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ANALYSIS OF THE FOREIGN TRADE IN SLOVAKIA

Z. Brincikova, L. Darmo

Abstract

Foreign trade is one of the ways in which the national economy of the country is involved into the international division of labor with other countries. The extent of the participation of countries in international trade depends on the variety economic, political, natural, technical or other conditions. Due to the relatively small internal market and lack of sufficient energy and raw materials is the Slovak economy very open in the long term, what created the conditions for a highly positive development. In the context of the economyВґs orientation on luxury goods with a high elasticity of demand, however, a risk of negative external affects aroused, influencing export performance as well. The degree of openness of the economy has reached a level of 190% in 2013 and, on the basis of the assumptions of the IMF, forecasts for 2014 and 2015 are that its value should be increased still further - the expected rate of openness is 192% for the year 2015. As a result of the global economic crisis, the disadvantages of such a high openness of the economy began to show. Slovak republic has got namely in a case of a favorable world development huge growth potential, however, the negative development in the external environment causing the decrease of the foreign demand negatively influence the economyВґs performance. The paper is focused on the macroeconomic analyses of the international trade of Slovakia in the various aspects. It compares the Slovak economyВґs openness rate with the openness of the V4 countries and other EU countries and explains the development of the openness from the year 1993 until present, when SR takes the 4th place in rankings. SlovakiaВґs position was slightly weakened by the economic crisis. From the territorial point of view, the foreign trade of the Slovak republic focuses mainly on the EU countries, while exports to those countries represent approximately 90% and imports 65%. The commodity structure of foreign trade is largely concentrated in a few industries (manufacture of motor vehicles, manufacture of computer, electronic and optical products), which also corresponds to a high proportion of large firms in the foreign trade. The Slovak economy is import intensive, and as a result Slovakia is still dependent on the supply of strategic raw materials, mainly oil and natural gas from Russia. This dependence in relation to the development of unstable prices on world markets, leads to the negative development of the balance of trade. Foreign trade policy of the Slovak republic is conditioned by the membership in the EU and Eurozone, what determines also the Slovak proexport policy.

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DOI resolver: doi.org/10.5593/sgemsocial2014/b24/s7.006

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