Investors demonstrate enthusiasm for calm market growth
Since becoming finance minister in 2012, the widely respected Peter Kažimír has stabilised the central European state, improving its finances and helping to position it as one of the region’s more strategically ambitious economies.
During his tenure, the Slovak Republic’s budget deficit has been trimmed from 4.3% of GDP in 2012 to 0.83% in 2017, according to government data, while it is projected by the IMF to post a small current account surplus in 2019.
IMF CONFIDENCE
On Kažimír’s watch, it has become one of the region’s best performing economies, projected by the IMF to grow at north of 4% in both 2018 and 2019. A long term focus on greater industrial innovation and building a skilled workforce is attracting serious investment by global manufacturers such as Jaguar Land Rover, whose factory in the western city of Nitra is fitted out to produce up to 150,000 vehicles a year. That’s helping to boost salaries with per-capita income, based on purchasing power parity, now the second highest in Central and Eastern Europe after Slovenia.
Public debt as a share of economic output was 51.6% in 2017, below the regional average, with Kažimír keen to nudge that ratio below the 50% mark. Unemployment has fallen during his tenure by a little over six percentage points, tumbling from 14% in 2012 to 8.3% in 2017.
The allure of a growing market that has so far avoided any of the turbulence that often disturbs and torments emerging markets was underlined in June 2018 when the republic sold €1.5bn ($1.77bn) worth of 10 year and 50 year bonds from a combined book of more than €5bn, with the ultra-long maturity helping to pique interest from insurers and pension funds. “Kažimír continues to do a tough job well,” noted the chief economist at a leading regional lender.