The year 2013 was a nightmare for the labour market in Slovakia due to slow economic growth, tax hikes and complicated legislation that made companies think twice before opening new positions.
Unemployment rates hit levels unseen since 2004. Business owners have kept on complaining about bureaucracy and corruption. But it could have been worse, at least according to Andrej Arady, an economist with VUB bank:
“Economists and companies’ expectations for 2013 were low but we saw that Slovakia’s economy grew more than the eurozone average or the economies of surrounding countries. Unfortunately the labour market did not follow this “better than expected” trend with the unemployment rate breaking records. The change in the labour legislation played a role in this situation. As a consequence, domestic consumption was weak and the economy was pulled forward by exports. Industry was the pleasant surprise of the year 2013 with producers of metal components performing very well in the second half of the year. “
Slovakia’s Central Bank has forecast that the economy will grow by 0.9% this year and 2.2% in the coming one with 2015 looking even brighter at 3.1%. Analysts say, however, that from a historical perspective the Slovak economy has created new jobs and considerably decreased unemployment only when GDP has grown by at least 3.5%. It means that next year will look bleak for many jobseekers.
“Our expectations for 2014 are higher than the ones for the current year. Industry will continue to do well with construction showing signs of recovery. In comparison to the eurozone we will show better macroeconomic figures. Unemployment remains a headache, unfortunately, “concluded Arady.
Some people might foresee a brighter year, however. The monthly salaries of approximately 343,000 clerks, police officers and workers in social services will increase by an average of €16. Teachers’ pay will also increase by up to €40 per month depending on experience. They will also keep existing benefits such as an extra week of holiday, shorter working hours, and higher severance payments upon retirement. And there are some good news for business owners too, with the Parliament approving a 1 percent cut in the corporate tax rate from next year. The reduced 22 percent rate is accompanied, however, by the introduction of the so called tax licences. Every company should pay for a tax licence for every period where its tax liability is less than the minimum tax amount, including in cases of recording losses. The sum, depending on whether the company pays VAT or not and on its revenues, varies from €480 to €2,880.
