A big comparison between Slovakia and the Czech Republic: Scissors have opened up the most in the last 20 years, an expert warns
Over the past 30 years, the Slovak economy has progressed and approached the EU in wealth. In terms of gross domestic product (GDP) in purchasing power parity in the 1990s, Slovakia was roughly half the wealth of the EU group of countries, now it is around 70 percent.
Although Slovakia managed greater economic progress than the Czech Republic during independence, it still lags behind its western neighbors, analysts recalled on the occasion of the 30th anniversary of the creation of the Slovak Republic.
A quarter stronger economy
“According to the latest data from Eurostat, last year the performance of the Czech economy per capita in purchasing power parity reached a total of 92 percent of the average of EU countries. In Slovakia, it was only 69 percent. From the point of view of this indicator, last year the gap between the economic performance of the Czech Republic and Slovakia was as wide as in 2001,” Trinity Bank Chief Economist Lukáš Kovanda explained.
In absolute terms, almost 20,000 euros per capita is produced in our country, while in the Czech Republic it is about 25,000 euros, the productivity of the Czech economy is thus about a quarter higher, calculated the analyst of the Slovak Savings Bank, Matej Horňák.
The structure of the economies is still very similar, both countries create a large part of the added value in industry (25-28 percent). it mainly consists of services, and other contributions come from other sectors, such as public administration or agriculture.
Automobile companies as a problem of the future
In recent years, however, there have been numerous structural challenges that the Slovak economy continues to face. According to Horňák, we are hindered by the low share of research and development expenditures in GDP, which is among the lowest among all EU countries.
The long-term development shows a gradual decline in the quality of education, but also a weaker performance at the university level, where Slovak universities rank significantly worse than universities in the Czech Republic in international rankings.
According to Kovand, dependence on automobile production can be a potential fulfillment of economies. Slovakia is the world leader in the number of manufactured vehicles per inhabitant, and the Czech Republic is in second place.
“In Slovakia, which has 5.5 million inhabitants, more cars will be produced than, for example, in Italy or Britain, which have 60 or almost 70 million inhabitants,” the analyst recalled. Automobiles and parts make up approximately 20 percent of exports in the Czech Republic and even 30 percent in Slovakia. “It is strong in both countries and represents a significant risk for the next few years,” added Kovanda.
We have improved our quality of life
According to Horňák, not only the quantitative aspect (e.g. GDP growth) but also its translation into the living conditions of the population is important for evaluating Slovakia’s progress. Partial indicators, as well as more comprehensive indices, show that the quality of life in Slovakia has increased significantly over the past 30 years.
The Human Development Index, tracking four dimensions of economic development – average life expectancy at birth, average number of years of schooling, expected number of years of education and gross national income per capita – shows a significant shift in the standard of living.
The index in Slovakia rose from the level of 0.69 in 1990 to 0.85 in 2021, making the country one of the most developed. In 2021, the Czech Republic reached a value of 0.89 compared to 0.74 in 1990.
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