PEST ANALYSIS SLOVAKIA (SLOVAK REPUBLIC)

Political environment

According to OECD, in general, Slovaks are less satisfied with their lives than the OECD average, with 75% of people saying they have more positive experiences in an average day such as feelings of rest, pride in accomplishment, enjoyment, etc, than negative ones such aspain, worry, sadness, boredom, etc, and this estimated figure is slightly lower than the OECD average of 80%. Growth is projected to strengthen as higher export market growth boosts investment and exports, especially in the automotive industry. Private consumption will continue to grow, but is likely to face headwinds due to unfavourable conditions in a labour market characterised by high and persistent unemployment. Budgetary measures needed to reach a targeted fiscal deficit below 3% of GDP in 2014 will damp domestic demand. Constitutional debt ceilings are becoming binding and limit the flexibility of fiscal policy. Strengthening active labour market programmes is needed to make growth more job-intensive while sustaining productivity improvements. Public spending on infrastructure and education should remain a priority. 

 

Economical Environment

Slovakia is one of the fastest-growing economies of the European Union. The country’s economy is expected to reach $111.8 billion by the end of 2018. Slovakia has achieved high economic growth due to its economic reforms, inflow of FDI, in addition to its high exports and imports. Economic reforms and market-oriented government policy boosted the economic growth in Slovakia during the last decade. Increasing foreign demand has strengthened the trade sector and pushed economic growth. In the Slovak Republic, the average net adjusted disposable income of the top 20% of the population is an estimated $29,511/ year, whereas the bottom 20% earn an estimated $7,680/ year. Slovakia is a modern, private sector oriented economy that has enjoyed increased economic growth encouraged by international demand. 

Social Environment

The Slovakian economy suffers from high rate of inflation caused by high energy prices as well as an increasing VAT rate. The high unemployment rate is hampering economic growth and the retail and real estate industries, affecting consumer demand. The major strengths of the economy, include such as Slovakia offers a skilled, highly productive work force with relatively low wages, which is beneficial for the technology-based industry. Investment incentives are provided to different sectors to increase the business environment in Slovakia. Incentives are available to industries, technological centers, shared services centers, and tourism sectors. According to OECD, when asked to rate their general satisfaction with life on a scale from 0 to 10, Slovaks gave it a 5.9 grade, lower than the OECD average of 6.6. There is little difference in life satisfaction levels between men and women across OECD countries. This is true in the Slovak Republic, where men gave their life a 6.0 grade and women 5.9. 

 

Technological Environment

The proposed R&D sector of the Platform is extraordinary important for the Slovak economy. Slovakia has a long term tradition in Mechanical Engineering, Electrical Engineering, Electronics and Heavy industry. These industries need new development and the application of advanced technologies. Slovak enterprises shall be integrated into the global supply network of highly-specialised components for global producers of final goods. Slovak producers and their working power are acknowledged for their high quality and precise work.