Not impressed. Bratislava public transit workers listen to company official explain job cuts.
photo: Vladimír Hák-Profit
"This rate is the highest in our history," said Martin Barto, a senior analyst with ING Barings investment bank. "Nobody has experience of such high figures, and the National Labour Office expects the rate to climb in the first quarter of this year. This could lead to problems in some regions connected with the price increases."
The absolute number of unemployed people increased by 24,000 in December to 427,125. The official unemployment rate, calculated by the National Labor Office from the number of unemployed available for work, was reckoned at 15.6%, an increase of 3.1% year-on-year. Július Homola revealed the statistics at a news conference on January 11.
Barto explained that the unemployment hike was largely due to the new cabinet's decision to abandon many of the massive highway infrastructure projects started by the previous government of ex-Prime Minister Vladimír Mečiar.
"Construction output was down almost 24% in November, while public sector investment [in construction] was down 50% year-on-year," Barto said. "It was a real slump, and this [unemployment rate increase] is the consequence."
Homola said that labour offices in all of Slovakia's eight regions and 79 districts, excluding Bratislava's third district, registered unemployment growth.
The region with the highest unemployment rate is the Prešov region (23%), followed by the Košice region (21.7%), the Banská Bystrica region (20.5%), the Nitra (18.4%), Žilina (14.8%), Trnava (11.5%), Trenčín (11.5%) and Bratislava regions (5.5%).
Of the country's districts, Rimavská Sobota continues to report the highest jobless rate (34.92%). The districts of Veľký Krtíš, Vranov nad Topľou and Revúca also topped 30%.
"The development of unemployment last year was influenced by... a lack of finances for an active labor market policy," said Homola.
The National Labour Office expects its 15.6% figure to increase in the first quarter of 1999. According to Barto, "we should be ready for 16 to 17%, due to seasonal effects, as well as to the fact that some companies like [engineering firm] ZŤS Martin are having problems and may lay off workers."
Barto added that the rise in unemployment would not have a marked impact on direct foreign investment in 1999. "It's difficult to assess," he said, "because while labour could be very cheap, 17% unemployment is not a stable economic or social situation, so the positive effects on investment could be negated by the negative aspects."
18. Jan 1999 at 0:00 | Tom Nicholson