Slovakia: Growth Continues But Problems Remain


Mixed messages in the world of Slovakian business. While according to the latest figures published by the Business Alliance of Slovakia (PAS) the country’s business environment rating has fallen to 49.6 points (less than half its original starting value), in better news the World Economic Forum’s 2017-2018 Global Competitiveness Report (GCR) ranks Slovakia 59th, up six places on last year. Slovakia has alas dropped six places, from 33rd to 39th, in the World Bank’s Ease of Doing Business Report.

So what makes the Slovakian business climate so fluctuant?

“The real problem right now is the quality of state institutions and their administration of public life,” PAS Executive Director Peter Kremský tells Emerging Europe.  “That’s the area where business leaders have the most concerns. Corruption, bureaucracy and tax administration are the most painful burdens for companies doing business in Slovakia.”

GDP Growth

According to the National Statistics Office, in the second quarter of 2017 GDP rose by 3.3 per cent compared with 2016.

“Slovakia has improved on many fronts, especially when it comes to the macroeconomic environment and technological readiness,” Mr Kremský adds.

“Economic growth in the second quarter was driven mainly by the services sector (a contribution of 2 percentage points), as household consumption accelerated,” Slovakian Minister of Finance Peter Kazimir tells Emerging Europe. “Despite buoyant foreign demand, industrial production on the other hand has slowed down due to the automotive, electronics and optic sectors. This stems from several temporary factors, including the fact that the life-cycle of several car models produced domestically came to an end.”

Administratively, the bureaucratic burden has been lessened slightly, but more needs to be done.

“The government has made some small changes and improvements in administrative burdens and tax regulations, although in the GCR our score increased only slightly, from 4.28 to 4.33,” Peter Kremský adds.

“Overall, the regulatory environment has been improving, although the pace is sometimes frustratingly slow,” Juraj Gyárfáš, a senior associate at Allen and Overy, a law firm. “The greatest challenge is to increase business confidence in the judicial system. In our practice, we often encounter excellent judges, but unfortunately we also come across situations that raise serious doubts. There is a very low level of confidence in the judicial system,” he tells Emerging Europe.

Driving Cars 

Despite the lack of trust in the judicial system, foreign investors remain keen on Slovakia. The Slovak Investment and Trade Development Agency (SARIO) has helped almost 500 investors over the last 15 years including big names such as Kia, Samsung, T-Systems and Jaguar.

” Slovakia is one of few countries in CEE which has adopted the euro, providing more opportunities for doing business with western Europe,” the CEO of SARIO, Robert Simoncic explains.  “The share of high added-value projects is increasing significant, and Slovakia has recently become a well-known destination for innovative companies.”

Electrical engineering is one of the most important sectors, with one in every five LCD screens imported to the EU being made in Slovakia. “A common prerequisite of all sectors in Slovakia is research and development, and we have registered increased interest from investors to relocate their new R&D centres to Slovakia,” Mr Simoncic adds.

Thanks to a long tradition in the field of mechanical engineering, the most productive industry in Slovakia is still the automotive industry, accounting for 44 per cent of the country’s industrial output. Kia Motors is the only automaker in Slovakia to produce its own engines.

slovakia cars

“For over a decade, Kia Motors Slovakia has been making a difference in Slovakia, the Zilina region and community on numerous levels. We are among the largest producers, exporters, and tax payers in the country, and we have created 20,000 jobs,” Anton Ondrej, HR director of Kia Motors Slovakia tells Emerging Europe.

“We considered a few other countries in the region but decided on Slovakia due to its central location, the stable political situation, NATO and EU membership, the flat 19 per cent income tax rate at that time and he country’s long experience in engineering,” he explains.

Road to Nowhere

Nevertheless KIA Motors still faces challenges. “Unfortunately, Slovakia does not have a complete network of highways, which is crucial for us. There is one particular piece of highway on the D3 -heading towards the Czech Republic and Poland — that will not be finished until 2026. It is crucial for us, as we export over 1000 engines daily to our sister company Hyundai Motor Manufacturing in the Czech Republic. The other big challenge is the lack of qualified workers. Employers in the automotive industry, among others, have issues with finding qualified and skilled labour in sufficient numbers,” Mr Ondrej adds.

In addition to this, “the EU’s economic sanctions against Russia remain in place, which is why a continuous negative effect on the purchasing power of the local population can be expected to persist. Any depreciation of the British pound in the near future may have a negative impact on our results,” he says.

Finding skilled labour represents does indeed pose a major problem for all sectors. According to the National Union of Employers (RÚZ) the education system is churning out graduates in professions that employers are not altogether interested in.

“As the economy grows and unemployment declines our company has to face the problem of shrinking availability of qualified workers,” Martin Mittner, country manager of Nestlé Slovensko tells Emerging Europe.

Nestlé entered the Slovak market in 1992 by privatising a significant state-owned food producing factory. Since then Nestlé has grown and extended its product portfolio while other food producers did not survive the immediate post-communist transition period.

“The major challenge is to anticipate trends and consumer preferences, because Nestlé is a company that strives to enhance the quality of life and to contribute to a healthier future. We innovate and improve our products to offer consumers a healthier choice,” Mr Mittner adds.

Migrants Not Welcome?

“I cannot accept that in some parts of Europe, in Central and Eastern Europe, people are sold food of lower quality than in other countries, despite the packaging and branding being identical,” said European Commission President Jean-Claude Juncker in his most recent State of the Union speech.

He was referring to the different quality of products sold across the EU. Despite the problem first being raised many years ago, up to one-third of EU countries still have to put up with different products, according to Slovak Agriculture Minister Gabriela Matečná.

Slovakia recently completed a second round of testing on a number of food products, confirming that the situation has not improved a great deal. Of 33 supposedly identical products bought in Slovakia and Austria, testing demonstrated that nearly one half displayed differences.

And allegedly poorer quality food is not the only issue that irks Slovaks. Together with Hungary, Slovakia is one of the fiercest critics of the migrant quotas approved by the EU Commission. It is now more than a year since Slovak Prime Minister Robert Fico called the migrant quota system “politically dead.” According to the EU-wide agreement signed in 2015, Slovakia would have had to take in just 802 people. Even when added together with the Czech Republic it has taken in only a paltry 28.

And yet perhaps the ice is melting.

“For many reasons, the government’s priority is to join the ‘core’ of the EU, led by Germany and France,” says Juraj Marušiak, senior Research Fellow at the Slovak Academy of Sciences.  “Slovakia has therefore adopted a more conciliatory rhetoric on the migrant issue than Hungarian Prime Minister Viktor Orbán.”


Polish Shoppers in Hunt for Eggs

eggs in rack

Belarus’ Economy Is Slowly Recovering From Past Declines

Romanian Economy Grows Fast in 2017

Brasov cityscape panoramic and aerial view over medieval architecture of Brasov town, in Transylvania Romania

Lviv Is the Pearl and the Soul of Ukraine

Montenegro Accelerates Legal Reform

montenegro law reform

Still Potential for Growth in CEE as Economies Stabilise

Chris Lowney — What Jesuit Spirituality Can Teach Us About Global Leadership

Valga and Valka – Where Estonia and Latvia Work Together

Valga valka emerging europe

Škoda too Strong for VW Group

MLADA BOLESLAV CZECH REPUBLIC - MAY 30: Skoda Octavia on conveyor line during Doors Open Day at Skoda Auto a.s. factory. Skoda auto celebrated 120 years since its founding on May 30 2015 in Mlada Boleslav.

Trans Adriatic Pipeline Will Fuel Albanian Growth

Xanthi. Greece - July 30 2017: aerial view of construction of gas pipeline Trans Adriatic Pipeline - TAP in north Greece. The pipeline starts from the Caspian sea and reaches the coast of southern Italy

Belarus Steps Up Liberalisation of Business


Poles Still Keen on German Jobs

Brandenburg Gate in Berlin in Germany. The Brandenburg Gate is a triumphal arch a city gate in the center of Berlin. It is one of the most known sites in Berlin.

One in Five Poles Unaware of Source of Funds for 500 Plus Programme

EU Membership and Transition into Market Economies Have Helped CEE Achieve Social Progress

Investigations Into the Corrupt Ukrainian Fuel and Energy Sectors

Ukrainian money hryvnia. The national currency. Corruption in Ukraine

Albania’s Construction Sector Supports the Country’s Growth

SARANDA, ALBANIA - MAY 18: View of the city Saranda, most important tourist attraction of the Albanian Riviera on May 18, 2017 in Saranda, Albania.

Belarus Introduces New Business-Friendly Auditing Procedures

MINSK, BELARUS - AUGUST 15, 2016: Aerial view of the southwestern part of the Minsk with Palace of Sport and old and new other buildings. Minsk is the capital and largest city of Belarus.

Chinese Electric Car Maker Seeks Emerging Europe Base

zhi dou d2

SEE Link — Sharing SEE Europe’s Hopes for a Brighter Investment Future

Go East

More EU Help for Belarus SMEs

GRODNO BELARUS - DECEMBER 13 2013: Seamstress in textile factory sewing with a industrial sewing machine .

Ukraine Is Offering Europe Unique Combat and Technological Experience

Latvian Deputy Prime Minister Highlights Riga’s Potential


Romania’s Budget Deficit ‘Should Start Alarm Bells Ringing’

BUCHAREST ROMANIA - June 29 2017: Romanian Prime Minister Mihai Tudose during a swearing-in ceremony at Cotroceni palace in Bucharest capital of Romania June 29 2017.

Poland Stays Cool on Euro Adoption

Euro cash and Zloty on one photo.

World Bank’s Doing Business Report 2016 Resume For Emerging Europe

Estonia Leading CEE Country in WEF Competitiveness Index

pharmaceutical factory woman worker operating production line at pharmacy industry manufacture factory

GE Inaugurates Its New Bucharest Software Centre

Asian Outsource Developer Team Sitting At Desk Working Laptop Computer Mobile Application Software Real Office

Ukraine to Restart Privatisation to Realise Profits

Pricatisation electricity ukraine

Retail Rents Rise Across Emerging Europe

Na Prikope Prague

Changes Are Making Ukrainian Banking More Aligned with International Standards

Baltic Bank Merger May Tempt Polish Heavyweight

DNB Bank Vilnius

IMF Increases Growth Forecast With Emerging Europe Prominent

Dambovita river and center of Bucharest at sunset time Romania.

Do Your Homework First and Starting Business in Poland is Easier

CEE Tech Growth Continues: Poland and the Czech Republic Lead the Way


Serbia, Belarus and Ukraine Ranked Lowly by Wharton Business School

Kyiv Ukraine - April 172017: The postal square in Kiev on Podol the Dnipro river. view of the square from the river panorama

Hungary Seen as Riskiest Country in CEE


Economy Minister: Internationalisation Is the Key To the Slovenian Economy

Macedonia — Stepping Out Of the Shadow Of the Balkans

UK Economic Growth Slows as Brexit Uncertainty Bites

flags of UK and EU combined over icons of London - Brexit concept

Polish Labour Market Deficits Are Impacting All

Construction site with crane and building. Construction site in western europe - in Poland.

HSBC Reports CEE Growth Surge in Q3

romania national bank

EY: Belarus’ IT Scene Is Thriving

High tech park minsk

Emerging Europe Back on Track to Convergence


Georgia Leads Emerging Europe in Ease of Doing Business Report

Estonia Leads Baltics in Cutting Sugar in Food and Drink

Lithuania Gives Innovation a StartUp

MILAN ITALY - MAY 2: People visit Lithuania pavilion at Expo universal exposition on the theme of food on MAY 2 2015 in Milan.

Effective Policies Have Strengthened the Georgian Economy

TBILISI GEORGIA Jul. 18 2017: Bridge of Peace is a bow-shaped pedestrian bridge a steel and glass construction over the Kura River in downtown Tbilisi capital of Georgia

Meghri Becomes Armenia’s Third FEZ

armenia emerging europe

CEE Must Improve Infrastructure and Logistics

Aerial view of Gliwice Sosnica motorway junction. There are international traffic in four directions

Euroscepticism in Serbia: An Image Problem?

Fitch And the World Bank: Economic Growth To Remain Solid Within CEE In 2016

Romanian Cabinet Reshuffled as New Splits Emerge in Ruling Party

BUCHAREST ROMANIA - MAY 25 2014: The Victoria Palace. Victoria Square.

Young Georgians Make Their Mark at Emerging Europe-EBRD Event

maximilien lambertson at emergeing ebrd outlook on georgia

Larisa Manastirli: Where is Bulgaria After Ten Years in the EU?

Romania Cuts Income Tax, Introduces Solidarity Tax

CLUJ NAPOKA ROMANIA - OCT 2 2016: People on the central street of Cluj Napoka - the unofficial capital of Transylvania.

e-Estonia: Believe the Hype

Poland Fails to Spend Billions of Euros in EU Funds

euro banknotes

Poland’s Business Constitution Must Be Finalised

Front of finance ministry in Warsaw Poland with a fountain framing the entrance. Could be used for images about Euro currency problems

PE and VC Investment In CEE Is At an Eight-Year High

venture capital

TV Still a Star for CME

Kosovo: A Population of Talented Young Entrepreneurs Waits at Europe’s Door

CEE Is Key to China’s Belt and Road Initiative

Shanghai skyline Panoramic view of shanghai skyline and huangpu river Shanghai China

All for One, and One for All


More Brexit Fears As the UK Proves To Be A Needed Member

City of London view from Waterloo Bridge. This view includes: St. Paul`s Cathedral The Gherkin Tower 42 and Blackfriars Bridge.

Prospering Czechia Still Needs a Bigger Workforce

prague emerging europe

Does the Sceptre of Separatism Haunt Emerging Europe?

Szekely Land Flag

Ukraine to Make New Privatisation Push

Bulgaria: Real Estate’s New Frontier?

Growth Increase Offers Glimmer of Hope for Moldova


Lithuania Wants to Bring Home its Skilled Workers

VILNIUS - FEBRUARY 25: Many people choose books at the indoor book

The Azerbaijani Laundromat: Why It Matters

azerbaijani money laundering

Jadranka Joksimović: Serbia Takes Its Candidacy of the EU Seriously


The Reality in Romania Exposes False Perceptions Of The Country

Latvia Urged Not to Increase Expenditure As Economy Grows

Riga, Latvia - August, 2010: Panorama view from Riga cathedral on old town of Riga, Latvia

Moldova Launches New e-Procurement System In Search For Positive Change

Photo team work process, holding contract hand, signs documents. Account managers young crew works with startup project.New idea presentation, analyze marketing reports.Blurred, film effect, horizontal.

IMF Wants Banking Sector Reform in Western Balkans

croatia national bank

Bosnia and Herzegovina: Focussing on Stability and Business Climate

Sarajevo Bosnia and Herzegovina - August 23 2015. View of Miljacka River in Sarajevo city

Budget Chaos Hits Romanian Leu

Different Romanian Lei Banknotes on the table

Non-Financial Reporting No Longer a Secondary Consideration in CEE

Sunday Trading in Poland Under Renewed Threat

Georgian PM Reshapes and Reshuffles Cabinet

Giorgi Kvirikashvili

Ukraine’s Finance Ministry Wants Urgent Tax Reform

Serbia Drafts New Competition Law

serbia belgrade flag

21st century Manufacturing Arrives at Great Stone

Great stone

Nadiya Savchenko: I Dream of a Great Ukraine

Panorama of the top part of the Andrew's Descent from Castle Hill in springtime in Kiev Ukraine.

Continental Launch Largest Ever Lithuanian Greenfield Investment

kaunas lithuania

Lithuania Set to Streamline Competition Legislation

Industrial dock with cranes on the quay

IMF Urges Croatia to Speed Up Reform


Azerbaijan, Georgia, Turkey Launch New ‘Silk Rail’ Link

Poland’s Q2 2017 Growth Is Stronger Than Expected

WARSAW, POLAND - MAY 07, 2016: Building Palace of Culture and Science among the modern buildings of the city

Georgia’s Growth Continues

Batumi, Adjara, Georgia - May 27, 2016: Batumi, Adjara, Georgia. Gogebashvili Street Road And Marine Station Or Maritime Station Building Batumi On Background

Czech Election Result Could Delay Euro Adoption Until 2025

czech banknotes nominal value two and five thousand crowns on white background. 300 000 Kc is approximately 12 450 US dollars (USD) or 11 100 Euro (EUR)

Growth Continues for State-Owned Azerbaijan Airlines

Azerbaijan Baku - September 16 2015: View of the Heydar Aliyev International Airport sign in Baku Azerbaijan. The airport is the home of Azerbaijan Airlines the national flag carrier.

Slovenia Sets Green Vehicle Deadline of 2030


Tech Giant Expands Romanian Operations

Automotive and Transport Companies Dominate the CEE Region

Car bodies on the production line inside automobile factory

EU Commissioner Launches Veiled Attack on Poland and Hungary

eu commission

Why Was Zapad-2017 So Important?

russian tank belarus zapad

Hungary Today: Potential and Challenge

Chain bridge on Danube river in Budapest city. Hungary. Urban landscape panorama with old buildings and domes of opera

Bulgaria and Romania Get EBRD SME Boost

Startup Diversity Teamwork Brainstorming Meeting Concept

Industrial Production Prices in New Increase


Doing Business Across Eurasia Could Be Easier

Eurasia emerging europe schneider group

Bad Payers Still Causing Problems for Romanian Firms

Close up Romanian currency note, LEI or LEU, Romania

The Polish Government’s Mid-Term Report: Must Do Better

Front of finance ministry in Warsaw Poland with a fountain framing the entrance. Could be used for images about Euro currency problems

Kraków: Officially Emerging Europe’s Most Elegant City

Krakow. Image of Krakow Market square, Poland during sunrise.

World Bank: Brexit Hides Greater Challenges to the European Union and the CEE Region

Ukraine’s Economic Recovery: Good, But Slow

ukraine money

Putin Urges Belarus to End Oil Transit Through Lithuania

Athens Greece - May 27 2016: Russian President Vladimir Putin delivers

Croatian Salaries Are Growing in Line With Other CEE Countries

Dubrovnik Croatia emerging europe

Poland’s Flying Circus

airport poland

CEE Lags in Business Connectivity

ANIS romanian ICT

CEE Boosted by Positive Tourism Trends Across the Region

cruise ship in Kotor Bay Montenegro. Aerial view panorama. Kotor bay Montenegro.

CEE Emigrants Could Boost Their Countries’ Economies

Londoners walking through Millennium Bridge with St.Paul's Cathedral at the background after sunset - London, UK

Lviv Region in Double Logistics Boost

goods train logistics

ICT Growth Continues to Boost Bosnian Economy

ict, it

Baltic States to Launch Combined Capital Market

capital markets

A Risky Evaluation of Croatia’s Economy?

ZAGREB, CROATIA - JULY 17, 2017: Square Ban Josip Jelacic with tourists and trams on a summer day in Zagreb. City of Zagreb is the capital of Croatia.

Estonia Proposes Bill of Rights and Responsibilities for Robots

Robotic hand accessing on laptop the virtual world of information. Concept of artificial intelligence and replacement of humans by machines.

Is Prague the New Face of Overtourism?

prague tourists

Czechs Hold Emerging Europe’s Most Powerful Passport

Chickens Blamed for Romanian Budget Deficit

Two white chickens or hens inside a chicken coop or hen house seen through chicken wire.

Mayor: Armenia And Its Capital Yerevan Offer Safe Investment And Tourism To a Growing World

Estcoin: Estonia’s Own Digital Currency?

1 euro coin money (EUR) currency of European Union Estonia over blue background

Czech Republic Raises Interest Rates

czech koruna

Visegrad Group Looks East

Warsaw Rising: The Polish Capital’s Skyline Gets Even Taller


Beyond Borders: Immigration Within the EU

refugees immigrants

Lech Wałęsa: Hard Options Can Force Nations to Get Down to Work

Romanian Car Maker Dacia Sees Sales Boom

Sables d Olonne France - May 07 2017 : Dacia Tour 2017 is a commercial operation organized by the car builder in order to present its cars throughout France - Close-up on cars

IMF: Institutions Key to Sustainable Growth


Sarajevo Stock Exchange Connected to SEE Link

sarajevo stock exchange

China Agrees to Build High-Tech Business Park in Serbia

BELGRADE SERBIA - SEPTEMBER 29 2016: View on the city center and the junction of Rivers Sava and Danube in Belgrade Serbia.

Emerging Europe Makes Some Progress on Closing Gender Gap

world economic forum gender gap report

Global Players Dash for Tempting CEE

dollar pound euro coin on euro background.

CEE Nation Brands Still Behind Western Counterparts

TALLINN ESTONIA- JUNE 17: View of the modern high rise buildings on border with an old part of the city on June 17 2012 in Tallinn Estonia

Poland Is Set To Become a Large Economic Zone

Aerial view over the building materials processing factory. View from above.

Despite Public Anxieties, Migration is Playing a Key Role in ECA Growth

Bratislava city aerial panoramic view. Bratislava is the capital of Slovakia.

After Economic Shocks Armenia Plans for Macroeconomic Stability

yerevan armenia minister of finance

Ukraine’s Q2 Growth Climbs

kyiv ukraine emerging europe

Emerging Europe to Record Positive Growth Across the Board in 2018

coins growth

Hungary’s Solar Dreamer

hand sun and blue sky with copyspace showing freedom or solar power concept

Lithuania Handed Top Marks for Business Services

Beautiful panorama of Vilnius Old Town taken from Gediminas hill; Lithuania

Baltics Seek Lockstep With High Tech States

Euro money: Macro view of euro coin and bill. Suitable for financial, monetary, euro or European Union concepts and ideas

Budapest’s Property Boom Goes Nationwide


EconMin: Bulgaria — Number One Outsourcing Destination And an Island of Stability in Europe

Derek Chollet: There Is a Resurgence of Supporters of the Transatlantic Relationship

white house

Western Ukraine Could Be an Entry Point into the Country

‘Traditional Values’: A Potent Weapon Against LGBT Rights

gay rights putin

GSA Names Ukraine as UK’s Offshoring Destination of the Year

map of ukraine emerging europe

High Real Estate Prices at Home Force Czech Investors Abroad

Construction of the Petrin lookout tower in Prague Czech Republic

Digital Business Space Gives All Businesses an Office in Sarajevo

Sarajevo Bosnia and Herzegovina - August 24 2015. View from Vraca Memorial Park with building of Avaz Twist Tower

Košice Business Matchmaking Event Brings in Hungarians

kosice, slovakia

Economic Confidence Rises Across Eurozone

Regional News Outlets: The Real Target of Poland’s New Media Law?

poland media

Business Standards Are High in SEE But Vary Widely

Aerial view of The Cathedral of the Assumption in Varna

Albania’s Economy Booms Despite Political Infighting

Panorama view to the city Tirana Albania

Kaczyński Defends PiS Record

EU: Consumption Still Driving Growth

Poland to Switch from Emerging to Developed Market by September 2018

warsaw stock exchange

Measure, Strengthen, and Grow

dacia brand

EU May Offer Georgia, Moldova and Ukraine Customs Union and Schengen Access


Air Passenger Volumes Reach Record High in the Baltics


Leave a Reply

Your email address will not be published. Required fields are marked *