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Czech Republic vs. Slovakia

Economy

Czech RepublicSlovakia
Economy - overview

Czechia is a prosperous market economy that boasts one of the highest GDP growth rates and lowest unemployment levels in the EU, but its dependence on exports makes economic growth vulnerable to contractions in external demand. Czechia’s exports comprise some 80% of GDP and largely consist of automobiles, the country’s single largest industry. Czechia acceded to the EU in 2004 but has yet to join the euro-zone. While the flexible koruna helps Czechia weather external shocks, it was one of the world’s strongest performing currencies in 2017, appreciating approximately 16% relative to the US dollar after the central bank (Czech National Bank - CNB) ended its cap on the currency’s value in early April 2017, which it had maintained since November 2013. The CNB hiked rates in August and November 2017 - the first rate changes in nine years - to address rising inflationary pressures brought by strong economic growth and a tight labor market.

Since coming to power in 2014, the new government has undertaken some reforms to try to reduce corruption, attract investment, and improve social welfare programs, which could help increase the government’s revenues and improve living conditions for Czechs. The government introduced in December 2016 an online tax reporting system intended to reduce tax evasion and increase revenues. The government also plans to remove labor market rigidities to improve the business climate, bring procurement procedures in line with EU best practices, and boost wages. The country's low unemployment rate has led to steady increases in salaries, and the government is facing pressure from businesses to allow greater migration of qualified workers, at least from Ukraine and neighboring Central European countries.

Long-term challenges include dealing with a rapidly aging population, a shortage of skilled workers, a lagging education system, funding an unsustainable pension and health care system, and diversifying away from manufacturing and toward a more high-tech, services-based, knowledge economy.

Slovakia’s economy suffered from a slow start in the first years after its separation from the Czech Republic in 1993, due to the country’s authoritarian leadership and high levels of corruption, but economic reforms implemented after 1998 have placed Slovakia on a path of strong growth. With a population of 5.4 million, the Slovak Republic has a small, open economy driven mainly by automobile and electronics exports, which account for more than 80% of GDP. Slovakia joined the EU in 2004 and the euro zone in 2009. The country’s banking sector is sound and predominantly foreign owned.

Slovakia has been a regional FDI champion for several years, attractive due to a relatively low-cost yet skilled labor force, and a favorable geographic location in the heart of Central Europe. Exports and investment have been key drivers of Slovakia’s robust growth in recent years. The unemployment rate fell to historical lows in 2017, and rising wages fueled increased consumption, which played a more prominent role in 2017 GDP growth. A favorable outlook for the Eurozone suggests continued strong growth prospects for Slovakia during the next few years, although inflation is also expected to pick up.

Among the most pressing domestic issues potentially threatening the attractiveness of the Slovak market are shortages in the qualified labor force, persistent corruption issues, and an inadequate judiciary, as well as a slow transition to an innovation-based economy. The energy sector in particular is characterized by unpredictable regulatory oversight and high costs, in part driven by government interference in regulated tariffs. Moreover, the government’s attempts to maintain low household energy prices could harm the profitability of domestic energy firms while undercutting energy efficiency initiatives.

GDP (purchasing power parity)
$375.9 billion (2017 est.)
$360.5 billion (2016 est.)
$351.9 billion (2015 est.)

note: data are in 2017 dollars

$179.7 billion (2017 est.)
$173.8 billion (2016 est.)
$168.2 billion (2015 est.)

note: data are in 2017 dollars

GDP - real growth rate
2.27% (2019 est.)
3.18% (2018 est.)
5.35% (2017 est.)
2.4% (2019 est.)
3.9% (2018 est.)
3.04% (2017 est.)
GDP - per capita (PPP)
$35,500 (2017 est.)
$34,200 (2016 est.)
$33,400 (2015 est.)

note: data are in 2017 dollars

$33,100 (2017 est.)
$32,000 (2016 est.)
$31,000 (2015 est.)

note: data are in 2017 dollars

GDP - composition by sector
agriculture: 2.3% (2017 est.)
industry: 36.9% (2017 est.)
services: 60.8% (2017 est.)
agriculture: 3.8% (2017 est.)
industry: 35% (2017 est.)
services: 61.2% (2017 est.)
Population below poverty line
9.7% (2015 est.)
12.3% (2015 est.)
Household income or consumption by percentage share
lowest 10%: 4.1%
highest 10%: 21.7% (2015 est.)
lowest 10%: 3.3%
highest 10%: 19.3% (2015 est.)
Inflation rate (consumer prices)
2.4% (2017 est.)
0.7% (2016 est.)
1.3% (2017 est.)
-0.5% (2016 est.)
Labor force
5.222 million (2020 est.)
2.511 million (2020 est.)
Labor force - by occupation
agriculture: 2.8%
industry: 38%
services: 59.2% (2015)
agriculture: 3.9%
industry: 22.7%
services: 73.4% (2015)
Unemployment rate
2.8% (2019 est.)
3.18% (2018 est.)
5% (2019 est.)
5.42% (2018 est.)
Distribution of family income - Gini index
25 (2015)
25.1 (2014)
23.7 (2015)
26.1 (2014)
Budget
revenues: 87.37 billion (2017 est.)
expenditures: 83.92 billion (2017 est.)
revenues: 37.79 billion (2017 est.)
expenditures: 38.79 billion (2017 est.)
Industries
motor vehicles, metallurgy, machinery and equipment, glass, armaments
automobiles; metal and metal products; electricity, gas, coke, oil, nuclear fuel; chemicals, synthetic fibers, wood and paper products; machinery; earthenware and ceramics; textiles; electrical and optical apparatus; rubber products; food and beverages; pharmaceutical
Industrial production growth rate
7.5% (2017 est.)
2.7% (2017 est.)
Agriculture - products
wheat, potatoes, sugar beets, hops, fruit; pigs, poultry
grains, potatoes, sugar beets, hops, fruit; pigs, cattle, poultry; forest products
Exports
$144.8 billion (2017 est.)
$131.1 billion (2016 est.)
$80.8 billion (2017 est.)
$75.53 billion (2016 est.)
Exports - commodities
machinery and transport equipment, raw materials, fuel, chemicals
vehicles and related parts 27%, machinery and electrical equipment 20%, nuclear reactors and furnaces 12%, iron and steel 4%, mineral oils and fuels 5% (2015 est.)
Exports - partners
Germany 32.8%, Slovakia 7.8%, Poland 6.1%, France 5.1%, UK 4.9%, Austria 4.4%, Italy 4.1% (2017)
Germany 20.7%, Czech Republic 11.6%, Poland 7.7%, France 6.3%, Italy 6.1%, UK 6%, Hungary 6%, Austria 6% (2017)
Imports
$134.7 billion (2017 est.)
$120.5 billion (2016 est.)
$80.07 billion (2017 est.)
$72.51 billion (2016 est.)
Imports - commodities
machinery and transport equipment, raw materials and fuels, chemicals
machinery and electrical equipment 20%, vehicles and related parts 14%, nuclear reactors and furnaces 12%, fuel and mineral oils 9% (2015 est.)
Imports - partners
Germany 29.8%, Poland 9.1%, China 7.4%, Slovakia 5.8%, Netherlands 5.3%, Italy 4% (2017)
Germany 19.1%, Czech Republic 16.3%, Austria 10.3%, Poland 6.5%, Hungary 6.4%, South Korea 4.5%, Russia 4.5%, France 4.3%, China 4.2% (2017)
Debt - external
$205.2 billion (31 December 2017 est.)
$138 billion (31 December 2016 est.)
$75.04 billion (31 March 2016 est.)
$74.19 billion (31 March 2015 est.)
Exchange rates
koruny (CZK) per US dollar -
23.34 (2017 est.)
24.44 (2016 est.)
24.44 (2015 est.)
24.599 (2014 est.)
20.758 (2013 est.)
euros (EUR) per US dollar -
0.885 (2017 est.)
0.903 (2016 est.)
0.9214 (2015 est.)
0.885 (2014 est.)
0.7634 (2013 est.)
Fiscal year
calendar year
calendar year
Public debt
34.7% of GDP (2017 est.)
36.8% of GDP (2016 est.)
50.9% of GDP (2017 est.)
51.8% of GDP (2016 est.)

note: data cover general Government Gross Debt and include debt instruments issued (or owned) by Government entities, including sub-sectors of central, state, local government, and social security funds

Reserves of foreign exchange and gold
$148 billion (31 December 2017 est.)
$85.73 billion (31 December 2016 est.)
$3.622 billion (31 December 2017 est.)
$2.892 billion (31 December 2016 est.)
Current Account Balance
-$678 million (2019 est.)
$1.259 billion (2018 est.)
-$3.026 billion (2019 est.)
-$2.635 billion (2018 est.)
GDP (official exchange rate)
$215.8 billion (2017 est.)
$95.96 billion (2017 est.)
Stock of direct foreign investment - at home
$185.6 billion (31 December 2017 est.)
$139.6 billion (31 December 2016 est.)
$69.92 billion (31 December 2017 est.)
$54.03 billion (31 December 2016 est.)
Stock of direct foreign investment - abroad
$54.39 billion (31 December 2017 est.)
$43.09 billion (31 December 2016 est.)
$21.29 billion (31 December 2017 est.)
$15.06 billion (31 December 2016 est.)
Market value of publicly traded shares
$58.83 billion (31 December 2017 est.)
$40.74 billion (31 December 2016 est.)
$44.5 billion (31 December 2015 est.)
$4.567 billion (31 December 2016 est.)
$4.634 billion (31 December 2015 est.)
$4.732 billion (31 December 2014 est.)
Central bank discount rate
0.05% (31 December 2017)
0.05% (31 December 2016)

note: this is the two-week repo, the main rate CNB uses

0% (31 December 2017 est.)
0% (31 December 2016 est.)

note: this is the European Central Bank's rate on the marginal lending facility, which offers overnight credit to banks from the euro area; Slovakia became a member of the Economic and Monetary Union (EMU) on 1 January 2009

Commercial bank prime lending rate
3.59% (31 December 2017 est.)
3.91% (31 December 2016 est.)
2.44% (31 December 2017 est.)
2.7% (31 December 2016 est.)
Stock of domestic credit
$147.1 billion (31 December 2017 est.)
$124.3 billion (31 December 2016 est.)
$85.56 billion (31 December 2017 est.)
$70.84 billion (31 December 2016 est.)
Stock of narrow money
$177.2 billion (31 December 2017 est.)
$133.5 billion (31 December 2016 est.)
$56.46 billion (31 December 2017 est.)
$45.63 billion (31 December 2016 est.)

note: see entry for the European Union for money supply for the entire euro area; the European Central Bank (ECB) controls monetary policy for the 18 members of the Economic and Monetary Union (EMU); individual members of the EMU do not control the quantity of money circulating within their own borders

Stock of broad money
$177.2 billion (31 December 2017 est.)
$133.5 billion (31 December 2016 est.)
$56.46 billion (31 December 2017 est.)
$45.63 billion (31 December 2016 est.)
Taxes and other revenues
40.5% (of GDP) (2017 est.)
39.4% (of GDP) (2017 est.)
Budget surplus (+) or deficit (-)
1.6% (of GDP) (2017 est.)
-1% (of GDP) (2017 est.)
Unemployment, youth ages 15-24
total: 6.7%
male: 6.4%
female: 7.2% (2018 est.)
total: 14.9%
male: 14.3%
female: 16.1% (2018 est.)
GDP - composition, by end use
household consumption: 47.4% (2017 est.)
government consumption: 19.2% (2017 est.)
investment in fixed capital: 24.7% (2017 est.)
investment in inventories: 1.1% (2017 est.)
exports of goods and services: 79.9% (2017 est.)
imports of goods and services: -72.3% (2017 est.)
household consumption: 54.7% (2017 est.)
government consumption: 19.2% (2017 est.)
investment in fixed capital: 21.2% (2017 est.)
investment in inventories: 1.2% (2017 est.)
exports of goods and services: 96.3% (2017 est.)
imports of goods and services: -92.9% (2017 est.)
Gross national saving
26.9% of GDP (2017 est.)
27.5% of GDP (2016 est.)
28.2% of GDP (2015 est.)
20.6% of GDP (2017 est.)
21.1% of GDP (2016 est.)
22.5% of GDP (2015 est.)

Source: CIA Factbook