Slovak Economy Grew 4.1 Percent over Q1 2003

Gross domestic product (GDP) of the Slovak Republic in real terms was SKK 268.4 billion in the first quarter of 2003, up 4.1 percent in fixed prices when compared with the same period of the previous year. The economic growth in current prices stood at 9.6 percent y/y, according to preliminary figures of the Slovak Statistics Office. The GDP increase was by 0.2 percentage points higher compared with Q1 2002. Thus the economic growth in the first quarter of 2003 was in line with estimations of analysts, predicting a slowdown in the economic growth to between 3.5-4.7 percent.

Growth of Nominal Wages was 6.5 Percent in Q1 2003

Pace of y/y growth of average monthly nominal wage in Slovakia slowed down in the first quarter of this year. Compared with Q1 2002 the average monthly nominal wage in Slovakia went up 6.5 percent to SKK 13,082. Lower increase of nominal wage and higher growth of consumer prices caused that after an 18-month continuous growth real wage dipped 1 percent, the Statistics Office informed.

Q1 2003 Profit of Slovak Companies was SKK 52.8 Bln.

Preliminary results indicate that companies in Slovakia generated a profit of SKK 52.8 billion over the first quarter of 2003. Compared with the previous year’s period this represents an increase by 46.8 percent. Non-financial corporations increased their profit by 60.9 percent to SKK 51.9 billion. On the other hand, financial corporations reached a profit of only SKK 900 million, what was by 75.6 percent less than in Q1 2002. The profit of branches producing market products boosted significantly, up 72.6 percent. The profit of branches focusing on providing of services grew 13.2 percent, the Slovak Statistics Office reported on Thursday.

Number of Working People in Slovak Economy was 2.13 Mln. over Q1 2003

In the first three months of this year, the number of people working in Slovak economy increased 1.2 percent to 2.13 million. The increase mirrors the improving relation between bid and demand. The number of businessmen with no employees increased 18.6 percent to 141,900 while the number of businesspeople with employees went up 3.2 percent to 55,300. The number of household members working in family businesses stood at 2,200, up 15.8 percent from a year ago. The number of employees in the Slovak economy decreased a mere 0.1 percent y/y to 1.926 million, the Statistics Office informed.

President Schuster Again Vetoes Revision to Telecommunications Law

Slovak President Rudolf Schuster has vetoed gain the revision to the telecommunications law. President’s spokesman Jan Fule has informed SITA. The revision unbundles local loops, changes license proceedings and strengthens powers of the market regulator, the Telecommunications Office. President Schuster returned the revision to parliament for re-discussion due to contradictions between regulations in the revision and regulations of the law not affected by the revision.

Trade Unions Plan a Nationwide Warning Strike for September

The Trade Unions Confederation (KOZ) will prepare a nationwide strike with a limited duration for September. The KOZ strike committee has agreed to go ahead with preparations. KOZ vice-president Eugen Skultety informed the press about the plans. He admits that some trade unions organizations might prepare protest actions for summer months as well. Mr. Skultety stressed that actions of trade unionists would depend on the willingness of the Slovak government to accept their requirements. He added that it has ignored warning signs of trade unionists so far while he mentioned recent protest actions as blocking of border-crossings and slowing down of traffic on highways.

Tender for SE Privatization Still Open for Potential Investors

The privatization tender for the sale of a minority stake in the dominant power producer Slovenske Elektrarne (SE) is still open and thus any potential investor can submit a bid. This is a result of a legal analysis of the Economy Ministry. According to Economy Minister Robert Nemcsics, however, investors must show interest in the tender as it was promulgated in August 2002.

Construction of 2,239 Apartments Completed in Q1 2003

The Slovak Statistics Office informed SITA on Thursday that a total of 2,239 apartments were completed in Slovakia in the first quarter of this year, out of which 1,248 were in family houses. Compared with the previous year the number of completed units dropped by 19 percent when the number of apartments in family houses decreased by 30.9 percent.

Statistics Office Estimates Economic Growth at 4.1 percent for 2003

The Slovak Statistics Office estimates that the economic growth in Slovakia would reach 4.1 percent this year. Average inflation was 8.4 percent in June and it should be at 8.7 percent in December. Unemployment rate is predicted at 17.8 percent. The average nominal monthly wage of the Slovakia’s economy should grow by 7.5 percent y/y to SKK 14,520. However, eventually real monthly wage should shrink by 0.8 percent y/y. The Slovak Statistics Office published its estimates on Thursday.

UniBanka Reported SKK 251.3 Mln. Profit Last Year

According to International Accounting Standards (IAS), UniBanka ended last year with a net profit of SKK 251.3 million. Total revenues of the bank amounted to SKK 1.767 billion as of December 31, 2002. Its balance-sheet total reached SKK 35.232 billion, Jozef Barta, director general of the bank stated at a press conference on Thursday.

Chamber of Commerce Disagrees with Proposed Model of Tax Reform

The Slovak Chamber of Commerce and Industry (SOPK) considers the primary purpose of the Finance Ministry designed tax reform is to increase state budget revenues and it does not guarantee the creation of a favorable business environment, as was declared earlier by the government. According to SOPK chairman Peter Mihok, attention is only being paid to the 19-percent single rate tax, but no attention has been attributed to items imputable and deductible from the tax base, which is decisive for businessmen. “Tax reform in the version proposed is mainly suitable for foreign investors and companies with high export, but not for producers dependent on the domestic market,“ he stated. However, he said that a more transparent tax system and lower direct taxes would encourage company’s investment activities, enterprise development and contribute to increased employment.

Slovnaft Raises Fuel Prices by SKK 0.60 on Thursday

Slovakia’s largest crude oil refinery Slovnaft a.s. Bratislava, after more than a month, increased petrol and diesel prices by SKK 0.60 per liter in its petrol station network from Thursday, June 12. The company is responding to crude oil price fluctuations in May and their significant growth on the global market in early June, Slovnaft spokesman Lubomir Zitnan told SITA. Slovnaft last changed of its fuel prices on May 6, after crude oil prices reached USD 23 to 24 per barrel. After the prices in May of about USD 26 per barrel, the price of crude oil climbed to USD 28 per barrel in June and on Wednesday, June 11, it reached USD 28.96 per barrel.

Economic Growth in Slovakia Remains the Highest in Central Europe

Growth of the Gross domestic product (GDP) in Slovakia remains the highest in central Europe. The gross domestic product of Slovakia grew 4.1 percent over the first quarter of 2003 compared with the previous year’s first quarter, which were the highest growth dynamics reported for the first quarter of the year since 1998. Results of the Q1 economic growth were a bit above analysts’ average expectations, predicting this at between 3.5-4.7 percent.

Construction of Lucenec-South Industrial Park to Start this Autumn

The first building phase of Lucenec-South industrial park, i.e. its infrastructure and initial facilities, will begin this autumn. A year later, a Greek firm should launch production of assembled wooden constructions and new materials in the first hall. The firm should employ 350 people, director of Prim park, a.s. Lucenec, Alexander Molnar, told the press on Thursday.

Nuclear Supervisory Experts Hold Forum in Bratislava

Experts of supervisory authorities from countries operating VVER type nuclear reactors, will deal with European Commission cooperation in nuclear power plant safety evaluation on Thursday and Friday in Bratislava. Discussion on the importance of pushing for a nuclear safety convention on a national level will also be on the agenda, as well as evaluation of the condition of operational nuclear power stations, Slovak Nuclear Supervisory Office (UJD) spokesman Mojmir Seliga informed SITA.

Kanik says Slovakia Lacks Funds to Raise Pensions more than 6%

Labor Minister Ludovit Kanik commented for SITA the decision by President Rudolf Schuster requesting an 8 percent hike in retirement pensions. Earlier in the day the president announced he would not sign the law increasing pensions in Slovakia by 6 percent from July of this year and returned it to parliament with an appeal to deputies to increase pensions by at least 8 percent.

Uniqa a.s. Insurer Reports SKK 15.4 Mln. Net Profit in 2002

Insurance company Uniqa, a.s., reported a 30 percent y/y growth in gross billed premiums to SKK 1.271 billion in 2002. Of this, billed premiums in non-life insurance accounted for SKK 989.3 million, up 36 percent y/y. The growth rate in the life insurance segment was lower, when it rose 12.5 percent y/y to SKK 281.7 million, director general Harald Chrstos informed SITA. The insurer plans growth in the volume of billed premiums at the same level as last year.

Ambassador Weiser says Slovakia is Best in Europe for Investing

At an investment conference “Why Invest in Slovakia?” organized by the U.S. Embassy to Slovakia, American Ambassador Ronald Weiser stated that Slovakia is the best country in Europe for investments. Conference participants were U.S. investors who arrived in Slovakia to become acquainted with business activities in medium-sized towns and municipalities. Mr. Weiser expects that the conference will attract foreign investments to various regions of Slovakia.

MONEY MARKET: NBS Accepted SKK 28.2 Bln in Bill Auction

Attention of the interbank market on Thursday focused on an auction of National Bank of Slovakia (NBS) bills. The central bank accepted bank bids of SKK 28.8 billion in full. UniBanka dealer Jozef Hempfinger said that this means that the accepted volume exceeds maturing bills by over SKK 9 billion. On Friday, SKK 18.75 billion from the maturing central bank bills will return to the market.

FBE’s Ian Mullen Expects Slovak Banks to Integrate Easily into EU

The Slovak banking sector will have no problems integrating into European structures, since there is a high standard of bank regulation in Slovakia, said Ian Mullen, chairman of the European Banking Federation (FBE) executive board, at a press conference on Thursday. Mr. Mullen is attending a meeting of the FBE management board in Bratislava. He said that the main advantage of the Slovak banking sector is that it has strong foreign partners.

STOCK MARKET: Falling VUB and Slovnaft Shares Weaken SAX Index

On Tuesday, influenced by the lower share price of crude oil refiner Slovnaft and VUB bank, the official SAX share index lost 0.36 percent or 0.54 points to close at 150.96 points. Turnover on the Bratislava Stock Exchange (BCPB) steeply dropped from SKK 2.074 billion on Wednesday to SKK 174.2 million on Thursday with SKK 892,000 in share trading.

FOREX MARKET: Slovak Crown Firms 9 Hallers on Thursday

After the morning’s reaction to positive Q1 GDP results, the Slovak crown leveled at 41.42/41.46 SKK/EUR, staying at this level until the end of trading on Thursday. The exchange rate got to this level from the initial 41.51/41.54 SKK/EUR when published GDP figures beat market expectations, said CSOB dealer Richard Brza.

Russian Oil Company Yukos is Intensifying Activities in Slovakia

Crude oil pipeline operator Transpetrol, 49 percent of which is controlled by Russian oil company Yukos, plans investments this year at about last year’s level of SKK 387.2 million. The largest portion of investment should be oriented towards expansion of crude oil storage capacities. “In the case laws change related to privatization of strategic companies, we would be interested in increasing our share in Transpetrol, however, we will not be more specific until it happens,” stated director of the Yukos representation for central and eastern Europe, Imre Fazakas.

ATO Disagrees with President’s Veto of Telecommunication Bill

The Association of Telecommunication Operators respects the right of the president, who on Thursday returned to parliament the approved telecommunication bill for revision. To do so, however, calls public attention to the fact that President Rudolf Schuster has placed obstacles in the path of liberalizing the telecommunication market for the second time with his repeated refusal to sign the telecommunications bill, reads the ATO statement commenting on the president’s decision, provided to SITA by ATO chairman Vladimir Ondrovic.

Finance Minister Defends Planned Introduction of Single Rate VAT

Introduction of single rate value added tax (VAT) will simplify the taxation system and reduce necessary administration for taxpayers and tax offices, said Finance Minister Ivan Miklos in response to statements by the Slovak Chamber of Commerce and Industry (SOPK), which disagrees with the introduction of the single rate VAT. SOPK chairman Peter Mihok said that tax reform in the proposed version is mainly suitable for foreign investors and companies with high exports, but not for producers dependent on the domestic market. In reaction to this statement, Mr. Miklos said that these statements lack any serious arguments and are misleading and populist. On the contrary, Mr. Miklos claims that the single rate VAT will prevent speculative efforts, which the two VAT rates made possible.