NBS revises monetary targets after deficit jump
The National Bank of Slovakia revised its monetary targets for 2001 on May 25, making changes most importantly to its projected deficit for the current account of the balance of payments, which it now expects to be 54.8 billion Slovak crowns, or 5.7% of projected GDP. The original target had been 38.4 billion crowns (4% of GDP), after having been reined in to 33 billion crowns in 2000. Inflation for 2001 will fall into the 7.1% to 8.3% band, while the fiscal deficit will be 37.8 billion crowns, or 3.9% of GDP.
The change came primarily as a result of unexpectedly high trade deficit figures this year, which were a result of rising domestic demand, falling demand on Slovakia's main export markets, and technology imports by foreign investors located in Slovakia.
Preliminary data supplied by the central bank May 28 indicated that the current account of the balance of payments ended the first quarter of 2001 with a deficit of 14.9 billion crowns, soaring up from 3.1 billion crowns in the same period last year.
New industrial park in works for east Slovakia
The municipality of Kechnec, near Košice in eastern Slovakia, is preparing an industrial park near the factory site of U.S. Steel Košice, whose main tenant is to be connectors maker Molex Slovakia. The American firm Molex opened its Kechnec factory in April this year. The Kechnec park is to apply for 70% state funding on the basis of an Industrial Parks Law approved by parliament May 18.
Energy regulator expected as of August 2001
An Office for the Regulation of Transit Networks, considered vital in the run-up to the privatisation of Slovakia's energy utilities, should begin functioning as of August this year. A law supporting the office is currently in second reading in parliament.
Financial Controls Law opens door to new EU chapter
The government at its May 22 session passed a Law on Financial Controls and Internal Audits which will, for example, allow a state-empowered auditor to conduct ex ante checks on how public money is used by state organs. The law is a pre-condition to Slovakia's opening the crucial Financial Controls chapter of the EU-entry blueprint acquis communautaire; parliament is expected to debate the law in August.
The government at the same meeting approved imports of selected electro-technical goods free of customs duties in order to boost the growth of the electro-technical sector in Slovakia.
New pipeline may come through Slovakia after all
The Polish gas firm PGNiG agreed May 22 to a new pipeline project known as Jamal II that will stretch from Russia to western European markets through Belarus, Poland and Slovakia. The route, which had been preferred by the Russian Gazprom, is the most advantageous of all the possibilities considered for Slovakia.
IRB bosses recalled under cloud
Two members of the board of directors at state bank IRB, the bank's vice-president and president, were recalled by its supervisory board last week. The recall had been initiated by Deputy Finance Minister Viliam Vaškovič and Deputy Prime Minister for Economy Ivan Mikloš, who said the two had mismanaged a tender for supplying an electronic banking system to IRB. The tender was won by a firm close to
one of Slovakia's ruling coalition parties.
SE split gets go-ahead from creditors
The general director of the SE electricity utility said yesterday that SE's creditor banks had agreed to a plan to split SE into three companies ahead of its next year's planned privatisation. The utility, which has 68 billion Slovak crowns in debts, had feared that loan contracts with banks stipulating SE could not reduce its assets before paying the debts, would prevent the split.
Poor business environment, says think tank survey
A survey of Slovak business people carried out by the independent economic think tank INEKO found that corporate risk in Slovakia was significantly higher than in neighbouring countries. Slovakia received a rating of 8.3 points out of 28 possible, with the lower the score, the higher the risk.
Developed western nations scored between 21 and 28; Poland took 16, the Czech Republic 11.3, and Russia as little as 4. Most criticised in Slovakia were business ethics, corruption and the enforceability of laws and basic rights.
Entrepreneurs gave commercial law three points out of seven, the highest rating any category scored in Slovakia, followed by the regulatory framework (governing the capital market, the independence of the central bank etc.).
Compiled by Tom Nicholson from press reports.
