If the current exchange rates between Slovakia and the three other members of the Visegrad Four (Czech Republic, Hungary, and Poland) remain as they are, Slovakia’s workforce will become dramatically more expensive, warned UniCredit Bank’s chief analyst Ján Tóth on February 16, as reported by the TASR newswire.
“From the position of being the country with the lowest labour cost, Slovakia is becoming the second-most expensive one in the region, with estimated labour costs in industry of €7.40 per hour,” said Tóth. This is 13 percent higher than the V4 average according to Tóth.
The Czech Republic is still the most expensive country in the V4 with labour costs of €7.60 per hour. According to Tóth, Poland is now becoming the cheapest country in terms of labour costs, at 20 percent lower than the V4 average. Labour costs in Slovakia and the Czech Republic are currently one-quarter of the average in the EU15, while those of Hungary and Poland stand at only 20 percent.
“The adoption of the euro, paradoxically, complicates the situation for Slovak exporters with respect to the current levels of currencies of other V4 countries. In other words, the euro has removed the flexibility of weakening the domestic currency in difficult times,” Tóth added. TASR
Compiled by Zuzana Vilikovská from press reports
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