Even though German companies in Slovakia and Germany perceive the current economic situation in a prevailingly positive way, they are more sceptical in terms of the future. While only 16 percent of companies expect economic growth in the next 12 months, the share of optimists in the European Union is 34 percent on average, showed the regular autumn survey of German chambers in the European Union.
Peter Kompalla, executive director of the German-Slovak Chamber of Commerce (SNOPK), ascribes the gap between expectations to intercultural differences when Slovakia as well as Germany are more pessimistic nations compared to others, but also to the current development in the automotive industry. Car production is an important economic pillar for both Germany and Slovakia. “The mood in the automotive sector in Germany is more tense,” said Kompalla.
This is because this sector is under pressure due to the adopted climate politics aimed at the reduction of CO2 emissions, where the demand for more environmentally friendly cars are not as high as desired. Moreover, German carmakers are simultaneously very dependent on the Chinese market, which however is very weak in the time being, with an annual decline in car sales of 20 percent. On the other hand, sales in Europe and US remain stable.
Yet the latest statistics indicate a positive development when Eurostat data confirmed economic growth either for Germany as well as Slovakia in the third quarter of 2019. The German economy avoided falling into recession in the third quarter by registering a meagre 0.1 percent growth quarter to quarter while Slovakia grew 0.4 percent q-to-q.
“More and more indicators imply that the German economy is getting into shape again,” said SNOPK president Peter Lazar. “This is a good news for the Slovak economy.”
Slovakia closely linked to German economy
“Since the economic crisis from 10 years ago, the economic growth in Germany and Slovakia is more or less synchronous,” explained Lazar, adding that this is due to the close economic interconnection between two countries. “Germany is the most important trade partner of Slovakia and one of the main countries in terms of origin of investments.”