Showing posts with label growth. Show all posts
Showing posts with label growth. Show all posts

Slovakia Growth statistics Expenditure on GDP (% real change)

Slovakia Growth statistics
Expenditure on GDP (% real change)

light blue = 2011
darker blue = 2012
 
Private consumption
Government consumption
 
Gross fixed investment
 
Exports of goods & services
 
Imports of goods & services
Source: Economist Intelligence Unit

 

Origin of GDP (% real change)

light blue = 2011
darker blue = 2012
 
Agriculture
 
Industry
 
Services
Source: Economist Intelligence Unit
 
 

Angela Merkel, Germnay's chancellor is coming to Bratislava

Iveta Radicova, Prime Minister of Slovakia meets Angela Merkel in Bratislava, Slovak Republic

BRATISLAVA, Slovakia - German Chancellor Angela Merkel is travelling to the Slovak capital to meet her counterparts from Central and Eastern Europe in talks expected to focus on energy security and regional co-operation.

The future of the eurozone and other EU-related issues are also high on the agenda of the annual meeting of prime ministers of Slovakia, the Czech Republic, Hungary and Poland whose countries form an informal grouping known as the V4.

Merkel, together with Austrian Chancellor Werner Faymann and Ukraine's Prime Minister Mykola Azarov are scheduled to join Tuesday's meeting that marks the 20th anniversary of the group.

On infectious greed as a development model...

One of the leading lights in the current government of Slovakia opined that Slovakia should attempt to become more like singapore or hong kong, a small extremely liberal enclave in the wider market of the EU and eurozone.

The allure of places like this should be tempered by the following facts.

  1. they are usually accidents of history and are usually not countries proper (this is true of both Hong Kong and Singapore)
  2. They have massive economies right next to themselves, and the rich of these countries usually uses these territories as a place to hide their money from taxes.
  3.   ermm.. this... http://video.ft.com/v/621971804001/Hong-Kong-s-property-extremes-cage-the-poor

Wall Street Journal interviews Slovak Prime Minister Iveta Radicova on the reasons why Slovakia refuses to bail out Greece with further loans

Wall Street Journal interviews Iveta Radicova on the reasons why Slovakia refuses to bail out Greece with further loans




http://online.wsj.com/video/slovak-pm-wants-rules-on-defaults-for-euro-area/27574DAA-D4C6-4FE8-B835-89E4A58BDE29.html 

Iveta Radicova is clearly an intelligent leader, and she explained that Slovakia is participating in an Eurozone insurance policy for the protection of the euro due to unforseen and unavoidable future circumstances.

However she politely suggested that the greek situation is not justifiable as a bailout, because it was hardly an unavoidable situation and that the indirect beneficieries of such bail-outs (often rich investors and banks) need to accept the risk of their investments and the tax payer cannot be there to pick up the pieces if the investor does not do their due dilligence. This is a point made by several economists over the years when bailouts started with Asia & Mexico under Clinton.

In other words the PM of Slovakia noted her and her country's aversion to a development model largely based on ever increasing borrowing. She expressed her solidarity with the greek people but not with the practices of their governments in the last 20-30 years in relation to debt.

This is not just words, Slovakia has a tiny national debt as a % of GDP which is even smaller than Finland and about half that of Germany at around 35%, moreover this is likely to decline further. One cound say that Slovakia is a very debt averse country culturally, and seems to be baffled by the prevalence of the credit card and other forms of indebtedness in the anglosaxon world.

The Slovak Prime Minister called for stronger regulation of euro-zone financial markets and for allowing overly-indebted countries to undergo and orderly default rather than throwing them new credit lifelines.

Earlier this year Slovakia, the newest and poorest of the 16-rich-nation currency group, caused a stir around Europe when it refused to be part of a EUR110 billion bailout for Greece, agreed on in May by euro-zone member countries and the International Monetary Fund. However it should remembered that Slovakia's share is fairly small as it is a small country of only 5 million people.

5% GDP - 2nd quarter of 2010 - Slovakia’s economy has best GDP growth among all countries in the European Union

In the second quarter of 2010 Slovakia’s economy is posted the best GDP growth among all countries in the European Union.


The growth is spiking but it is not yet the stellar numbers achieved in the past given the international situation. Still Slovak growth looks set to remain strong for the rest of the year. Germany energising economy is a very big trade partner for Slovak business, and it certainly helped to generate the nearly 5-percent pro rata jump in Slovakia’s GDP.


In the second quarter, the country’s GDP grew by 4.6 percent year-on-year, following just slightly stronger growth of 4.8 percent in the first quarter, according to a flash estimate released by Slovakia’s Statistics Office on August 13. Total GDP in the second quarter reached €16.340 billion.


“The ongoing strength of the growth in the second quarter real GDP in Slovakia was, overall, more of a positive surprise,” Vladimír Vaňo, chief analyst with Volksbank.

In the first half of 2010, Slovak exports increased on average by 20.7 percent year-on-year, accounting for a similarly stellar recovery in Slovakia’s annual industrial production by an average of 22 percent in the first six months, Vaňo noted.

“Compared with expectations of other market watchers of around 4 percent year-on-year and our estimate of 4.3 percent, the year-on-year growth of GDP was faster than expected,” Martin Lenko, senior analyst with VÚB Banka, said.


Though the detailed structure of the growth in Slovakia’s GDP is not fully known yet, Lenko said that household consumption in Slovakia probably recorded only a moderate increase in the second quarter, similar to its performance in the first quarter, due to the country’s still high unemployment rate (mostly in the east of the country) which is falling only very slowly.

“Slovak quarterly expansion of 1.2 percent quarter-on-quarter runs ahead of results of similarly open economies of the Czech Republic or Hungary,” Vaňo said. “However, the overall eurozone economy, a destination for roughly half of Slovak exports, recorded a quarterly real growth of 1.0 percent in the second quarter. In other words, recovery of the export markets alone does not suffice in explaining the resilience of the Slovak economy.”


According to Vaňo, gauging from these comparisons as well as from the strength of the recovery in industrial production in the first half-year together point to Slovakia continuing to reap the benefits of euro introduction via a more resilient economic recovery. He believes this is explained by a competitive edge brought to Slovak exporters by the euro through lower interest rates but more importantly because of exchange rate stability and significant savings in the administrative costs of foreign trade.


“The faster than expected growth of GDP in Slovakia, and also in Germany, in the first half of the year is forcing us to revise the estimate of annual growth of GDP in 2010,” Lenko said. “We estimate that growth in real GDP will reach an average of 4.2 percent year-on-year in 2010 as opposed to our original estimate of 3 percent.”

The rosier growth numbers for Slovakia’s GDP have not yet been reflected in significant job growth in the country’s labour market.

Slovak PM meets Vladimir Putin (Russian PM) about joint gas venture to link Austria to russian gas

Slovak PM meets Vladimir Putin (Russian PM) about joint gas venture to link Austria to russian gas. The Slovak side seems to want to incentivise Russia through a 3-party win-win.

What is being proposed is to link the Austrian market to the soviet era pipeline that ends in Bratislava. This pipeline only needs a few kilometers of extension to be linked to the austrian market and network.

Click on the map to see more detail:



Slovakia will gain by giving Russia a big reason not to cut supply to europe as it would inconvenience more european countries.

Below there is a video talking about the fledgling deal:







In related news: According to the European Union energy commisioner gas consumers won’t suffer if Ukraine starts another transit war with Russia this winter.

Kiev blocked transit pipelines from Russia last January in a payment row, leading to power cuts across the EU. But Energy Commissioner Andris Piebalgs says they've agreed ways to avoid Ukraine altogether.

AP: “Our gas storages are 100% full, we've increased all types of switching opportunities for countries which can't cover gas for a very long period. We also have emergency plans if they are needed. On the Russian side I believe there are also plans for increasing supply from other pipelines if there is a problem with one of them. During January there will be more gas flowing through the Yamal Europe pipeline. So it is important that both sides reunite and that the final consumer does not feel threatened at all.”

More background on the pipeline and it's significance (from wikipedia):

Druzhba pipeline
(Russian: нефтепровод «Дружба»; also had been referred as the Friendship Pipeline and the Comecon Pipeline) is the world's longest oil pipeline, it carries oil some 4,000 kilometres (2,500 mi) from southeast Russia to points in Ukraine, Belarus, Poland, Hungary, Slovakia, Czech Republic, and Germany.[1] The name "Druzhba" means "friendship", alluding to the fact that the pipeline was intended to supply oil to the energy-hungry western regions of the Soviet Union, to its "fraternal socialist allies" in the former Soviet bloc, and to western Europe. Today, it is the largest principal artery for the transportation of Russian (and Kazakh) oil across Europe.

History

On 18 December 1959, the 10th session of the Council for Mutual Economic Assistance (Comecon), held in Prague, adopted a decision and an agreement was signed on construction of a trunk crude oil pipeline from the USSR into Poland, Czechoslovakia, GDR and Hungary.[2] Each country was to supply all necessary construction materials, machinery and equipment. In 1962, first oil reached to Czechoslovakia, in September 1963 to Hungary, in November 1963 to Poland, and in December 1963 to GDR. The whole of the pipeline was put into operation in October 1964. The first oil pumped through the Druzhba pipeline originated from the oil fields in Tatarstan and Samara (Kuybyshev) Oblast. In 1970s the Druzhba pipeline system was further prolonged at the expense of parallel lines.[3]

Route

The pipeline begins from Almetyevsk in Tatarstan, southeastern Russia, where it collects oil from western Siberia, the Urals, and the Caspian Sea. It runs to Mozyr in southern Belarus, where it splits into a northern and southern branch. The northern branch crosses the remainder of Belarus across Poland to Schwedt in Germany.[2] It supplies refineries in Płock and in Schwedt. The northern branch is also connected by the Płock-Gdansk pipeline with the Naftoport terminal in Gdansk, which is used for oil re-exports.[4] In Schwedt the Druzhba pipeline is connected with the MVL pipeline to Rostock and Spergau.

The southern branch runs south through Ukraine. In Brody the Druzhba pipeline is connected with the Odessa-Brody pipeline, which is currently used to ship oil from the Druzhba pipeline to the Black Sea. In Uzhgorod the pipeline splits into lines to Slovakia (Druzhba-1 - original Druzhba route) and to Hungary (Druzhba-2). The line through Slovakia is divided once again near Bratislava: one branch leading in a northwest to Czech Republic and the other going southward to Hungary. The Druzhba-1 pipeline branches off toward Hungary at Ipeľ, crosses the Hungarian border at Dregelypalank and leads to Százhalombatta.[2] In Hungary, the Druzhba-1 pipeline supplies Duna refinery while Druzhba-2 supplies Duna and Tisza refineries.[5]

The Mažeikių refinery in Lithuania and Ventspils oil terminal in Latvia are connected to the main pipeline by the branch pipeline from Unecha junction in Bryansk Oblast. This branch has ceased operation in 2006 and is not likely to become operational in any time soon.

The part of Druzhba pipeline system, which runs via Belarus, is 2,910 kilometres (1,810 mi) long. The length of the pipeline in Ukraine is 1,490 kilometres (930 mi), in Poland in 670 kilometres (420 mi), in Hungary 130 kilometres (80 mi), in Lithuania 332 kilometres (206 mi), in Latvia 420 kilometres (261 mi), and in Slovakia and in the Czech Republic together around 400 kilometres (250 mi).[2][6]

Technical features

The Druzhba pipeline currently has a capacity of 1.2 to 1.4 million barrels per day. Work is currently underway to increase this in the section between Belarus and Poland. The pipe diameter of the pipeline varies from 420 millimetres (17 in) to 1,020 millimetres (40 in).[3] It uses 20 pumping stations.

Operators

The Russian part of the pipeline is operated by the oil company Transneft through its subsidiary OAO MN Druzhba. In Belarus the operator is Gomeltransneft Druzhba, in Ukraina UkrTransNafta, in Poland PERN company, in Slovakia Transpetrol, in the Czech Republic Mero and in Hungary MOL.[7]

Proposed extensions

[edit] Schwechat (Austria)–Bratislava Oil Pipeline

Schwechat–Bratislava two-way oil pipeline project was proposed in 2003. It would allow to supply the OMV owned Schwechat Refinery from the Druzhba pipeline.[7]

Fico & labour standards

Robert Fico seems to continue his moderate reign. He is pushing through some measures that amend the labour code so that it is not heavily skewed to favour employers. His labour minister said that this simply puts slovakia on the same level of labour regulation as capitalist darlings like UK or Ireland. Quite how giving slovaks mainstream standards in the workplace is being dangerously left wing is not explained.

I think that people who think that maternity leave is a threat to capitalism makes me wonder if some employers have any humanity left. Moderate social standards and capital can coexist and produce balanced & democratic societies like those found in Scandinavia and elsewhere where the fruit of capitalism is used to underpin enlightened societies and not go down the path of unstable militaristic taliban-esque regimes like the one plagueing the United States at the moment. The social ills that the US has accepted in order to gain a couple of percentage points of growth are an unacceptable trade-off. Only psychopaths can truly want societies that don't care about the fate of the individual i.e. without safety nets.

The richest irony of all is that in this century of the Self the checks and balances on capital that are being undermined everywhere, are the basic foundation upon which the social contract that allowed the prosperity of the past 70 or so years (i.e. after the war).

I also have a deep suspicion that most people who call for privatisation of healthcare or short-term contracts as the way of the future either are rich enough to not need the societal safety nets (and are therefore in a small atypical minority) or they are deluded fools who think they are the next Gordon Gekko... We are not all going to be rich.. Its impossible. Many will waste their life chasing these illusions and in the process they are creating a selfish cruel & consumeristic world to live in.

State vs. Private sector

An old interview with a great economist. What he says has been common sense since the 1930es until the mid 90es. Its strange how this view would be seen as leftist these days... Especially if the same words were uttered by a politician anywhere in europe including Slovakia but particularly in the english speaking countries.

Government and the Market:
INTERVIEWER: Who knows best? government or the free-market system?

JOHN KENNETH GALBRAITH: I have no doubt on that. The correct balance is pragmatic. If the market system, as you call it, has its own things that it does very well, no one could question, for example, its ability to make automobiles or grow food or provide a large part of the substance of life. But then there's an area where it doesn't work, and the distinction between
the areas where it works and the areas where it doesn't work is the basis of sound policy.

We're not, as we talk, in the United States having a big, sometimes quite mindless, argument about education. Everybody agrees that education is a public service, or almost everybody, and has to be handled, financed by the state, by the government. On the other hand, there's nobody, so far as I'm aware, suggesting that the state should take over the manufacture of automobiles, which I just mentioned, or farm products, or a wide range of other things. So it's a practical judgment that has to be made in the specific case, and it doesn't lend itself to the kind of broad theory implied in your question.

INTERVIEWER: At the end of the day, is morality at the heart of economics?
JOHN KENNETH GALBRAITH: No, but it can be. We're talking today in a very rich country, at a very rich time, and at the time we talk a large part of the American population, 10, 15 percent, are living below the level of enjoyment. They're hungry, they're ill housed, they are sick, and very largely as the result of the lack of income, mostly as the result of the lack of income. I would like to see a minimum income for everybody so that you have a life-supporting safety net. I think it's something a rich country like the United States can afford. And I'm not the only one with that view. Conservatives will say that people endowed [that way] won't work. Well, that's quite possible, but I'm impressed with the fact that leisure, if you're rich enough, is also a very good thing. In the past, often I've walked through Harvard Yard and have had one of my colleagues say to me, "Ken, aren't you working too hard?" Excessive work, leisure can be very good for a college professor, or somebody of affluence. Work can be unnecessary.


Lets stay on dispassionate economics

If you read some of the anglosaxon press these days, you would think that Stalin was elected in Poland, and the economy and society is in freefall. As we know, nothing could be further from the truth but for the sake of any westerners that would like to read more in depth stuff than press releases from propagandameisters (money doesn't do politics) here is some Austrian research:

First the table for those not so keen on too much text

Positive outlook:
• Bulgaria, with broadly based favourable impact from EU accession
• Romania, with focus on disinflation and EU accession
• Slovakia, with concerns on the impact of the fiscal easing
• Slovenia, positive on sustained high growth and adoption of the euro

Stable outlook:
• Czech Republic, with concerns related to the fiscal side
• Estonia, rapid growth, but adoption of euro may be postponed yet again
• Latvia, growing overheating pressures coupled with rising economic
imbalances
• Lithuania, strong growth, improved political situation
• Poland, on strong fundamentals, with political environment still generating
concerns

• Ukraine, economy stronger again, but gas price hikes loom and politics remain
complicated

Negative outlook:
• Hungary, on toughness of the fiscal consolidation programme and political
unrest, potentially undermining reform commitment


"CEE region
General framework and growth prospects

The general outlook for the region is po-
sitive for strong economic growth, in
spite of increasing vulnerabilities. Dyna-
mic domestic demand, with lively in-
vestment, is accompanied by encoura-
ging exports in the wake of strengthe-
ned European demand and generally
good competitiveness. We forecast ave-
rage regional growth of 6 % in 2006 and
5.4 % in 2007, with all countries show-
ing growth close to or above 4 %.
Hungary, which is now facing the short-
term costs of a long-awaited fiscal cor-
rection, represents the only exception.
Still, the political scene is emanating
rather mixed signals, while the repeated
phenomenon of risk re-pricing recorded
in the last few months shows that the
region, and a few countries in particular,
remain vulnerable to the sentiment on
international markets. "

other juicy bits

"...Poland prospects unclear and keeping the zloty
rather volatile. Strong investments and
exports are the main drivers of growth
Slovakia and in the Czech Republic as
well, while Slovenia, which has secure
EMU entry in 2007, is waiting for the
promised boost in terms of competitive
ness and FDI appeal. Buoyant growth,
accompanied by increasing risks for an
overheating of the economy, is con-
firmed in the three Baltic countries. In
all three states domestic demand conti
ues to play a strong role in explaining t
higher growth, with limited room for a
significant correction in the external b
ance so far. The short-term outlook is
negative only in Hungary, where growt
will obviously decline (consumption
growth will be negative in 2007), in the
wake of the recessionary impact of the
new (long-awaited) fiscal correction pl
and the new monetary policy condition
The political environment is adding
further concerns, with the centre-left
coalition at the heart of a scandal
having lost local elections and the oppo
sition repeatedly calling for early elec-
tions."

Interest rates and macroeconomics

"Hikes in rates are also expected in the Czech Re-
public and Slovakia; in both countries the
new political landscape, which is opening
the door to increasing populism, is gener-
ating concerns for the fiscal stance. In the
Czech Republic, a deteriorating fiscal po-
sition, combined with increasing infla-
tionary pressures and the negligible ap-
preciation of the Czech koruna prompted a
25bp rise at the end of September 2006,
to be followed by a further + 50 bp in
2007. The lingering political deadlock,
which threatens fiscal discipline, remains
the main issue to watch.

In Slovakia, with
inflation remaining the key obstacle to-
wards adopting the euro, the central bank
has already hiked rates by 175 bp since
the beginning of the year. We see poten-
tial scope for an additional 25 bp hike in
2006, most probably taking place in No-
vember or December. However, given the
current deceleration in oil prices and
lower than expected regulated price in-
creases, our forecast for 2007, which as-
sumed a further 50 bp rate hike in Q1, re-
mains conditional on the persistence of
strong growth in private consumption.
Concerns are related to the fiscal side, yet
we still believe the budget deficit criteri-
on can be achieved if appropriate correc-
tive measures are put in place.

A completely new macroeconomic policy
framework is now in place in Hungary.
Following the general elections, the re-
elected government has finally addressed
the messy fiscal position of the country,
and a new corrective programme has been
adopted, which has also been endorsed
by the EU Commission. With the plan al-
ready having an impact on inflation and
with international markets having largely
re-priced Hungarian risks, in view of the
fiscal stance and political distress, the
central bank has started hiking rates. The
prime rate of 6.25 % in June increased to
7.75 % by the end of September. We ex-
pect the tight monetary policy stance to
be continued in the future, as inflation
will stay high both due to the direct im-
pact of the fiscal corrective measures and
to some stickiness in prices thereafter. In
Slovenia, strong domestic demand, high
energy prices and the adoption of the eu-
ro are factors which suggest that inflation
may move upwards slightly. The central
bank has already responded by raising in-
terest rates by 25 basis points in August –
also with a view to maintaining the inter-
est rate differential to the ECB. The fiscal
policy remains cautious, calling for fur-
ther declines in the deficit. Inflation con-
vergence has been and continues to be
the main crucial issue for the three Baltic states"

Its nice to see that Slovakia shares the same "problem" as the baltic tigers
i.e. too fast growth prompting inflation to go up, lower prices in oil will help alot though...
The euro looks a certainty if Fico just keeps thing largely as they are...

Slovakia in detail
"Buoyant economic prospects sustained
mainly by domestic demand and recov-
ery in net exports. Despite the new gov-
ernment decision to increase the public
finance deficit, the Maastricht criteria
could still be met. Energy prices repre-
sent the riskiest factor for inflation de-
velopments, while the restrictive mone-
tary policy should partially contribute to
slowing down pressures on the demand

side. 2007 key interest rate hikes re-
main conditional on the persistence of
strong growth of private consumption,
wages and employment in H2 2006.
employment in H2 2006. Despite the
risks connected to inflation develop-
ments and relaxed fiscal stance, we still
reckon there is scope to meet all maas-
tricht criteria in time for euro adoption
as of 1.1.2009.

Forecasts for 2007
Economic growth is expected to peak in
2007, due to new production capacities
on the supply side (connected mainly to
automotive). On the demand side, net ex-
ports are expected (driven by increase
of export-oriented capacities) to be the
main driver, followed by private con-
sumption and investment.

Construction activity is still benefiting
from the investment boom, recording
15.4 % average yearly growth in the first
7 months of the year. Such growth is
mainly driven by new construction (both
in infrastructure and building construc-
tion). We expect a gradual slow-down of
the annual growth due to the higher base
last year as well as to the gradual decline
of investment activity. Despite this, con-
struction activity should still record dou-
ble-digit yearly growth.
Based on the labour force survey the un-
employment rate reached 9.85 % in August
– the lowest rate ever – recording a 1.03 %
annual decline. Seasonally adjusted unem-
ployment (UniBanka calculation) reached
10.30 % (1.07 % yoy decline). The unem-
ployment decline is still driven by new
jobs, reflecting strong economic growth.
However, long-term unemployment re-
mains the key problem – it is the highest
among EU countries, while unemployment
adjusted for the long-term unemployed
(over 2 years) is already lower than the

EU-15 level. Altogether, we see only limit-
ed scope for further decreases in the un-
employment rate (despite the expected
strong economic growth). Following this
year’s forecast of 10.7 %, we forecast a
10.5% (yearly average) figure in 2008.
Income and wages
The average monthly wage reached SKK
18,324 (EUR 486) in Q2, recording 8.8 %
yoy growth. Real wage growth accelerat-
ed to 4.0 % in Q2, versus 2.7 % in Q1 (de-
spite the registered hike in inflation).
Public administration, education and
trade were the drivers behind such wage
growth. On the other side, construction,
the energy sector and agriculture record-
ed the lowest yearly growth. We expect
2006 real wage growth to be 3.2 % yoy.

Monetary policy
The central bank increased key interest
rates by 75 bps in Q3 (first by 50 bps in
July and then an additional 25 bps in Sep-
tember). Together with the other hikes in
H1, the 2-week repo rate went up by an
overall 175 bps. The reasons for such
tightening of monetary conditions remain
the same as in H1 – inflation risks. The
central bank specifically mentioned ex-
pected regulated price hikes as well as
the still relatively high private consump-
tion (driven by employment and wage
growth and increasing household indebt-
edness) as main factors. "