We are still lagging behind the Czech Republic. However, we are better at one thing
On the last day of December in 1992, our small country in the heart of Europe did not yet exist, but the next day Slovaks woke up in their own state. This was mainly helped by the nationality problems in the former Czecho-Slovakia. After almost 70 years of the common state of the Czechs and Slovaks, the paths of the brotherly nations diverged. Today, together with our western neighbors, we are commemorating 30 years since the creation of Slovakia and the Czech Republic.
Both countries started to shape their own economy. After 30 years of their operation, it can be said that Slovakia lags far behind the Czech Republic. This is despite the fact that both countries have made considerable progress over the past three decades. In terms of wealth, Slovakia managed to approach the average of the European Union.
As published by the TASR agency, in the comparison 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 approximately 70%.
Slovakia has made more progress
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.
“According to the latest Eurostat data, last year the performance of the Czech economy per capita in purchasing power parity reached 92% of the EU average. In Slovakia it was only 69%. From the point of view of this indicator, last year the gap between the economic performance of the Czech Republic and Slovakia widened to the extent necessary since 2001,” explained Trinity Bank Chief Economist Lukáš Kovanda.
In absolute terms, almost 20,000 euros per capita are 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%). it mainly consists of services, and other contributions come from other sectors, such as public administration or agriculture.
Challenges and problems
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. It is one of the few indicators in which we have surpassed our neighbors.
“In Slovakia, which has 5.5 million inhabitants, more cars are produced than, for example, in Italy or Britain, which have 60 and nearly 70 million inhabitants,” the analyst recalled. Automobiles and parts make up approximately 20% of exports in the Czech Republic and even 30% in Slovakia.
“It is strong in both countries and represents a significant risk for the next few years,” added Kovanda.
Evaluation of Slovakia’s shift
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 the Slovak Republic rose from 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.
Source: TASR