The COVID-19 virus to slow down Slovak economy

Firms are cancelling meetings and business trips, disinfecting their premises and sending their employees to work from home.

Illustrative stock photoIllustrative stock photo (Source: SME)

A lack of clarity and unpredictability characterise the situation in the business sector facing the impact of the COVID-19 virus in Slovakia. The virus poses a number of risks - not all of them immediate. In the meantime companies in Slovakia are adopting measures to protect their employees from contracting the COVID-19 virus. Nevertheless, instead of sick employees, companies are endangered by slowed down supplies from abroad as well as decreasing orders. The overall impact the COVID-19 virus will have on the Slovak economy is still unknown. But analysts agree that the economic growth would be lower than that originally expected of around 2 percent.

“The situation is still very unclear,” said Tibor Lörinz, analyst with Tatra Banka, as cited by the SITA newswire. He added that the worst scenarios envision the crisis situation lasting as long as one year or even a year-and-a-half. “It is almost certain that it has negatively affected the global as well as Slovak economy, but we don’t know how much yet.”

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Michal Lehuta, analyst with VÚB bank, sees two negative shocks that may hit the small and extremely open Slovak economy. The first one will be caused by the drop in orders from abroad while foreign trade might show signs of weakening already in March. The second shock will be caused by a cancellation of events, closure of schools and quarantine measures.

“Logically, the most affected sectors will be transport, culture and tourism, but also sales of durable goods, like cars,” Lehuta told SITA. “This is why the Slovak economy may be affected more than others.”

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