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March 28, 2018 12:00 am | FILED UNDER: europe

Slovakia On Pace To Reach EU Economic Average

By ČTK

Prague, March 28 (CTK) – Slovakia is catching up with the average European Union economic level at a faster rate than the Czech Republic but it still lags behind the country, according to a study conducted on the occasion of the 25th anniversary of Czechoslovakia’s split and presented to journalists by CSOB today.

 

The most evident link between the countries is their dependence on the car industry, while the biggest difference is on the labour market, with the Czech Republic reporting unemployment which is three times lower than Slovakia’s, the study showed.

 

Czech gross domestic product per capita reached 88 percent of EU’s average in 2016, improving by 12 percentage points from 1995.

 

Slovak GDP per capita was at 77 percent of EU’s average in 2016, jumping by 29 percentage points from 1995.

 

The countries joined the EU in 2004, and Slovakia entered the euro area in 2009.

 

Even at the end of the first and the beginning of the second decade of the 21st century when the countries faced enormous external economic pressure, the currency of choice did not have a clear and indisputable impact on their competitive advantage in economic growth dynamics, CSOB chief economist Martin Kupka said.

 

Each country produces over one million cars a year, together accounting for 13 percent of the EU’s automotive output.

 

The Czech Republic and Slovakia are the world’s leading countries in the number of produced vehicles per capita.

 

The relatively high dependence on the car industry is confirmed by the field’s share in the total value added, CSOB analyst Petr Dufek said.

 

“Both countries are at the mercy of Europe’s cyclical demand for new passenger cars, which is peaking,” he said.

 

Slovakia’s unemployment rate is at 7.4 percent, which is where the Czech Republic, currently at its lowest, was eight years ago.

 

Slovakia has been dealing with high unemployment and a slow increase in job offers.

 

Slovaks often leave to work in the Czech Republic which is currently dependent on the foreign workers inflow, Dufek said.

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