Main macroeconomic development trends

The beginning of the economic transformation in Slovakia relates to the former Czechoslovak Federation (CSFR), where after the political breakdown in 1989, transformation developed under 'shock therapy' within the framework of the Economic Reform Scenario after 1991. As of 1 January 1993, the Federation was dissolved and the two successor States were established, one of them being the Slovak Republic. Despite some populist rhetoric, the macroeconomic policy of the Slovak Government continued in the direction of the stabilisation programme of the former Czechoslovak Government.

During the four years of national independence so far, economic development in Slovakia has changed its growth dynamics from the transformation recession of 1993 towards revival, followed by high rates of economic growth during 1994-1996. Stabilisation of the macroeconomic environment progressed rapidly as inflation decreased continuously and the external stability of the Slovak currency has been reinforced by growing foreign exchange reserves of the central bank, the National Bank of Slovakia (NBS). Some disturbing features in macroeconomic stability emerged since the last quarter of 1995 in the external sector, due to changes in import-export dynamics development resulting from domestic economic growth and decrease of demand abroad. An overview of the development of the main macroeconomic indicators is given in Table 1.