Slovakia’s economy grew 5.5 percent y/y during the first quarter of 2004 while this growth amounted to 4 percent one year ago. Compared with the final quarter of 2003 it was by 0.8 percentage points higher. Thus the economic growth in Q1 2004 exceeded bank analysts’ estimates, who had placed it between 4 percent and 4.3 percent. Preliminary Slovak Statistics Office figures indicate that Slovakia generated a gross domestic product (GDP) of SKK 308.2 billion in Q1 2004. In current prices GDP rose 13.2 percent y/y. The Slovak Statistics Office released these figures on Thursday.

Slovakia Sees Monthly Inflation of 0.4 Percent in May

Consumer prices in Slovakia increased by 0.4 percent over May. Year-on-year headline inflation reached 8.3 percent in the fifth month, the Slovak Statistics Office reported on Thursday. In May monthly core inflation, which determines the rate of consumer price growth cleared of the influence of regulated prices and other administrative measures, was 0.3 percent. Slovakia reported a monthly core deflation of 0.1 percent in April. Compared with May of the previous year, core inflation amounted to 2.8 percent in May 2004.

Unemployment Rate Increased to 19.3 Percent in Q1 2004

Following a two-year downward unemployment trend in Slovakia, the number of unemployed increased by 6 percent to 515,500 people in the first three months in 2004. The average unemployment rate rose by 0.9 percentage points to 19.3 percent, informed the Slovak Statistics Office.

Growth in Average Nominal Wage Pushed Up Real Wages as well in Q1

In Q1 2004 the average nominal monthly wage in all selected branches of the Slovak economy amounted to SKK 14,531, rising 11.2 percent compared with Q1 2003. This was the highest increase in the average nominal monthly wage since the final quarter of 1997. The growth was partly influenced by moving benefit payments for the second half of 2003 to the beginning of this year. The acceleration of the nominal wage growth reflected in the real wage growth as well, pushing it up by 2.7 percent y/y, the Statistics Office informed SITA.

Formation of Gross Fixed Capital Resumed Growth in Q1 2004

Growth in the formation of gross fixed capital resumed on a year-on-year basis in Q1 2004 after an almost two year decline. Compared with Q1 2003 it was 0.9 percent higher. In current prices this represents a growth by 3.8 percent. The total formation of gross capital amounted to SKK 77.1 billion over the first three months of 2004 when the formation of growth fixed capital was SKK 68.2 billion. Inventories rose by SKK 8.9 billion, the Statistics Office of the Slovak Republic announced.

Cestne Stavby Kosice Boosted its Profit to SKK 22.5 Mln. in 2003

Kosice-based construction company Cestne Stavby a.s., closed 2003 with a net profit of SKK 22.5 million. Compared with the previous year this means a boost of over 27 percent. The operating profit amounted to SKK 58.7 million and losses from financial operations amounted to SKK 19.7 million. Output shrank by SKK 6.7 percent to SKK 872.3 million and production costs were at SKK 585.1 million. Company shareholders decided that almost SKK 20.3 million from the profit would be used to cover losses from previous years and SKK 2.3 million would remain in the reserve fund. The generated added value was at roughly the previous year’s level and totaled SKK 287.2 million. This year the company plans to earn a gross profit of SKK 30 million on revenues of SKK 870 million.

Subsistence Level to Increase More than Originally Expected

The basic rate of the subsistence level will increase more than was originally expected as of July 1. The Ministry of Labor, Social Affairs and Family informed on Thursday that the subsistence level and parental benefits would be valorized by 8.7 percent instead of 7 percent, originally indicated by figures calculated by the Slovak Statistics Office. Thus the basic rate of the subsistence level will increase from current SKK 4,210 by SKK 370 to SKK 4,580. The subsistence level for another jointly assessed person will increase by SKK 260 to SKK 3,200 and the subsistence level for a dependent child will be raised by SKK 170 to SKK 2,080.

B.O.F. Leasing Company Plans to Float SKK 500 Mln. Bond Issue

Leasing company B.O.F., a.s. Bratislava plans to issue bonds totaling SKK 500 million. B.O.F. should sell them from June 21 to September 30. The face value of this bearer security, issued in book-entry form, will be SKK 100,000. Bonds with a fixed interest rate of 6.3 percent p.a. will mature in 2008. According to data published by B.O.F., the firm will use proceeds from their sale for leasing operations.

VUB Generali DSS‘ Ambition to Control 20 % of Pension Fund Market

Just emerging pension fund management company VUB Generali DSS would like to recruit 200,000 clients. This number would secure the company 20 percent of the Slovak pension fund market, VUB director general Tomas Spurny told journalists on Thursday. According to him this share would correspond with the VUB share on the Slovak bank market.

Transport Ministry Prepares a Draft Bill on Highway Company

The cabinet should soon deal with a draft bill on the so-called highway company, prepared by the Transport Ministry. The company’s income will comprise of fees for the use of highways and the road network and later highway tolls. This joint-stock company will gradually reduce the need for public finances to develop first-class roads via the introduction of fees and drawing of loans and revenues separate from the state budget. The Transport Ministry, as a sole shareholder, will thus remain responsible for highway infrastructure development. The law should take effect on January 1, 2005.

Slovak Brewers Complain about 15% Drop in Sales up to May

The situation that arose after the increase in excise tax on beer in August last year, according to the brewers, is catastrophic. As president of the Slovak Association of Beer and Malt Producers Stefan Karsay informed, beer sales for the first five months of this year dropped in a y/y comparison by more then 15 percent and in May by 27 percent. „The brewers are crying out for help, because the situation arising after last year’s tax increase is, to put it mildly, critical,“ stated Mr. Karsay.

Q1 GDP Growth in Slovakia Fastest Since 1998

The Q1 GDP growth of 5.5 percent in fixed prices was the highest figure to be reported since the first quarter of 1998. The Statistics Office’s vice-chairman Stefan Schill labeled the Q1 macroeconomic results as a continuing acceleration of the economy, begun in 2000. “Based on the chief tendencies in the Slovak economy the Statistics Office does not expect GDP growth in 2004 to be lower than 5.5 percent,” Mr. Schill told a news conference on Thursday.

Current Income of Slovak Households in Q1 Reached SKK 242.8 Bln.

The current income of households in Slovakia reached SKK 242.8 billion over the first quarter of this year, up 1.1 percent y/y in nominal terms, however real income dipped 1.1 percent compared with Q1 2003, reported the Slovak Statistics Office. Salaries of employees totaled SKK 96.8 billion, up 8.8 percent y/y, gross mixed income of businesspersons was SKK 69.8 billion, up 8.3 percent, social benefit payments accounted for SKK 36.3 billion, up 4.6 percent, other transfer payments grew 0.9 percent to SKK 8.9 billion and income from property dropped 8.3 percent to SKK 7.3 billion.

Messer Slovnaft with EMAS Environmental Management System

Messer Slovnaft, s.r.o., which produces and cleans technical gases in Slovnaft oil refinery, is the first industrial production company in Slovakia to hold an environmental management system certified in line with EMAS. EMAS is the internationally acknowledged system of environmentally oriented management and audit, through which companies evaluate, report, and improve their environmental performance. Spokeswoman and PR expert at Slovnaft Kristina Felova informed SITA news agency.

SEPS will Pay SKK 135 Mln. in Dividends from Profit in 2003

Operator of the national electricity transmission network Slovenska Energeticka a Prenosova Sustava (SEPS) that is entirely in state’s hands, will pay out dividends amounting to SKK 135 million from its last year’s profit. Aside from this decision, the company’s shareholders agreed on Thursday to allocate a portion of the 2003 profit to the special purpose fund to secure its investments. The portion earmarked represents SKK 471.17 million, SEPS spokeswoman Alena Melicharkova told SITA.

STOCK MARKET: SAX Index Hits All Time High Since 1997 on Thursday

The official SAX share index hit its all time high since 1997, supported by shares of all companies of the index base traded on Thursday, including refiner Slovnaft, gas storage company Nafta, power engineering company SES Tlmace and pharmaceutical maker Biotika. The index got to 196.97 points. The last time it was higher was on April 15, 1997, when it reached 197.08 points. The SAX thus grew 1.06 percent or 2.06 points from Wednesday. Turnover on the Bratislava Stock Exchange (BCPB) significantly decreased from SKK 2.442 billion on Wednesday to SKK 276.3 million on Thursday with merely SKK 2.23 million in share trading.

SEZ Krompachy with SKK 151.12 Mln. Revenues Last Year

Engineering company SEZ Krompachy, a.s. closed last year with operating revenues amounting to SKK 151.12 million, which is approximately the same figure as that achieved in 2002. Profit increased 10 percent to SKK 0.83 million, reported the company.

Corporations in Slovakia Earned Q1 Profit of SKK 50.363 Bln.

Preliminary figures show that financial and non-financial corporations in Slovakia generated a profit of SKK 50.363 billion in the first quarter of this year, which is 2.9 percent less than in the same period of last year. Non-financial companies earned the highest portion of the profit, amounting to SKK 49.2 billion, which is SKK 1.8 billion, or down 3.6 percent y/y. The development rate was influenced by the high comparison basis last year, when one-third of annual profit was made in the first quarter alone on growth of over 60 percent y/y. Financial corporations showed a profit of SKK 1.213 billion in three months of this year, up 33.2 percent y/y, the Slovak Statistics Office informed SITA on Thursday.

MONEY MARKET: Waiting for NBS‘ Interest Rate Decision

Trading on the interbank money market was nervous on Thursday. As CSOB dealer Milos Labaj told SITA, low prices of interbank deposits already incorporate market expectation that the central bank will again cut key interest rates by 50 to 100 basis points. The Bank Council of the National Bank of Slovakia (NBS) will meet on Friday, but it should not address the question of interest rates, which it always assesses at the end of the month. „However, the NBS already unexpectedly changed interest rates in the past,“ Mr. Labaj said. The market therefore expects that the central bank could also repeat this move on Friday.

FOREX MARKET: Crown Reaches New High of 39.850/870 SKK/EUR

The Slovak crown reached its new high against the euro of 39.850/870 SKK/EUR at the end of trading on Thursday. CSOB dealer Richard Brza stated that the Slovak currency was already supported at the beginning of the day by positive results of higher than expected growth of the gross domestic product (GDP) in Q1. The crown firmed from 39.930/940 SKK/EUR at the beginning to 39.900 SKK/EUR. The Slovak crown erased these gains and weakened to 39.930/940 SKK/EUR.

SKK 6.31 Bln. Saved Last Year Thanks to Public Procurement

According to the Public Procurement Office (UVO), government controlled procurers signed contracts totaling SKK 61.2 billion last year and contributed with more than SKK 6.31 billion to reduction of projected expenditures thanks to application of the public procurement law. UVO chairwoman Rozalia Molnarova told a news conference on Thursday that the average saving accounted for 9.35 percent of estimated price. The share of public procurement in gross domestic product reached 5.12 percent in 2003.

Slomedical Plans to Employ 500 People by 2007

Slomedical, s.r.o. Vrable plans to recruit five hundred employees by the year of 2007 within its investment into the construction of a new production facility and launching its production. Martin Maruska, spokesman for Prime Minister Mikulas Dzurinda stated that from March of this year the company with German capital has been working in rented premises and employs fifteen people. Representatives of the company plan to finish the construction of the new production facility in the industrial park IGP in Vrable by the end of this year. The company should start production there by the end of March next year. Prime Minister Dzurinda attended the groundbreaking ceremony of the new production facility of Slomedical on Thursday.

Inflation Rate in May was in Line With Analysts‘ Expectations

Inflation in May was in line with analysts‘ expectations. According to ING Bank analyst Jan Toth, opinions were again not confirmed that predicted a price boom after Slovakia’s accession to the European Union. Consumer prices in May grew by 0.4 percent in comparison with April. headline inflation in May on a year-on-year basis was 8.3 percent.