According to an analysis by the Institute of Informatics and Statistics in Bratislava, the growth rate of the Slovak economy reached its peak in 1995, with an increase in real gross national product (GDP) of 6,9%.
In 1998, the Slovak economy's growth slowed more sharply than in 1996 and 1997, reaching a relative GDP growth rate of 4,4%, the lowest since the end of the recession in 1993. This was due, on the one hand, to slower growth in aggregate demand, resulting from more moderate growth in both domestic and external demand, and on the other hand, to reduced growth in the total volume of imports. In 1999, GDP growth continued to decline due to the lower rate of domestic demand. In 2000, the situation improved somewhat after stabilization measures were implemented. This improvement was largely due to increased domestic production, a rising export rate, and revenue from the privatization of Slovak Telecoms.
Consumer price growth continued into early 1998, culminating in May 1998 with an annual increase of 7,6%. In 1998, the average annual inflation rate reached 6,7%, 0,6 percentage points higher than the 1997 figure. As a consequence of the increase in regulated prices, financial pressures reappeared in 1999. The situation began to improve in 2000 due to the repeated increases in regulated prices.
The unemployment rate in 1999 and 2000 was about 20%.
Only a small portion of the economic growth achieved in the Slovak economy after 1993 translated into increased labor demand and new jobs. Macroeconomically speaking, this can be explained by the high growth in labor productivity, expressed as GDP per employee at constant prices. Based on these figures, it is also possible to establish that while the total increase in real GDP between 1994 and 1998 was 32,9%, the overall employment rate in 1998 barely exceeded that of 1993 by one percent. The logical conclusion is that GDP growth was primarily driven by the increase in labor productivity, which reached 31,6% during this period.
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