Prague the 12th Most Productive Region in the EU

According to data for 2006 released by Eurostat today, Bratislava region was the nineteenth most productive of all 271 regions in the European Union. Its GDP per inhabitant in purchasing power standards amounted to 149% of the EU average. This has to do with many large companies having headquarters and major facilities in the capital city, such as automotive manufacturer Volkswagen or oil refinery Slovnaft. Czech capital Prague ranked even higher – at place number twelve – and it is the most productive region of whole Central and Eastern Europe. Other regions of Slovakia ranked much lower, since their productivity ranged from only 44% of the EU average in case of Eastern Slovakia to 63% in Western Slovakia. Regional differences in living standards are thus quite pronounced in the country. However, this is the case of many other EU member states as well, such as Italy, Germany, Spain or the UK. The poorest regions of the EU can be found in Romania, Bulgaria and Poland.

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Workshop on New Institutional Economics

Ronald Coase Institute is organizing a workshop devoted to institutional analysis on May 10-15 together with the University of Economics in Bratislava. The deadline for applications is February 16 (Monday). The institute involves three Nobel Prize winners: Ronald H. Coase, Kenneth J. Arrow as well as Douglass C. North.

Germany as the Major Destination for Exports

Germany is the major trade destination for exports from five CEE countries:

1. Czech Republic - 30.9% of exports (1-11/08)
2. Hungary - 28.4% (2007)
3. Poland - 25.0% (1-11/2008)
4. Slovakia - 20.3% (1-10/2008)
5. Slovenia - 19.8% (1-11/2008)

Since exports-to-GDP ratios in Central and Eastern Europe are very high (roughly from 50 to 100%), a two-percent decline in Germany's economy this year is felt considerably in orders decline in the rest of "Mitteleuropa" as well.

Note: Lithuania's major export market is Latvia. Latvia's statistical office does not provide the necessary data. Estonia's major export partner is Finland. Croatia's major partner is Italy.

Brokered FDI down by Nearly 60% in Slovakia

Slovak investment agency Sario brokered almost sixty percent less foreign direct investment (FDI) last year compared to 2007. The amount of negotiated investment decreased from €1.28 billion to only €538 million (0.8% of GDP). Official central bank statistics of FDI inflow indicate a similar decline – by almost a third for the first ten months of the last year. However, the central bank data is often revised and contains estimates, which makes the overall numbers less reliable.
The reason for FDI inflow decline is that many companies scaled back their expansion plans due to global financial crisis. Japanese electronics manufacturer Sony, for instance, has been one of those belonging to this group. Other projects have been put on hold by hesitant firms facing uncertain times. Yet, there were a few significant large investments announced. For example, Bratislava-based plant of Volkswagen announced expansion worth €300 million last year.
Sario officials say that 2009 could witness resumption in FDI flows thanks to the Slovak adoption of common currency Euro as of January 1 this year. The agency is currently working on 122 projects bringing potentially more than € 2 billion of capital into the country. Five of the projects exceed € 300 million in value.