History background of Slovak Republic

Slovakia is the abbreviation of Slovak Republic. It is a landlocked country of Central Europe which bordered by the Czech Republic in the northwest, Poland in the north, Ukraine in the east, Hungary in the south, Austria in the southwest, and the eastern part of Czechoslovakia. On January 1, 1993, it separated peacefully from the Czech Republic and became an independent sovereign state.

The first time that Slovakia has been called the name of this region is in the 15th century. This title was often used in the 16th century, and the Slavs settled here in the 5th century.

Since the 9th century they called themselves Slavs, so the name may have been used before the 15th century. In addition, Slovakia is one of the countries with the largest number of castles in the world. It has many historical and cultural attractions and rich tourism resources. From the remains of ancient castles to well-preserved museum collections.

Economic background of Slovak Republic

Slovakia is a developed capitalist country and was included in the ranks of developed countries by the World Bank in 2006.

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After joining the EU and NATO, it became a member of the Schengen Convention on December 21, 2007. There are few of criteria for Slovak Republic if want to join the eurozone.

Firstly, inflation does not exceed 1.5 percentage points of the three lowest national averages. Secondly, budget deficit does not exceed 3% of the GDP of the year. Thirdly, national debt accumulated no more than 60% of the GDP of the year. Fourthly, long-term interest rate does not exceed the average interest rate of the three countries with the most stable prices in the EU by 2 percentage points.

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Lastly, currency exchange rate of Slovak must be stable within the prescribed floating range because of the regional central bank unified currency to make various technical preparations.

In the second point, from the perspective of GDP, according to 2012 statistics, Slovakia’s GDP is 94.008 billion US dollars, and the per capita is 19,212 US dollars (43rd in the world). Since the beginning of the 2008 economic crisis, the increase in demand in foreign markets has led to a renewed growth in Slovakia exports in 2010. Production in key industrial sectors in Slovakia has also expanded. In general, 90% of Slovak exports go to countries of the Organization for Economic Cooperation and Development.

GDP (Current US$)

Definition and calculation

Definition:

GDP, short for Gross Domestic Product, is defined as the total market or we can called as monetary value of all final goods and services produced within a country in a given period.

As a broad measure of overall domestic production, it is considered as a great indicator for the country’s economic condition. It includes both private and public consumption, investment, government outlays, additions to private inventories, paid-in construction costs, and the foreign balance of trade.

Calculation:

New year Old year X 100

Old year

Table of Slovak Republic GDP (current US$) and explanationYear Billions (US$)

  • 2009 88.95
  • 2010 89.5
  • 2011 98.18
  • 2012 93.41
  • 2013 98.48
  • 2014 100.95
  • 2015 87.77
  • 2016 89.85
  • 2017 95.62
  • 2018 106.47

Explanation of Slovak Republic GDP (current US$)

From 2009 to 2011, GDP of Slovak Republic increases 9.23 billion. From 2011 to 2012, GDP of Slovak Republic decreases 4.77 billion. From 2012 to 2014, GDP of Slovak Republic increases 7.54 billion. From 2014 to 2015, GDP of Slovak Republic decreases 13.18 billion. From 2015 to 2018, GDP of Slovak Republic increases 18.7 billion. Line graph of Slovak Republic GDP (current US$) and explanation

Explanation of Slovak Republic GDP (current US$)

From 2009 to 2011, GDP of Slovak Republic increases 10.38 %. From 2011 to 2012, GDP of Slovak Republic decreases 5% .From 2012 to 2014, GDP of Slovak Republic increases 8%.From 2014 to 2015, GDP of Slovak Republic decreases 13%.From 2015 to 2018, GDP of Slovak Republic increases 21%.

Reason increases / decreases in GDP and explanationGDP of Slovak Republic increases in 2009 to 2011

From 2009 to 2011, GDP of Slovak Republic increases because of its change of the government policies .The country adopted the euro with the idea of using a single currency to end currency instability. The higher the value of net exports, the higher a nation’s GDP. As discussed earlier, net exports have an inverse correlation with the strength of the domestic currency

GDP of Slovak Republic decreases in 2011 to 2012

From 2011 to 2012, GDP of Slovak Republic decreases caused by Eurozone crisis. The European zone crisis was the time when European countries faced downfall of financial institutions, rapidly rising in government debt, and high bond yield spreads in government securities.

GDP of Slovak Republic increases in 2012 to 2014

From 2012 to 2014, GDP of Slovak Republic increases because in 2012 the government reintroduced a progressive income tax and increased the corporate-income tax. The purpose was to avoid tax evasion and upgrade the collection of the tax.

GDP of Slovak Republic decreases in 2014 to 2015

From 2014 to 2015, GDP of Slovak Republic decreases because being pulled by domestic demand. The country represents a platform of re-exportation for the European automotive industry and exports continued weakening from the in the automotive sector.

GDP of Slovak Republic increases in 2015 to 2018

From 2015 to 2018, GDP of Slovak Republic increases because Gross domestic product development grabbed from 2.4 percent a year ago to more than 3 percent by mid-2015, the quickest from among all eurozone part nations. Development is bolstered by recuperating lodging market.

Private firms speculations in the interim are probably going to keep on progressively recuperate, for instance in the assembling division, which is announcing rising limit use. Car segment overloaded by vulnerability over VW .There are possibly immense positive ramifications coming from the expected appearance of Land Rover Jaguar in Slovakia.

On the off chance that this speculation, possibly the biggest over the previous decade, progresses toward becoming reality, one would expect private venture one year from now and car creation later on to get a critical lift. Utilizations should profit by consistent improvement in the work market and buyer certainty.

Inflation, consumer prices (annual %)

Definition

Inflation refers to the phenomenon that the amount of money in circulation in the market over a period of time far exceed than needed for commodity circulation, resulting in a general increase in the price level and the depreciation of currency.

Calculation

Table of Slovak Republic Inflation, consumer prices (annual %) and explanationYear Inflation, consumer prices (%) from 2009-2018

  • 2009 1.62
  • 2010 0.96
  • 2011 3.92
  • 2012 3.61
  • 2013 1.4
  • 2014 -0.08
  • 2015 -0.33
  • 2016 -0.52
  • 2017 1.31
  • 2018 2.51

Explanation of Slovak Republic Inflation, consumer prices (annual %)

From 2009 until 2010, inflation, consumer prices decrease 0.66%. From 2010 until 2011, inflation, consumer prices increase 2.96%. From 2011 until 2016, inflation, consumer prices decrease 4.44%. From 2016 until 2018, inflation, consumer prices increase 1.2%.

Line graph of Slovak Republic Inflation, consumer prices (annual %) and explanation

Explanation of Slovak Republic Inflation, consumer prices (annual %)

From 2009 until 2010, inflation, consumer prices decrease 40.74%. From 2010 until 2011, inflation, consumer prices increase 308.33%. From 2011 until 2016, inflation, consumer prices decrease 113.27%. From 2016 until 2018, inflation, consumer prices increase 91.60%

Reason increase/decrease in Inflation and explanation Year 2009 to 2010 inflation decreases

Since Slovak adopts the Eurozone at 2009, and implemented tighten fiscal policy urging by Euro. Usage and exchange rate of two currencies, Slovak koruna and the euro, caused fallen in the money supply. Besides that, tighter fiscal policy will be increased interest rates, so that Slovak citizens prefers to spend their money immediately and it caused fallen in money supply. Hence, when money supply was fallen, then the growth of aggregate demand at Slovak market also will be reduced, and finally triggered the decline in the prices of goods and services.

Year 2010 to 2011 inflation increases

From 2010 until 2011, increases in prices at Slovak had been caused primarily by increasing prices on global markets, especially oil and food prices. Consumer price of Slovak increased when consumer price of global marketing increases too.

When price index of goods or stocks of Slovak rises, means that purchasing power of Slovak citizens would be decrease. By this, it will lead oversupply at money supply of market compared with money demand of market. Hence, decreased of inflation would happen.

Year 2011 to 2016 inflation decreases

The main reason of decreases inflation at 2016 is regulation prices of energy. Oil prices is the majority complement which had the strongest effect on the development of inflation at Slovak. Since energy prices such as fuel, oil and gas decreases, it directly affected the prices of goods made with petroleum products, or industrial which high spending with petrol, especially transportation, manufacturing and heating.

Hence, producers will be able to lower their prices on good to motivate people to buy their good when production cost decreases. Therefore, decrease of inflation was significant and accompanied with oscillate below zero and slightly increases between 2011 until 2016.

Year 2016 to 2018 inflation increases

Fast growth economic and high development at motor manufacture caused inflation rate of Slovak increased 3.03% during 2016 until 2018. Since Kia motors Slovak developed advance technology, means producers need more resources to operate business.

Therefore, there had lower unemployment rate, and higher average salaries. So, purchasing power of Slovak citizen will be increase, and caused rises in demand for products. As a result of increased demand, producers will raise prices of goods, to get more profit, also bear in order to balance demand and supply. Hence, inflation had increased.

Unemployment, total {%of total labor force}

Definition

The unemployment define by English is Unemployment occurs when people are without work and actively seeking work. Unemployment rate refers to the percentage of people who do not work as a percentage of the total work. In addition to (children adults and non-workers), The unemployment rate figure is seen as an indicator of the overall economic situation.

Calculation

Unemployment rate%=number of unemployed/ (number of employees + number of unemployed) %

Table of Slovak Republic unemployment rate(%) and explanationYear Unemployment Rate (%)

  • 2009 – 2018
  • 2009 12.0
  • 2010 14.38
  • 2011 13.62
  • 2012 13.96
  • 2013 14.22
  • 2014 13.18
  • 2015 11.48
  • 2016 9.67
  • 2017 8.13
  • 2018 6.76

Explanation of Slovak Republic unemployment rate(%)

From 2009 to 2010, the unemployment rate increase by 2.38%. From 2010 to 2011, the unemployment rate decrease by 0.76%. From 2011 to 2013, the unemployment rate increase by 0.6%. From 2013 to 2018, the unemployment rate decrease by 7.46%.

Line graph of Slovak Republic unemployment rate(%) and explanationExplanation of Slovak Republic unemployment rate(%)

The unemployment rate for Slovak Republic increase by 19.8% from the year 2009 to 2010 and from the year 2010 to 2011 the unemployment rate decrease by 5.29%. From the year 2011 to 2013 Slovak unemployment rate increase by 4.4% and from the year 2013 to 2018 Slovak’s unemployment rate decrease by 52.46%.

Reasons increase or decrease in unemployment rate and explanation

Year 2009 to 2010 unemployment increase

First, because of Slovakia under the influence of the 2008 financial crisis, large number people who working abroad were unemployed. They returned to Slovak.

Secondly, since 2008, the Slovakia government by Prime Minister R. Fico and Dominated by his social democratic party SMER, beginning to address the impact of the economic crisis. But not all policies are accepted and implemented. Most of the policies exist only in the law and have not been implemented until February 2009.

Third, Slovakia officially became the euro area country in 2009. The floating local currencies of neighboring countries, their depreciation and the stable Euro in Slovakia had altogether contradictory effects. This has had a big impact on Slovakia’s business. Many people are unemployed, especially in the retail and service industries.

Year 2010 to 2011 the unemployment rate decrease

The unemployment for Slovakia decreases as employers in Slovakia seeks expert and experienced manager which resulted in more job opportunities for the people of Slovakia to work in their own country which will increase their country economy.

Year 2011 to 2013 Slovak unemployment rate increase

Affected by the European debt crisis, the situation of fiscal deficits in EU countries Slovakia’s European debt crisis is transmitted to the political arena. Due to differences within the ruling coalition, the Slovak Parliament failed to pass the EFSF expansion proposal, and the ruling coalition government led by Prime Minister Radicova was forced to step down. This is the first country to have a political downfall due to the European debt crisis. It also shows that the crisis has spread from the economic sphere to the political sphere.

Year 2013 to 2018 Slovak’s unemployment rate decrease

The Slovak government plans to improve the labor market environment and increase the employment rate by reducing the health expenditures of low-income workers, improving the welfare of working employees, and focusing on the youth unemployed.

Export-led expansion has been driven by continuing inward investment in the car industry, strong integration into global value chains and resulting improvements in labor productivity.

Conclusion

In Conclusion, For the GDP issue, the highest GDP year is in 2018, the lowest year is in 2015.The main factors affecting Slovakia’s GDP are automobile import and export, the impact of the entire Eurozone, taxation, national economy, and national demand.

Although there are some fluctuations in these years, the overall situation is more optimistic, especially near 3- In the past four years, a large number of imports and exports have caused GDP to rise. Inflation, mainly consisting of oil, food, stocks, and automobile manufacturing. The year with the highest inflation rate is 2011, the highest is 2016.

The price of gasoline is the biggest factor causing the decline in inflation. The highest unemployment rate was in 2010, and then continued to fall, reaching its lowest point by 2018. In the 2008 financial crisis, a large number of people working in Europe returned to their hometowns.

Then in 2009, Slovakia was affected by the Eurozone, and the unemployment rate rose, especially in retail, and the service industry was seriously laid off. In recent years, many large companies can hire highly educated or experienced people. Although the number of unemployed people with low education increases, the unemployment rate shows an annual downward trend.

In general, the economic situation of this country is better than we think. From a simple point of view, many developing countries will now immigrate to Slovakia to get a better life. Therefore, we believe that the economic level of this country is still very good. Although it has experienced some twists and turns, it has developed rapidly in recent years and various economic indicators are good.

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 History background of Slovak Republic. (2019, Dec 20). Retrieved from http://studymoose.com/assignment-final-version-example-essay

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