ECONOMIC DEVELOPMENT OF SLOVAKIA IN 2009

After a rather long period of unprecedented economic growth, the Slovak Republic experienced an economic downturn in 2009. The small open economy, with an insufficient domestic market, responded sensitively to the slump in external demand. This was not the first serious destabilization of the Slovak economy, but the first one caused primarily by the external environment. Employment has been hit particularly hard by the recession, even though with a notable delay. The economy began to recover slowly in the first half of 2010; however the signs of recovery appear to differ considerably across sectors. The authors expect fragile recovery to continue further in 2010 (differentiated broadly by sectors), while the labour market development remains troubled. And with a certain time delay, the government's consolidation effort will probably enter this process.