Economic news released by SITA on Friday, February 9
Slovakia Reports SKK 12.5 Bln. Trade Deficit in December 2006
Slovakia reported a preliminary trade deficit of SKK 12.476 billion in December of last year. The trade gap in December thus narrowed by SKK 13.778 billion compared to December 2005. Monthly exports rose 18 percent y/y to SKK 97.894 billion and the volume of imports reached SKK 110.369 billion, up 1 percent y/y, the Statistics Office informed on Friday.
Core Inflation Accelerated to 2.9 Percent y/y in January
Core inflation that is used to measure growth of consumer prices with the exclusion of regulated prices and administrative interventions in the area of taxes reached 1.9 percent in January. In December, core inflation was unchanged. Growth of core inflation accelerated 0.2 percentage points in January compared with December to 2.9 percent year-on-year, Statistics Office of the Slovak Republic reported on Friday.
Slovakia posted monthly net inflation of 1.2 percent in January following negative 0.1 percent net inflation in December. Net inflation excludes the effects of food price development. In year-on-year terms net inflation remained unchanged in January and reached 2.7 percent.
One Unit of NPP V1 Jaslovske Bohunice Generated 310.6 GWh in January
The V1 Nuclear Power Plant in Jaslovske Bohunice, operated by Jadrova Vyradovacia Spolocnost (JAVYS), generated 310.6 GWh of electricity in January. The V1 nuclear power station has only one reactor, said JAVYS spokesman Dobroslav Dobak.
Slovakia Reports SKK 9.374 Bln. Revised Trade Deficit for November
Slovakia's Statistics Office revised the preliminary trade deficit for November to SKK 9.374 billion. The trade gap thus widened SKK 74 million compared with the published flash estimate. According to the revised preliminary data, country's trade deficit was SKK 5.282 billion higher y/y. Total exports rose 19.9 percent y/y in November to SKK 121.118 billion. Imports grew 24.2 percent to SKK 130.493 billion, the Statistics Office informed SITA on Friday.
Smurfit Kappa Sturovo Ends 2006 with SKK 97.7 Mln. Profit
Paper mill Smurfit Kappa Sturovo, a.s., closed last year with a profit of SKK 97.7 million according to data disclosed by the company. On March 12, shareholders should meet to approve the company's annual report, financial statements, and a proposal for the distribution of the profit. The annual general meeting is also expected to decide about a new composition of the board of directors and changes in the company's statutes.
McDonald`s Slovakia Reports Sales of SKK 840 Mln. in 2006
Fast food chain McDonald`s Slovakia reported an increase of sales by 19.7 percent compared with 2005 to SKK 840 million. The company also recorded major growth of the number of customers to 9.807 million, up 8.8 percent compared with 2005. The number of McDonald`s restaurants in Slovakia remained unchanged since 2002 at sixteen in six cities last year, while the number of employees increased by one hundred to 1013, the company announced.
Antitrust Office Issued Aggregate Fines of SKK 2.4 Bln. in 2006
The Antitrust Office (PMU) imposed on aggregate total fines of almost SKK 2.4 billion last year. "The office forbade concentrations eliminating competition on defined relevant markets and penalized businesses for cartel agreements and abuse of dominant positions on the market," writes PMU in its annual report for last year.
Shareholders Replace Board Members in SPP
Representatives of the state as the 51-percent shareholder in gas utility SPP were replaced at the initiative of the government's privatization agency the National Property Fund (FNM). Following approval by shareholders at a general meeting on Friday, changes were made in the board of directors and the supervisory board of SPP as well as its affiliated companies SPP-distribucia, a.s., and SPP-preprava, a.s. In total eighteen people were replaced in the highest executive and supervisory bodies of these companies, SPP spokesperson informed media on Friday.
Zekon Michalovce Clothing Firm Reports 2006 Output of SKK 266.5 Mln.
Clothing firm Zekon, a.s. Michalovce reported output of SKK 266.5 million last year. Compared with the previous year this means a drop by 32.2 percent. "The drop results from lower production of ready-made clothing and the decreasing number of employees," the vice-chairman of the board of directors Michal Kandala told SITA. The company closed 2006 in the black and achieved average profitability of sales of about 2 percent.
Cars in Slovakia Must Drive with Headlights on
Drivers in Slovakia will have to have their headlines on throughout the entire year. On Friday, parliament has approved an amendment to the law on roads submitted by coalition deputy Martin Pado. The aim of the revised law is to increase security and the flow of traffic. The amendment raises the minimum speed on highways from the current 50 kilometers per hour to 70 kilometers per hour. Out of 124 deputies, 67 raised their hands for the amendment. Apart from the opposition, all present deputies of the LS-HZDS, two SMER-SD deputies, and five deputies for the SNS supported the revision. The ruling coalition originally refused the draft.
Foreign Trade Results for December Disappointed Market Analysts
Results of the Slovakia's foreign trade in December were again of a negative surprise. On Friday, the Slovak Statistics Office published preliminary data according to which the trade deficit in December was SKK 12.476 billion, what was above market estimates. "We believed in a better export performance," said CSOB analyst Marek Gabris. In spite of this he regards the year-on-year growth in exports of 18 percent to SKK 97.894 billion as not a bad result. He also sees as a positive feature that the December export growth dynamics exceeded significantly import growth dynamics for the first time in the year. In December 2006, imports grew 1 percent y/y to SKK 110.369 billion. "This is because of the high comparative basis form the previous year when production technologies for the Kia plant near Zilina worth about SKK 10 billion were imported," added Tatra Banka analyst Juraj Valachy. He also thinks that companies might have started using stocks of input materials, which they imported during the third quarter of 2006.
Slovakia's FOREX Reserves Up USD 213.4 Mln. This Week
Slovakia's foreign exchange (FOREX) reserves increased by USD 213.4 million over the past week to USD 16.2907 billion as of February 7, 2007. Reserves of commercial banks were solely behind the growth, going up USD 419.3 million in a week to USD 2.4919 billion. On the other hand, reserve assets of the central bank declined USD 205.9 million in a week to USD 13.7988 billion, the NBS press department informed SITA on Friday.
Foreign Ministry Stops Project of Economic Cooperation with Iran
The Foreign Ministry has not supported a proposal of the Economy Ministry to develop economic relations with Iran. Therefore, the document on the orientation of Slovakia's foreign policy for this year that will be discussed in parliament after the Cabinet approves it will not feature this activity. Economy Minister Lubomir Jahnatek, however, speaks about a temporary delay. "It is only for this year, which means that this year negotiations on potential oil and gas supplies from Iran will not be opened." The minister undersocred that Iran exports gas and cude oil to the whole world. He just wonders why in Slovakia a thesis that "we cannot" is preferred. The minister said that if diversification is discussed in Slovakia, it has to map all deposits. The Economy Ministry will elaborate an analysis of alternatives for gas and oil supplies to Slovakia and submit it to the Cabinet in six months.
Fico Invited Chinese Entrepreneurs to Invest in Slovakia
Slovak Prime Minister Robert Fico invited Chinese entrepreneurs to invest in Slovakia, promising to provide favorable tax policies and a sound investment environment. Mr. Fico said this at Tuesday's business forum during his state visit to China, informed China Daily in its Thursday issue. The prime minister would like to see more Chinese high-tech firms invest in his country. "We certainly support the interest of some Chinese companies to start or increase their business activities in Slovakia in high added-value industry," stated Mr. Fico.
MONEY MARKET: Quiet Trading at End of Week
The money market closed this week with quiet trading. OTP Banka's Juraj Mitosinka stated that mostly shorter deposits were traded on Friday. Commercial banks deposited SKK 13.904 billion in their reserve accounts in the National Bank of Slovakia (NBS) on Friday, meeting the February minimum reserve requirement on a cumulative basis at 73.35 percent. Despite higher prices on the market, as much as SKK 170 million ended up in the central bank's sterilization at 3.25 percent.
Minister Complains of Shortage of Technical University Graduates
President Ivan Gasparovic and Economy Minister Lubomir Jahnatek visited Nitra on Friday. They agreed that Slovakia is suffering from a shortage of graduates from all kinds of technical schools. The minister said that universities are pumping out
graduates from humanities colleges who cannot find jobs. According to Mr. Jahnatek, it will be inevitable to find a new system and increase the
share of students in technical programs. However, these changes should reflect development and the needs of the market and the entrepreneurs.
FOREX MARKET: Crown's Exchange Rate Moves in Narrow Band on Friday
The FOREX market reported quiet trading in the Slovak currency at the end of the week, and the crown's exchange rate moved in a very narrow band over the whole day. Tatra Banka's Boris Somorovsky said that the local currency opened at 34.52/34.56 SKK/EUR. The crown moderately weakened to 34.62/34.66 SKK/EUR, and later it strengthened to 34.53/34/57 SKK/EUR. "Other regional currencies also were stable," Mr. Somorovsky commented.
Cabinet to Deal with Changes to Capitalization Pillar in March
The Cabinet should deal with the draft revision to the law on retirement pension-saving already in March of this year. According to the preliminary information from the Labor and Social Affairs Ministry, the revision should introduce voluntary entry into the capitalization pension pillar and enable the return to the pay-as-you-go pillar to those savers for whom the pension savings scheme is disadvantageous. "Those who are currently obliged to join the retirement pension-savings scheme, will be able to be relieved of this obligation before their entry within a strictly set deadline," reads the ministry. In addition, the revision should strictly define the period and set the terms under which will savers be able to quit the capitalization pillar.
STOCK MARKET: SAX Index Firms 1.64 Pct. on Friday
Slovakia's official SAX share index strengthened 0.39 percent or 1.64 points to 422.26 points at the end of the week. Shares of the power-engineering company SES Tlmace were behind these gains. Turnover on the Bratislava Stock Exchange (BCPB) dropped from SKK 396.066 million on Thursday to SKK 43.82 million on Friday with SKK 1.648 million in share trading.