the financial crisis. The country has undergone into a global economic slack. Many industrial sites have closed and the population has seen its purchasing power decrease. The integration of the country in the Euro zone, which made disappear the risks in foreign market exchange, should allow Slovakia to fight against the effects of the crisis in the next following months.
Main branches of industry
The agriculture sector is not much developed in Slovakia and it represents less than 3.5% of 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 (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 GDP. The heavy industry sector such as metal and steel are still in a restructuring phase. High value-added industries like electronics, engineering and petrochemicals are set up 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 represent about 60% of GDP. It is dominated by commerce and real estate.
International trade
The share of foreign trade in the country’s GDP has reached more than 160%. Due to the high energy imports from Russia, as well as substantial imports of machinery and electrical & electronic equipment used in its growing automobile and energy sectors. Therefore, Slovakia’s imports cost remain very high. Nevertheless, dynamics in the tertiary sector and the potential in the field of automobile export should, in time, allow an equilibrium in its commercial balance. Slovakia's three main suppliers are Germany, the Czech Republic and Russia. Its three main clients are Germany, the Czech Republic and Austria.
The global economical crisis has had a very negative impact in some industrial sectors, especially in the automobile. As a matter of fact, the decrease in demand in the rest of Europe has affected the Slovak production in its factories.
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