Brief Description of Country
Slovakia is a country located in the Central and Eastern European region (CEE) with a population of 5.4 million inhabitants and surrounded by five neighboring countries (Austria, Czech Republic, Hungary, Poland, Ukraine). The official language is the Slovak language, which belongs to the East Slavic Language Family. Slovakia is a member state of more than 60 of the most important international organizations such as the European Union (EU), NATO, the United Nations (UN), the Organization for Economic Cooperation and Development (OECD), the World Trade Organization (WTO), the Organization for Security and Cooperation in Europe (OSCE), the Council of Europe. Moreover, together with the Czech Republic, Hungary and Poland, Slovakia is also a member of the Visegrad Group (V4) that serves as a platform for regional cooperation of four Central European (CE) countries. Slovakia is a modern country with a high standard of living for its citizens. According to the latest Human Development Index (HDI) Ranking, Slovakia holds the 38th position out of 189 countries.
Membership in the European Union
Slovakia entered the EU during the largest enlargement process to date, on 1 May 2004. Slovakia also became a member of the Schengen Zone in 2007, followed by joining the Eurozone in 2009. This year Slovakia marked the 15th anniversary since EU accession and the 10th anniversary since joining the exclusive euro club consisting of 19 countries. According to the Eurobarometer survey (published in October 2017) more than half the population believes that the EU membership to be a good thing for Slovakia, and 77% of the Slovaks think EU membership has been beneficial since the accession process.
Slovakia is experiencing an ongoing economic expansion, driven by continually increasing domestic demand, as well as booming investment ̶ both local and foreign. Real GDP growth has more than doubled since 2013 and reached 4.2% in 2018. According to the 2019 Winter Economic Forecast of European Commission, the Slovak economy is projected to keep this pace and continue to grow by 4.1% in 2019. The unemployment rate continues to decline and labour market conditions are expected to continuously improve.
This period of economic expansion will be primarily reflected in wage increases. It is anticipated that both the unemployment rate and gross public debt to be decreased in the years ahead. However, the continual pace of economic growth is likely to ease in 2020 as export growth, dominating in 2019, is expected to slow down. According to the World Bank Worldwide Governance Indicator (WGI), Slovakia is one of the most politically stable countries in the CEE region, and hence the country has been perceived as a regional FDI champion for many years. For example, the latest investment of Jaguar Land Rover is projected to have a positive impact on the stimulation of economic growth.
As previously mentioned, Slovakia is a country of 5.4 million of people, of which 2,556 million are employed. According to the Central Office of Labor, Social Affairs and Family of the Slovak Republic, the unemployment rate for February 2019 was 5.16%.
Structure of the Slovak Economy
The Slovak economy is built upon three major sectors: services (61.5%), industry (34.8%), agriculture (3.8%), with the highest share of the Slovak GDP growth seen in the services and industrial production sectors. The most represented industries within the services sector are the Information and Technologies (ICTs), and the Business Services Centers (BSCs). The automotive, mechanical engineering and electronics are the leading sectors within industrial production.
With one of the most advanced ICT infrastructures in the CEE region, Slovakia is an ideal location for new software houses or IT outsourcing centers. When it comes to shared services, to date, more than 65 BSCs are present. The reason why representatives of global companies decided to locate these centers in Slovakia are mainly the reputation, multilingual competencies and quality of the Slovak labour force.
The electronics sector makes 11% share on total industrial production, while the share of the automotive industry is 47%. Slovakia is the world’s biggest car producer per capita, so it goes without saying that the automotive industry has a special place in the Slovak economic structure. 4 large car makers operate in Slovakia and produce specific premium car models that are not made anywhere else in the World ̶ Volkswagen, PSA Peugeot and Citroën, Kia Motors, Jaguar Land Rover. As a result, the OECD considers Slovakia as the worldwide leader with the highest growth of added value in manufacturing among all of its member states. This indicates the Slovak economy has the potential of quantitative and qualitative growth.
The Slovak labuor force is highly-qualified and hardworking. 92% of the population acquired at minimum an upper education, and thus Slovakia has one of the highest proportions of secondarily educated people among OECD countries. According to the latest Eurostat data, the labor productivity (measured as the GDP per hour worked) in Slovakia has been constantly growing and continually reaches the highest rate in CEE region. There are several reasons behind this success, for instance, the fact that Slovakia is CEE leader in the ability of adopting new technology brought to the country by foreign investors. In this ranking (being part of The Global Competitiveness Report), Slovakia holds the 16th place out of 137 countries worldwide. This makes Slovakia an attractive investment destination for the implementation of R&D and innovations in production. According to the latest data by International Federation of Robotics, the global average of newly installed robots in manufacturing was 85 robots for 10,000 employees, whereas in Slovakia there was an average of 151 robots for the same number of working people, roughly 1 robot for every 66 employees. Slovakia has been proactive in taking steps towards automation and digitalization of production systems by increasing the number of robots in production.
Slovakia’s human potential, a pro-innovative approach, together with a strategic central European location reaching up to 600 million potential clients in a radius of 2,000 km create the best conditions possible for investing and doing business.
The Slovak Investment and Trade Development Agency - SARIO
The Slovak Investment and Trade Development Agency is a governmental organization operating under the Ministry of Economy of the Slovak Republic. The goal of the Agency is to attract high added value investments to Slovakia and to contribute to the regional development of the country. SARIO supports also Slovak companies by their efforts to become not only local, but also regional and eventually global players.
Our vision is to help transform Slovakia into a technological & innovative hub and to become the partner of choice for companies considering to invest in Central Europe.
Invest in Slovakia
Trade with Slovakia
Life in Slovakia
Investment Aid 2019