994 macroeconomic performance improved steadily but
privatization progressed only in fits and starts. Most of Slovakia's
IMF-approved targets were met by an interim government that lasted 9
months. Annual inflation fell from 23% in 1993 to 12%; unemployment at
14.6% was still well below forecasts of 17%; and the budget deficit
was around half that in 1993. Slovakia's nearly $200 million trade
surplus also compares favorably with a more than $800 million deficit
in 1993. Furthermore, after contracting almost 25% in the three years
following 1990, GDP grew 4.3% in 1994, according to official
statistics. Bratislava in June qualified for a $254 million IMF
stand-by loan and the second $90 million tranche of its Systemic
Transformation Facility and, in December, received approval for a
European Union loan worth about $160 million. By the end of September
1994, the Central Bank's foreign currency reserves had tripled since
the end of 1993. Slovakia continued to have difficulty attracting
foreign investment, however, because of perceived political
instability and halting progress in privatization. The interim
government prepared property worth nearly $2 billion for the second
wave of coupon privatization and sold participation in the program to
over 80% of Slovakia's eligible citizens. Parties controlling the new
Parliament in November 1994, however, put the second wave of coupon
privatization on hold and suspended sales of 38 firms until the new
government could evaluate the interim government's decisions in early
1995. The new government's targets for 1995 include GDP growth of 3%,
inflation of 8%-10%, unemployment of 15%, and a budget deficit under
3% of GDP. Continuing economic recovery in western Europe should boost
Slovak exports and production, but Slovakia's image with foreign
creditors and investors could suffer setbacks in 1995 if progress on
privatization stalls or budget deficits mount beyond IMF-recommended
levels.

National product: GDP - purchasing power parity - $32.8 billion (1994
est.)

National product real growth rate: 4.3% (1994 est.)

National product per capita: $6,070 (1994 est.)

Inflation rate (consumer prices): 12% (1994 est.)

Unemployment rate: 14.6% (1994 est.)

Budget:
revenues: $4.4 billion
expenditures: $4.8 billion, including capital expenditures of $350
million (1994 est.)

Exports: $6.3 billion (f.o.b., January-November 1994)
commodities: m