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Slovakia: respectable economic growth continues in 2008

  • Limited impact from the international environment
  • Economic growth at outstanding 10.3 % and continues to be good
  • Euro: estimated conversion rate of 32.3 SKK/EUR most likely

Slovakia had an outstanding year 2007 with an economic growth rate of 10.3 %. This development was driven by both domestic and external demand and economy is expected to stay strong, though not at such a high rate: for 2008 a growth rate of 6.9 % is expected. “The Slovakian economy is strong and relatively healthy”, so Debora Revoltella, CEE chief economist of UniCredit Group. “It is further backed by an increasing production in new plants, mainly in automotives, electronics and machinery.” These are perfect prospects for the labour market as well. The development there remains healthy and a continual growth in employment and a decline in unemployment, as well as reasonable wage growth can be observed.

86 % probability of Slovakia meeting the Maastricht criteria
At the end of 2007 inflation increased, driven by external factors like rising global prices for food and oil. Despite that it remains to be one of the lowest in the EU and Slovakia still fulfils the Maastricht criterion. “We consider that there is an 86 % probability of Slovakia meeting all the Maastricht criteria”, so Viliam Patoprsty, chief economist of UniCredit Bank in Slovakia. Consequently Slovakia would adopt the Euro as national currency and become part of the Euro Zone with 2009. Sustainability, however, mainly inflation related, is now the main issue. Pressure for a further tightening in fiscal policy may, therefore, increase in the next few years.

The recent international financial turmoil had no major impact on the Slovak financial market. Nevertheless, the Slovakian currency, the koruna was volatile in recent month, influenced by the turbulences on the global financial markets and the domestic political scene. The economic experts of UniCredit Group expect that the koruna will still have some room to appreciate. In the next few months one more revision is supposed to come – the last one – of central parity vs. the Euro, most likely in May. The new parity and consequently also the conversion rate could be set within a range of 32.0-33.0 SKK/EUR, while the experts regard 32.3 SKK/EUR as the most likely one.

About UniCredit Group
Ranking among the top financial groups in Europe in terms of market capitalization (approx. €70 billion at current market price), UniCredit has a presence in 23 countries, with over 40 million clients and 9,000 branches, approximately 170,000 employees and total assets of approximately €1,018 billion (pro-forma) as of 30 June 2007.
In the CEE region, UniCredit operates the largest international banking network with over 3,700 branches and outlets, where more than 76,000 employees serve approximately 27 million customers.
The Group operates in the following countries: Azerbaijan, Bosnia and Herzegovina, Bulgaria, Croatia, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Kazakhstan, Kyrgyzstan, Poland, Romania, Russia, Serbia, Slovakia, Slovenia, Tajikistan, Turkey and Ukraine.

Requests: Communications CEE,  Silvana Lins  
Phone: +43 (0) 50505 56036,
E-mail : silvana.lins@ba-ca.com