Economic Briefs

Corporates biggest tax non-payers in 1999, says Tax Office
NBS predicts inflation rate increase for 2000
M2 money supply exceeded 1999 central bank target
1Q00 industry outlook survey optimistic
Slovakia logging industry saw 1999 wood shortage
Dzurinda says highway financing secured for 2000
German mutual fund shares now for sale on bourse

Corporates biggest tax non-payers in 1999, says Tax Office

Slovakia's collected corporate income tax for 1999 amounted to 22.2 billion Slovak crowns, representing 80.6% of the projected total of 27.3 billion crowns. In 1998, the collected total was 24.7 billion crowns. The collection success rate of corporate income tax was the lowest within the tax revenues, representatives of the Central Tax Directorate (UDR) said on January 25.
Collected income tax of private individuals increased by more than one billion crowns compared with 1998 to total 30.4 billion crowns and account for 96.1% of the plan.
Excise taxes were 25.2 billion crowns and accounted for nearly 104% of the plan. Tax revenues from international trade and transactions (import duty, import surcharge, fines and fees) amounted to 12.5 billion crowns and accounted for 237.7% of the plan, while tax revenues in 1999 were 160.43 billion crowns to reach 102.4% of the plan.

NBS predicts inflation rate increase for 2000

The National Bank of Slovakia (NBS) predicted the annual inflation rate would increase to 10.4% at the end of 2000 because of a rise in regulated prices. The central bank predicted average annual inflation at 14.1%, while the Slovak Statistics Bureau said growth in year-on-year inflation would only be 9.2% with average inflation at 13%.
On January 26, the cabinet approved an increase in regulated prices as of February 1. Electricity prices for households will go up 40% and corporate entities will see a 10% increase. Natural gas for households will be 30% more expensive, and businesses will pay 5% more for natural gas.
The price of water for households will go up 27% this month. The price of passenger rail-transport will be 30% higher and the price for personal bus transport will increase by 20%. Postal services will be 10% more expensive. Both private and corporate entities will pay higher fees for telecom services in the first of a two-phase price hike.
The total annual increase in costs per household is estimated at nearly 5,300 crowns, or 440 crowns monthly.
The first increase will take effect on April 1 and the second on July 1. Deputy Prime Minister Ivan Mikloš said that the rise in regulated prices should not significantly influence the inflation estimates anchored in the National Bank of Slovakia (NBS) monetary program for 2000, and added that the inflation rate should not exceed 10%.

M2 money supply exceeded 1999 central bank target

The M2 monetary supply, one of the most significant monetary aggregates monitored by the National Bank of Slovakia (NBS), grew by 12.3% to 523.5 billion crowns in 1999. This exceeded the target interval of 6 to 8.8% set by the NBS for 1999.
ING Barings analyst Ján Tóth said he had expected the NBS target wouldn't be met.
"The M2 grew much more significantly last year. It happened despite several statements of the NBS in the third and fourth quarter of 1999 that monetary policy would be not be eased and that interest rates would not decrease," he said.

1Q00 industry outlook survey optimistic

An economic outlook survey for the first quarter of this year shows most industrial enterprises expect an increase in production. The survey is regularly compiled by the Slovak Statistics Office and the results were released on January 27.
The highest production growth is expected in paper and pulp production, wood processing and the chemical industry. A decrease of production is expected mainly in water supply and in the production of radio and television sets, medical and optical instruments, coke and refined crude oil products, as well as in the clothing industry.

Slovakia logging industry saw 1999 wood shortage

Approximately 5.5 million cubic metres of wood were logged in Slovakia last year, and timber processing companies complained of a supply shortage for the demanded assortment. The cumulative loss of forestry management in Slovakia in 1999 was estimated at 70 to 80 million crowns, as reported on January 27.
Milan Belaček, the Agriculture Ministry's Forestry Section director, said that state aid to forestry management decreased below 10% of the 1990 volume, to 360 million crowns in 1999.
General Secretary of the Association of Wood Processing Companies (ZSD) Roman Reha claimed that the shortage of wood was linked with assortment and excessive exports.

Dzurinda says highway financing secured for 2000

Highway construction in Slovakia will be financed by loans and the State Road Fund in the year 2000, Prime Minister Mikuláš Dzurinda said during his visit to the Bratislava D61 highway construction site on January 28.
"The government managed to pay off all its old obligations towards contractors participating in highway construction, and funds for further highway construction will be secured by August or September 2000," Dzurinda said, adding that the government had secured favourable terms for the loans.

German mutual fund shares now for sale on bourse

Shares of foreign mutual funds are being sold on the Slovak capital market for the first time. Starting February 1, investors were able to buy shares of three German mutual funds administered by the investment company Veritas SG Investment Trust GmbH: Veri-Tresor, Veri-Valeur and Veri-Eurovaleur.
Veritas SG's offer was stimulated by the changed legislative environment as well as the trend on Slovak financial markets towards decreasing interest rates. The minimum deposit is set at 1,000 DEM, and investors can use the currency of their choice.

Compiled by Keith Miller from Reuters and SITA

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