wiiw Current Analyses and Forecasts
Slovakia: Export-driven growth, but rising unemployment
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Zdenek Lukas
in: Will Exports Prevail over Austerity?
wiiw Current Analyses and Forecasts No. 6, July 2010 , pp. 84-87
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GDP growth in Slovakia has been largely the result of a revival in external demand supported by improved competitiveness.
Apart from the depreciation of the Slovak currency (i.e. the euro), the export expansion has been driven by a strong fall in unit labour costs coupled with rising labour productivity and falling producer prices.
An increase in the unemployment rate to an average level of 15% (LFS) is the shadow side of those developments.
If the euro remains weak and ULCs low, GDP growth may expand by above 3% in 2010.
The main challenges for the new government relate to rising unemployment and the escalating general government budget deficit (about 7% of GDP in 2010).
Apart from the depreciation of the Slovak currency (i.e. the euro), the export expansion has been driven by a strong fall in unit labour costs coupled with rising labour productivity and falling producer prices.
An increase in the unemployment rate to an average level of 15% (LFS) is the shadow side of those developments.
If the euro remains weak and ULCs low, GDP growth may expand by above 3% in 2010.
The main challenges for the new government relate to rising unemployment and the escalating general government budget deficit (about 7% of GDP in 2010).
Reference to wiiw databases: wiiw Annual Database, wiiw Monthly Database
Countries covered: Visegrad countries, Slovakia