Foreign Direct Investment

The stock of foreign direct investment, as of June 1999, was almost $2 billion according to Slovak National Bank data. Compared to neighbouring countries, the Slovak figure, as a percentage of GDP, is low. However, this is a direct consequence of the policy preferences of the previous Slovak Government which tended to spurn foreign investors seeking to participate in the privatisation process.

The new pro FDI and pro EU membership Slovak Government published its ‘Strategy for Support of Foreign Direct Investment Inflow’ on March 9th 1999. This approved strategy sets out the measures being taken to treble the level of FDI in Slovakia over the next three to four years. Indeed, Slovakia has commenced the ‘catching up’ process by recording the largest increase in FDI inflows in 1998 over 1997, for any country in Central and Eastern Europe - an increase of over 160%. Between 1985 and 1995, the annual average flow of FDI was only $80 million. In 1998, Slovakia secured $466 million in FDI.

Together, Germany and Austria account for 40% of the stock of FDI in Slovakia with the United States, the Netherlands and the United Kingdom representing the other significant sources of FDI. Around half of all investment was in the manufacturing sector within which automotive components, consumer electronics and precision engineering, represented the lion’s share.

According to recent SNAZIR research covering the top 250 existing foreign investors in Slovakia, the average number of employees in foreign owned enterprises was 500, the average level of fixed capital expenditure was $28.6 million and over half of them exported in excess of 90% of output. Moreover, around 90% reported that they had expansion plans which is a clear endorsement of the confidence they have in Slovakia to meet their medium to long term needs.

FDI Stock in Slovakia 1993 - 98 (Sept) - $1.8 billion

source: Slovak National Bank

FDI Stock in Slovakia 1993 - 98 (Sept) - by sector

source: Slovak National Bank