Economy—overview: Slovakia, continuing the difficult transition from a centrally controlled economy to a modern market-oriented economy, begins 1999 with clouds on the horizon: GDP growth is slowing sharply; budget and current account deficits are too large; external debt is growing uncomfortably fast; unemployment is high and rising; corrupt insider deals persist; and demand is weakening for Slovakia's key primary goods exports, especially as Russia and Ukraine slump and as EU growth slows. International credit rating agencies have downgraded Slovak debt to below investment grade. The new government intends to address the economy's ills by giving priority to joining the OECD and EU, cutting government wage and infrastructure spending, boosting some taxes and regulated prices, expanding privatization to companies formerly considered strategic, restructuring the financial section, encouraging foreign investment, and reenergizing the social partnership with labor and employers. Government officials believe as long as two years may be needed before its structural reforms improve economic performance. In 1999, the government expects GDP growth to slow from 5% in 1998 to 2%, inflation to rise from 6% to 10%, and unemployment to rise from less than 14% to 15% or 16%, but hopes to bring the budget deficit down to no more than 2% of GDP and the current account deficit down to 5% to 6% of GDP.

GDP: purchasing power parity—$44.5 billion (1998 est.)

GDP—real growth rate: 5% (1998 est.)

GDP—per capita: purchasing power parity—$8,300 (1998 est.)

GDP—composition by sector:
agriculture: 4.8%
industry: 33.4%
services: 61.8% (1997)

Population below poverty line: NA%

Household income or consumption by percentage share:
lowest 10%: 5.1%
highest 10%: 18.2% (1992)

Inflation rate (consumer prices): 7.4% (1998)

Labor force: 3.32 million (1997)

Labor force—by occupation: industry 29.3%, agriculture 8.9%, construction 8%, transport and communication 8.2%, services 45.6% (1994)

Unemployment rate: 14% (1998 est.)

Budget:
revenues: $5.4 billion
expenditures: $6.5 billion, including capital expenditures of $NA (1997)

Industries: metal and metal products; food and beverages; electricity, gas, coke, oil, and nuclear fuel; chemicals and manmade fibers; machinery; paper and printing; earthenware and ceramics; transport vehicles; textiles; electrical and optical apparatus; rubber products

Industrial production growth rate: 2.7% (1997)

Electricity—production: 25.81 billion kWh (1996)

Electricity—production by source:
fossil fuel: 35.57%
hydro: 20.81%
nuclear: 43.62%
other: 0% (1996)

Electricity—consumption: 26.353 billion kWh (1996)

Electricity—exports: 2.607 billion kWh (1996)

Electricity—imports: 3.15 billion kWh (1996)

Agriculture—products: grains, potatoes, sugar beets, hops, fruit; pigs, cattle, poultry; forest products

Exports: $10.7 billion (f.o.b., 1998)

Exports—commodities: machinery and transport equipment 37%; intermediate manufactured goods 30%, miscellaneous manufactured goods 13%; chemicals 9%; raw materials 4% (1998)

Exports—partners: EU 56% (Germany 29%), Czech Republic 20%, Austria 7%, Poland 7% (1998)

Imports: $12.9 billion (f.o.b., 1998)

Imports—commodities: machinery and transport equipment 40%; intermediate manufactured goods 18%; fuels 11%; chemicals 11%; miscellaneous manufactured goods 10% (1998)

Imports—partners: EU 50% (Germany 26%), Czech Republic 18%, Russia 10%, Italy 6% (1998)

Debt—external: $10.7 billion (1997)

Economic aid—recipient: $421.9 million (1995)

Currency: 1 koruna (Sk) = 100 halierov

Exchange rates: koruny (Sk) per US$1—36.207 (January 1999), 35.233 (1998). 33.616 (1997), 30.654 (1996), 29.713 (1995), 32.045 (1994)

Fiscal year: calendar year