RECENT ECONOMIC SITUATION IN SLOVAKIA

IndustriAll Europe Eastern Region

Gdansk, 07.04. 2014

INDICATORS OF SLOVAK ECONOMIC DEVELOPMENT AND FUTURE PROGNOSIS

Indicator UnitReality Prognosis

2011 2012 2013 2014 2015 2016

GDP. mld. EUR 69,1 71,5 73,0 75,8 79,5 83,5

GDP, real increase % 3,2 2,0 0,8 2,2 2,9 3,1

Private consumption, nominal increase % 3,4 3,1 2,0 2,5 4,3 4,6

Private consumption, real increase % -0,5 -0,6 0,5 0,8 2,1 2,2

Governmental consumption % -4,3 -0,6 -0,7 -1,2 -2,3 -2,2

Fixed investments % 14,2 -3,7 -5,8 2,9 -0,1 -1,5

Export of products and services % 12,7 8,6 4,8 4,3 4,5 5,1

Import of products and services % 10,1 2,8 1,7 3,3 2,9 3,3

Employment % 1,9 -0,1 -1,0 0,2 0,6 0,7

Unemployment rate % 13,6 14,0 14,5 14,3 13,6 12,7Average monthly wage, nominal increase % 2,2 2,4 2,6 2,8 3,4 3,5

Average monthly wage, real increase % -1,6 -1,2 0,9 1,1 1,3 1,2

Inflation % 3,9 3,6 1,6 1,7 2,1 2,3

CONSOLIDATION MEASURES Changes in income tax (progressive taxation)

Income tax of legal persons 23% (since 2015 decline to 22% + tax licenses for business companies)

Income tax of natural persons 19% and 25% Self employed person (SZČO)

Change in definition SZČO Increase of minimum survey base (1/2 average wage) Change in calculation of survey base (always number of months per year + coefficient) Restriction of lump sum expenditures (420 EUR per month, max 5040 EUR per year)

Increase of payment ceilings to quintuple of average wage Implementation of payments in case of contracts for work Payment holidays 1 year in case of employment of long-term unemployed

person Amendment of Labour Code since 1.1. 2013 Changes in second pension pillar Changes in payment of unemployment benefits and sickness benefits Changes in valorization of pensions and Christmas bonus Higher taxation of tobacco products Extraordinary payment for banks Extraordinary payment for regulated companies Public services reform ESO

GDP INCREASE DEVELOPMENT IN MIL. EUR AND IN %

In common prices In constant prices

2005

2006

2007

2008

2009

2010

2011

2012

0.00

10,000.00

20,000.00

30,000.00

40,000.00

50,000.00

60,000.00

70,000.00

80,000.00

-10.00%

-5.00%

0.00%

5.00%

10.00%

15.00%

71,463.03

3.40%

mil. EUR annual change

2005

2006

2007

2008

2009

2010

2011

2012

0.00

10,000.00

20,000.00

30,000.00

40,000.00

50,000.00

60,000.00

70,000.00

-6.00%

-4.00%

-2.00%

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%65,245.68

2.00%

mil. EUR annual change

3Q-2013GDP48 739,6

3Q-2013GDP53 741,2

UNEMPLOYMENT DEVELOPMENT IN %

2005 2006 2007 2008 2009 2010 2011 2012 20130.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

14.00%

16.00%

18.00%

13.60%14.10%

14.00%

Labour Force Survey National Statistics

INFLATION RATE DEVELOPMENT IN %HICP (EUROSTAT) VS. CPI (ŠÚSR)

2005 2006 2007 2008 2009 2010 2011 2012 20130.00%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

3.50%

4.00%

4.50%

5.00%

1.46%

1.40%

HICP CPI

DEVELOPMENT IN WAGES IN EUR

Minimum monthly wage Average monthly wage

Data for 2013 and 2014 is estimation based on approved State budget for 2014

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

0.0

50.0

100.0

150.0

200.0

250.0

300.0

350.0

400.0

94.0

96.0

98.0

100.0

102.0

104.0

106.0

108.0

110.0

112.0

352.0

104.2

Minimum Monthly WageIndex MMW

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

0.0

100.0

200.0

300.0

400.0

500.0

600.0

700.0

800.0

900.0

98.0

100.0

102.0

104.0

106.0

108.0

110.0

805.0825.9849.1

102.4102.6102.8

Average Monthly WageIndex AMW

PROPORTION OF MINIMUM MONTHLY WAGE ON AVERAGE MONTHLY WAGE IN %

2005 2006 2007 2008 2009 2010 2011 2012 2013 20140.0

150.0

300.0

450.0

600.0

750.0

900.0

36.00%

37.00%

38.00%

39.00%

40.00%

41.00%

42.00%

805.0825.9

849.1

327.2 337.7 352.0

40.65%40.89%

41.46%

Average Monthly Wage Minimum Monthly Wage Proportion MMW on AMW

EUR

Data about AMW for 2013 and 2014 is estimation based on approved State budget for 2014

PROPORTION OF WAGES ON GDP IN SLOVAKIA AND EU 27

Source: Eurostat + own calculations

39.6%

50.5%

9.9%

Proportion of wages on GDP 2002 SR

mzdyziskydane (tovary a služby) 50.0%

38.4%

11.6%

Proportion of wages on GDP 2002 EU-27

mzdyziskydane (tovary a služby)

Podiel miezd na HDP SR 2002

37.9%

53.9%

8.2%

Proportion of wages on GDP 2012 SR

mzdyziskydane (tovary a služby) 49.5%

38.5%

12.0%

Proportion of wages on GDP 2012 EU-27

mzdyziskydane (tovary a služby)

DEVELOPMENT METAL – AVERAGE NOMINAL MONTHLY WAGE

Average nominal wage

Metallurgy MachineryElectrotechni

cal Engineering

Metal total

2000 457 424 391 427

2001 491 481 421 468

2002 515 531 448 501

2003 550 567 473 533

2004 620 636 556 606

2005 661 701 555 641

2006 697 751 592 683

2007 752 806 631 735

2008 800 866 674 785

2009 1011 785 717 797

2010 1117 853 756 863

2011 1132 907 804 912

2012 1165 957 849 960

2013 1215 1013 923 1019Hutníctvo Strojárstvo Elektrotechnika KOVO spolu

0

200

400

600

800

1000

1200

1400

1215 1013 923 1019

824

Average wage 2013