RESTRICTED
WORLD TRADE WT/BOP/W/5
15June1995
ORGANIZATION(95-1591)
Committee onBalance-of-Payments Restrictions
1995 CONSULTATION WITH THE SLOVAK REPUBLIC
UNDER THE BALANCE-OF-PAYMENTS PROVISIONS OFTHE
GATT 1994 AND THE RELATED UNDERSTANDING
Background paper bytheSecretariat
I. Introduction
1. Thispaper hasbeenprepared inaccordance withparagraph 12oftheUnderstanding onthe
Balance-of-Payments Provisions oftheGeneral Agreement onTariffs andTrade 1994.1
2. Thepresent consultation stems fromtheintroduction ofatenpercentsurcharge onparticular
imports bytheSlovak Republic inMarch 1994. Atthattime, theofficial reserves oftheSlovak Republic
stood attheequivalent oflessthanonemonth 'smerchandise imports. TheSlovak Republic notified
GATT CONTRACTING PARTIES oftheimposition ofthesurcharge indocument L/7428 andstated
thatthemeasure wasintroduced "toprevent theworsening ofthesituation andtoreach thenecessary
stabilization ofthecountry 'smonetary reserves.... Themeasure isconsidered asashort-term
supplementary element within theframework ofeconomic policy aimed attheimprovement ofthe
country 'sexternal equilibrium."
3. ApreviousconsultationwasheldinJuly1994withtheGATTCommitteeonBalance-of-Payments
Restrictions.2TheCommittee welcomed earlysignsofimprovement intheSlovak Republic 'seconomic
performanceandnotedthatalthoughthemeasuremighthaveashort-termbeneficialeffectonthebalance-
of-paymentssituation,theimportsurchargewould,ifmaintained,becomedetrimentaltoefficientresource
allocation anddiscourage economic growth. During theconsultation, therepresentative oftheSlovak
Republic stated thattheauthorities intended toeliminate thesurcharge bytheendof1994. The
Committee encouraged theSlovak Republic toadhere tothisdateforelimination.
II. Policy Developments
4. Theimport surcharge wasintroduced byDecree No.45/1994 oftheMinister ofFinance
followingauthorizationresultingfromGovernmentResolutionNo.161of1March1994.Thesurcharge
isapplied onanon-discriminatory basis, including onimports fromtheCzech Republic, withwhich
theSlovak Republic hasacustoms union agreement, andonimports fromallother preferential trade
partners. Since itsintroduction, thesurcharge hasapplied to75percentoftariff linescomprising
allorportions of72chapters oftheHarmonised System. According totheSlovak authorities, the
1Itisrecalled that,under Article XII,paragraph 5oftheGeneral Agreement onTrade inServices
(GATS) procedures forconsultations "shall bethesame astheGATT 1994 procedures".
2GATT documents BOP/319, BOP/W/156 andBOP/R/218.WT/BOP/W/5
Page2
affected tarifflinescover 57percentofthevalue ofmerchandise imports.3Imports otherwise subject
tothesurcharge butimported forfurther re-processing, processing, completion, orassembly in
production areexempt.4
5. Dataprovided bytheSlovak authorities indicate thewideuseofthisexemption provision, with
thesurcharge actually being applied onabout 13percentofimports. Surcharge revenue for1994
during thetenmonths inwhich thesurcharge wasinforce equalled Sk2.2billion, indicating thatthe
surcharge hadbeenapplied onSk22billion ofimported goods. Total merchandise imports in1994
wereSk211.5 billion, orabout Sk176billion forthetenmonth period.5Implicit import surcharge
rates, based onsurcharge revenue dataonasix-digit HSbasis, varywidely across HSchapters (Table 1).
While 56HSchapters haveimplied surcharge ratesof2.0percentorless,27chapters haveimplied
ratesofatleast5.0percent. Theimplied import surcharge rateisinexcess ofhalfofthesimple average
tariffratein31HSchapters. In14ofthesechapters theimplied import surcharge rateactually exceeds
theaverage tariff rate.
6. TheSlovakRepublic'sm.f.n.tariffsarefullyboundasaresultoftheimplementationofUruguay
Round commitments andaverage 8.0percentonanunweighted basis. M.f.n. tariffs average
1.7percentwhen weighted byimports from non-preferential trading partners. According tothe
authorities, applied tariffs areequal tobound rates.
7. AbilateralpaymentsagreementhasexistedbetweentheSlovakRepublicandtheCzechRepublic
sincethecurrency separation inFebruary 1993. Transactions between thetwocountries areconverted
from thecurrency ofthecontract intoclearing ECUs attheratesetbytherespective central bank,
andbalances inexcess ofaclearing limitaresettled monthly bythecentral banks. Inprinciple, a
clearing ECU isequal tooneECU; however, afivepercentdeviation between thetwoisallowed
intheagreement. TheSlovak koruna wasdevalued against theclearing ECUtothemaximum 5percent
differential inDecember 1993, andthisrelationship wasmaintained untilrecently.6InMay1995the
Slovak koruna wasrevalued by4percentagainst theclearing ECU andthere nowexists onlya1
percentdifferential. Thebilateral payments agreement gives risetoanexchange restriction anda
multiple currency practice subject toIMFapproval under IMFArticle VIII, section 2(a).
3Annex I,GATT document BOP/R/218.
4Such goods imported forthepurposes ofproviding services (such asrepair orrestoration) do,
however, facethesurcharge.
5Thissuggests thattheshare ofimports onwhich thesurcharge wasactually paidwasequal to
approximately 22/176, or13percent.
6Earlier ratechanges tookplace during early1993, butfromMayuntilDecember 1993, theSlovak
koruna ratewithrespect totheECU andtotheclearing ECU were equal. TheratesoftheCzech
koruna withrespect totheECU andtotheclearing ECU havebeenidentical since March 1994.WT/BOP/W/5
Page3
Table 1
Slovak Republic :M.f.n. tariff rates andimplied import surcharge rates, byHSChapter.
(Percent)
M.f.n. tariff
HSNo.
of
linesDescriptionSimple
averageWeighted
averageaImport
surcharge
01 15 Liveanimals 19.5 1.6 0.0
02 50 Meat andedible meat offal 46.3 40.1 1.9
03 87 Fishandcrustacea, mollusca &other aquatic invertebrates 0.2 0.0 0.0
04 25 Dairy prods.; birds'eggs; natural honey; edible prods., n.e.s. 29.1 17.7 4.5
05 17 Products ofanimal origin, n.e.s. orincluded 0.0 0.0 0.0
06 13 Livetreeandother plant; bulbs; roots; cutflowers, etc. 3.5 5.6 8.8
07 57 Edible vegetables andcertain roots andtubers 7.1 19.6 6.9
08 50 Edible fruitandnuts; peelofcitrus fruitormelons 3.2 4.8 2.0
09 33 Coffee, tea,matû andspices 4.2 3.6 2.3
10 16 Cereals 8.7 14.5 0.0
11 34 Prod. millindustry; malt; starches; inulin; wheat gluten 23.3 20.2 2.7
12 44 Oilseed, oleagi fruit; miscellaneous grain, seed, fruit, etc. 3.6 8.2 0.0
13 12 Lac; gums, resins andother vegetable saps&extracts 1.0 7.3 0.0
14 11 Vegetable plaiting materials; vegetable products, n.e.s. 0.0 0.0 0.0
15 52 Animal/vegetable fats&oils&theircleavage products; etc. 8.1 19.9 5.0
16 25 Preparation ofmeat, fishorcrustaceans, molluscs, etc. 8.2 0.9 1.8
17 15 Sugar andsugar confectionery 50.8 14.9 4.2
18 11 Cocoa andcocoa preparations 8.7 10.1 6.0
19 16 Preparation ofcereal, flour, starch/milk; pastrycooks 'products 14.0 11.4 7.9
20 45 Preparation ofvegetable, fruit, nutsorother parts ofplants 10.6 2.9 5.7
21 15 Miscellaneous edible preparations 8.9 5.4 6.7
22 21 Beverages, spirits andvinegar 38.3 69.8 5.9
23 24 Residues &waste from thefoodindustry, prep. animal fodder 0.4 1.0 0.2
24 9 Tobacco andmanufactured tobacco substitutes 30.6 42.1 7.4
25 77 Salt,sulphur, earth &stone, plastering materials, lime, cement 0.7 1.5 0.1
26 34 Ores, slagandash 0.1 0.0 0.0
27 40 Mineral fuels, oils&products oftheirdistillation, etc. 1.7 0.0 0.0
28 190 Inorgn chems, compds ofprecmet,radioactive elements etc. 1.7 0.0 0.0
29 297 Organic chemicals 4.8 2.8 0.0
30 30 Pharmaceutical products 3.7 3.5 0.0
31 26 Fertilisers 3.0 0.2 1.3
32 46 Tanning/dyeing extracts, tannin &derivatives, pigments, etc. 4.5 4.5 0.1
33 34 Essential oils&resinoids, perfumes, cosmetic/toilet preps 6.5 8.9 7.7
34 23 Soap, organic surface-active agents, washing preparations, etc. 4.4 3.1 5.5
35 13 Albuminoidal subsstances; modified starches; glues; enzymes 10.9 7.6 2.4
36 8 Explosives, pyrotechnic products, matches, pyrop. alloy, etc. 5.0 5.4 1.0
37 36 Photographic orcinematographic goods 2.8 3.0 0.0
38 56 Miscellaneous chemical products 4.5 5.8 0.0
39 123 Plastics andarticles thereof 5.8 5.6 0.7
40 66 Rubber andarticles thereof 4.2 0.7 1.3
41 34 Rawhides andskins (other thanfurskins) andleather 0.9 0.2 0.0
42 22 Articles ofleather; saddlery/harness; travel goods, etc. 5.6 6.7 9.2
43 18 Furskins andartificial fur;manufactures thereof 1.3 1.0 1.7
44 66 Wood andarticles ofwood; wood charcoal 4.5 1.8 2.0
45 7 Cork andarticles ofcork 2.1 5.7 0.0
46 6 Manufactures ofstraw, esparto/other plaiting materials, etc. 4.8 5.3 10.0
47 19 Pulpofwood/of other fibrous cellulosic materials; waste, etc. 4.2 0.0 0.0
48 111 Paper &paperboard; articles ofpaper pulp, paper/paperboard 9.7 7.0 1.3
49 19 Printed books, newspapers, pictures andother products, etc. 3.3 0.8 1.7
Table 1(cont'd)WT/BOP/W/5
Page4
HSNo.
of
linesDescriptionSimple
averageWeighted
averageaImport
surcharge
50 10 Silk 3.2 5.3 4.2
51 36 Wool, fine/coarse animal hair,horsehair yarn&fabric 3.1 0.0 0.8
52 127 Cotton 7.1 0.7 0.6
53 31 Other vegetable textile fibres, paper yarn&woven fabric 2.4 0.7 1.3
54 65 Man-made filaments 6.3 4.8 3.7
55 115 Man-made staple fibres 6.2 6.0 1.9
56 27 Wadding, felt&non-woven, yarn, twine, cordage, etc. 7.5 7.5 0.2
57 23 Carpets andother textile floor coverings 10.9 12.0 5.2
58 41 Special woven fabrics, tufted tex.fab,lace, tapestries, etc. 7.2 5.9 0.5
59 25 Impregnated, coated, cover/laminated textile fabric, etc. 6.5 4.4 0.3
60 18 Knitted orcrocheted fabrics 7.4 6.6 2.6
61 114 Art.ofapparel &clothing access, knitted orcrocheted 9.1 9.9 8.3
62 119 Art.ofapparel &clothing access, notknitted/crocheted 10.4 11.1 8.8
63 58 Other made-up textile articles, sets,worn clothing, etc. 11.2 9.0 5.2
64 29 Footwear, gaiters andthelike,parts ofsucharticles 10.4 11.0 6.0
65 11 Headgear andparts thereof 5.1 5.3 9.0
66 7 Umbrellas, walking sticks, seatsticks, whips, etc. 7.0 9.7 9.4
67 8 Prepr feathers &down, artif. flowers, articles human hair 4.3 8.9 0.0
68 53 Art.ofstone, plaster, cement, asbestos, mica/sim. mat. 6.7 4.8 3.0
69 28 Ceramic products 7.1 7.3 6.8
70 57 Glass andglassware 10.8 11.1 1.4
71 52 Natural/cultured pearls, prec. stones &metals, coin, etc. 2.2 8.5 5.2
72 194 Ironandsteel 5.0 4.8 0.0
73 118 Articles ofironorsteel 6.5 5.9 1.1
74 58 Copper andarticles thereof 3.9 1.5 0.2
75 16 Nickel andarticles thereof 1.9 3.1 0.0
76 34 Aluminium andarticles thereof 5.4 1.4 0.4
78 10 Lead andarticles thereof 3.6 1.0 0.0
79 11 Zincandarticles thereof 3.8 0.0 0.0
80 9 Tinandarticles thereof 2.3 0.0 0.1
81 36 Other basemetals 0.3 0.0 0.0
82 65 Tool, implement, cutlery, spoon &fork, ofbasemet.etc. 5.3 4.8 6.6
83 36 Miscellaneous articles ofbasemetal 5.6 5.5 1.9
84 498 Nuclear reactors, boilers, machinery &mech. appliances, parts 5.0 3.0 0.7
85 264 Electrical mach., equipment, parts thereof, sound recorder, etc. 5.3 3.5 1.8
86 24 Railway/tramway locomotives, rolling-stock, parts thereof, etc. 7.5 5.7 0.0
87 76 Vehicles o/trailway/tramway roll-stock, parts andaccessories 8.4 13.8 2.6
88 15 Aircraft, spacecraft, andparts thereof 5.9 7.0 0.0
89 17 Ships, boats andfloating structures 5.7 6.2 3.0
90 152 Optical, photo., cine., measuring, checking, precision, etc. 4.0 4.2 0.2
91 55 Clocks andwatches andparts thereof 3.1 3.5 6.1
92 23 Musical instruments; parts andaccess ofsucharticles 7.0 5.4 4.4
93 17 Arms andammunition, parts andaccessories thereof 3.7 1.4 1.2
94 37 Furniture, bedding, mattress, mattress support, cushion, etc. 8.2 7.4 5.2
95 43 Toys, games &sports requisites, parts &accessories thereof 7.6 7.3 6.8
96 51 Miscellaneous manufactured articles 5.0 5.2 5.9
97 7 Works ofart,collectors pieces andantiques 1.4 0.0 3.8
... Notavailable
a Weighted byimports from countries thatdonothaveapreferential agreement withSlovakia andarenotgranted GSP;
based on1995 tariffs and1994 import values.
Source: WTO Secretariat, based ondataprovided bytheCzech andSlovak authorities.WT/BOP/W/5
Page5
III. Macroeconomic andTrade Developments
8. TheSlovak economy experienced a5percent,export-led expansion in1994 (Table 2).The
merchandise trade balance moved fromadeficit equal to8percentofGDPin1993toasurplus equal
to1percentofGDP in1994, while thecurrent account balance similarly moved from a5percent
deficit in1993toa6percentsurplus in1994. Overall, Slovakia 'ssurplus onthebalance ofpayments
increased from 3percentofGDP in1993 to11percentin1994.
9. Corresponding tothelargesurplus onthebalance ofpayments in1994wasanincrease ofsimilar
magnitude inSlovakia 'sgross reserves, which rosebyUS$1.7 billion, equal tosome 12percentof
GDP.7Official reserves increased from US$0.4 billion attheendof1993 toUS$1.7 billion atthe
endof1994. Thisamount isequivalent to2.4months ofSlovakia 'simports ofmerchandise and
nonfactor services, or3.1months ofmerchandise imports.
(a) Output, Employment andPrices
10. Measured economic activity intheSlovak Republic fellineachofthefirstfouryears ofthe
economic transition. In1993 realGDP was22percentbelow itsratein1989. Thisreflected large
declines inpersonal consumption andfixed investment during theperiod. The5percentgrowth of
1994followed a4percentcontraction in1993. Theshare oftheprivate sector in1994was58percent,
including cooperatives (14percent) andfirms withmixed public andprivate ownership.
11. Theunemployment rateinSlovakia attheendof1994 remained near14percent, itslevel
ofayearearlier. Consumer prices averaged some 13percenthigher in1994 thanin1993.
(b) Public Finance
12. Slovakia 'sfiscal deficit continued todecline in1994, falling to2.5percentofGDP from7.6
percentofGDPin1993(Table 3).Realgovernment expenditure didnotchange substantially although
asashare ofGDP, government expenditure declined from55.7to52.6percent. Government revenue
increased from 48.1to50.1percentofGDP.
(c) Money andCredit
13. Broad money continued togrow rapidly in1994, increasing by19.1percentintheyearending
December 1994 afteranincrease of18.5percenttheprevious year. Thisexpansion resulted from
substantial increases innetforeign assets (foreign assets doubled tooverSk102 billion andforeign
liabilities changed little), while netdomestic assets declined slightly. Interest ratesaveraged higher
in1994thanin1993, withincreases from14.1to14.9percentoncredit toenterprises andanincrease
onrates forhousehold deposits from 9.6to11.2percent. Therateonhousehold deposits was
nevertheless below therateofincrease ofconsumer prices.
7Thedifference between thebalance ofpayments surplus andtheincrease ingross reserves isdue
tochanges inshort-term liabilities andnetIMFcredit.WT/BOP/W/5
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Table 2
Slovak Republic: Performance andmajor features oftheeconomy
1992 1993 1994
Population (millions) 5.31 5.33 5.36
Unemployment (endofyear; percent) 10.4 14.4 14.2
RealGDPa(SKbillions) 181.2 173.8 182.2
Percentchange from previous year -7.0 -4.1 4.8
Consumer prices (percentincrease; period average) 10.0 23.2 13.4
Nominal GDP (SKbillions) 307.8 340.2 401.2
Nominal GDP ($billions) 10.9 11.0 12.5
Nominal exchange rate,SKperUS$(endofperiod) 28.9 33.2 31.3
Realeffective exchange rateappreciation, percent(endofyear) 0.5 -1.8 2.4
Official reserves, incl.goldb(US$ billions) 0.4 0.4 1.7
Official reserves inmonths ofimports ofgoods andservices 0.5 0.6 2.4
Official reserves inmonths ofimports ofgoods 0.7 0.8 3.1
Composition ofGDPaPercentofGDP
Private consumption 49.4 52.1 48.0
Government consumption 25.2 27.4 25.0
Gross fixed capital formation 29.2 25.6 21.9
Change instocks -4.5 -4.9 n.a.
Netexports ofgoods andnon-factor services -0.7 -0.2 n.a.
Statistical discrepancy 1.4 -0.1 n.a.
Sectoral GDP sharesc
Agriculture andforestry 6.2 6.6 7.4
Industry andconstruction 44.7 43.6 35.7
Market andnon-market services 49.1 49.8 56.9
Macroeconomic balancesd
Gross national savings 19.5 22.4 n.a.
Government -6.9 -3.3 n.a.
Gross domestic savings 19.8 22.4 n.a.
Gross domestic investment 24.7 24.8 n.a.
Government 6.2 4.1 n.a.
Non-government 18.5 20.7 n.a.
Foreign savings 5.2 2.4 n.a.
Memorandum: General government surplus -13.1 -7.6 -2.7
Balance ofpayments:
Current account balance 0.4 -5.4 5.7
Merchandise trade balance -6.6 -8.4 0.8
Exports, f.o.b. 59.9e49.3 53.7
Imports, f.o.b. 66.5e57.8 52.8
Services balance -0.2 2.4 5.2
Receipts 14.1 17.7 18.0
Expenditures 14.3 15.2 12.8
Netfactor income from abroad -0.3 -0.4 -1.0
Netcurrent transfers 7.5 0.9 0.6
Capital account balance -0.8 8.9 3.6
Netdirect foreign investment 0.9 3.4f2.0
Clearing balance withCzech Rep. (neg. indicates surplus) n.a. 1.7 -4.9
Errors andomissions -4.6 -0.2 2.1
Balance ofpayments -5.0 3.2 11.4
Change ingross reserves (neg. indicates increase) -0.9 -4.7 -11.9
n.a. Notavailable.
a Preliminary data; 1984 prices. Includes Transgas andforeign trade organizations.
b Excluding US$0.5 billion ingoldandforeign exchange obtained through goldswaps (US$122 million asofNovember 1994).
c Atcurrent prices.
d Figures for1992 exclude fiscal transfers fromtheCzech Republic thatamounted toseven percentofSlovak GDP. Figures for
1993 exclude military imports from Russia valued at1.6percentofGDP, which were exchanged forawrite-down ofdebt.
Thisexplains thediscrepancies for1992 and1993 between thesavings -investment difference inthissection andthecurrent
account balance inthefollowing section.
e Includes transactions withtheCzech Republic.
f Including US$529 million (4.8percentofGDP) ofSlovak shares inCzech companies acquired through voucher privatization;
thecounterpart, acapital transfer, isincluded inthecapital account balance.
Source: IMFandSlovak authorities.WT/BOP/W/5
Page7
Table 3
Slovak Repbulic: Fiscal Developments in1992-1994a
(PercentofGDP)
1992b1993 1994c
Total revenue 49.7 48.1 50.1
Indirect taxes 13.1 13.8 14.5
Direct taxes 17.7 10.7 12.5
Social security contributions 9.8 12.6 12.6
Other taxes 2.0 2.4 2.8
Import surcharge n.a. n.a 0.5
Nontax revenue 7.2 8.5 7.7
Total Expenditure 62.6 55.7d52.6
Current expenditures 54.5 49.5 47.6
Wages 5.0 4.7 4.2
Social expenditures 18.4 17.2 15.8
Health care 5.0 4.6 5.8
Subsidies 5.3 5.1 4.6
Debt servicee... 3.9 5.0
Other ... 14.0 12.2
Capital expenditures 8.1 6.2 5.0
Fiscal Balance -12.8 -7.64-2.5
a Consolidated general government.
b Based onanestimate ofgeneral government revenue andexpenditure intheterritory oftheSlovak Republic (i.e.,including portions
offederal revenues andexpenditures).
c Original estimate ofGDP.
d Excluding military imports, equivalent to1.6percentofGDP, inexchange forawrite-down ofclaims onRussia.
e Interest, lending, andguarantees called, excluding allamortization.
Source: IMFandSlovak authorities.
(d) Exchange Rate
14. TheSlovak koruna ispegged toacurrency basket comprising theUnited States dollar
(40percent)andtheDeutsche Mark (60percent). Following a10percentdevaluation inJuly1993,
thekoruna 'svalue against thebasket hasremained unchanged. Atend-March 1995, theexchange
ratewasSK28.995 perUS$1 compared withSK31.277 perUS$1 atend-1994 andSK33.202 per
US$1 atend-1993. High inflation inSlovakia relative tothatinitskeytrading partners ledtoan
appreciation intherealeffective exchange rateofthekoruna ofsome 2.4percentduring theyear
ending December 1994.
(e) Balance ofPayments
15. Slovakia 'sexternal sector wastheprimary force behind thestrong GDP growth experienced
in1994 (Table 4).Slovakia experienced positive surpluses onmerchandise trade, services trade and
theoverall current account, andonthecapital account. Theoverall balance ofpayments in1994was
insurplus byUS$1430 million, compared toasurplus ofUS$360 million in1993 andadeficit of
US$540 million in1992.WT/BOP/W/5
Page8
Table 4
Slovak Republic: Balance ofpayments, 1992-4a
(US$ million)
1992 Prelim. 1993 Prelim. 1994 Prelim.
Current account 46 -601 712
Trade balance -715 -932 105
Exports, f.o.b. 6,515 5,447 6,727
Imports, f.o.b. 7,229 6,379 6,622
Services balance -1 270 657
Receipts 1,535 1,951 2,256
Transportation 414 460 538
Travel 200 390 568
Other 921 1,101 1,150
Expenditures 1,554 1,681 1,599
Transportation 263 292 161
Travel 165 216 283
Other 1,126 1,173 1,155
Income from abroad -35 -39 -120
Receipts 170 189 155
Expenditures 205 228 275
Current transfers 814 100 69
Private (net) 70 96 63
Official (net) 744 4 6
Capital account -85 980 446
Capital transfers (net) -- 529 87
Foreign investment (net) 100 -373b250
Other long-term capital (net) 251 562 659
Credits received, net 196 313 477
Credits extended, net 55 249 182
Short-term capital (net) -436 73 -195
Clearing account balance (surplus, -) -- 189 -609
Settlement under clearing account (payment, -) -- -- 255
Errors andomissions -500 -23 268
Overall Balance -539 356 1,426
Gross reserves (increase, -) -95 -521 -1,492
State Bank 5 -59 -1,173
Commercial banks -100 -462 -319
Fund credit, net 94 90 48
Short-term liabilities (decrease, -) 540 75 18
Financing gap -- -- --
a Including transactions withtheCzech Republic.
b Including US$529 million ofSlovak shares inCzech companies acquired through the"first wave" ofvoucher privatization in
theformer CSFR. Thecounterpart ispresented asacapital transfer.
Source: IMF.WT/BOP/W/5
Page9
16. Thecurrent account moved fromaUS$600 million deficit toasurplus ofUS$710 million in
1994. This turnaround ofUS$1310 million largely reflects anincrease ofUS$1280 million in
merchandise exports. Merchandise imports roseonlysomeUS$150 million andSlovakia 'smerchandise
tradesurplusequalledUS$100million.Thesurplusonservicesalsogrewin1994,withservicesreceipts
rising US$300 million while services expenditures fellbyUS$80 million. Slovakia continued tohave
adeficit onnetincome fromabroad, which in1994equalled US$120 million andcompares toadeficit
ofsome US$40 million in1993. Slovakia received nettransfers from abroad in1994 ofsome
US$70 million, adecrease ofUS$30 million from 1993.
17. Slovakia 'scapital account wasinsurplus in1994bysome US$450 million. Thedecrease from
thenearly US$980 million surplus in1993largely reflects theturnaround intheclearing account balance
withtheCzech Republic, which isthecounterpart tothesubstantial increase innetexports tothat
country.
ThePattern ofMerchandise Trade
18. TheCzech Republic remained Slovakia 'slargest trading partner in1994(Table 5),accounting
for37percentofSlovak exports and30percentofimports. More thanhalfofthe23.5percent
increase inmerchandise exports from1993wasintradewiththeEuropean Union, however. Exports
totheCzech Republic accounted forabout onesixthoftheincrease, while exports toHungary accounted
foronetenth oftheincrease.
Table 5
Slovak Republic: Geographic Composition ofMerchandise Trade, 1994
All
partnersAustria Czech
RepublicEuropean
Union -12Hungary Poland Russia Ukraine United
States
US$million Percent
Merchandise
exports, f.o.b.6,727 5.2 37.1 29.2 5.4 2.8 4.1 1.7 1.6
Merchandise
imports, f.o.b.6,600 5.8 29.6 26.2 1.7 2.4 17.8 1.8 2.9
Source: WTO Secretariat calculations based ondataprovided bytheMinistry ofEconomy oftheSlovak Republic.
19. Imports increased some 4percentin1994 from theirvalue in1993. Thelargest sources of
Slovak imports, along withtheCzech Republic, aretheEUandRussia. Despite littlegrowth inoverall
imports, imports fromtheEUincreased 33percent. Imports fromtheCzech Republic, incontrast,
fellby14percentin1994, while those from Russia fellby5percent.
20. Theproduct categories thatmake upthelargest shares ofimports include fuels, chemicals,
andnon-electrical machinery (Table 6).Product categories thatcomprise alarge share ofSlovakia 's
totalmerchandise exports include ironandsteel, chemicals, andother semi-manufactures. Substantial
increases inexports account inmost product categories in1994.WT/BOP/W/5
Page10
Table 6
Slovak Republic: trade bybroad product category, 1994
Product category Exports Imports
Total (US$ million) 6,710.0 6,580.6
Percent
Agricultural products 9.3 11.0
Food 5.7 8.8
Rawmaterials 3.5 2.2
Mining products 8.2 24.1
Oresandother minerals 1.4 2.8
Non-ferrous metals 2.1 1.9
Fuels 4.6 19.3
Manufactures 81.7 64.5
Ironandsteel 17.0 4.3
Chemicals 12.8 13.3
Other semi-manufactures 15.3 7.9
Textiles 4.9 2.8
Clothing 3.5 1.2
Machinery andtransport equipment 19.4 27.7
Power generating machinery 1.5 1.5
Other non-electrical machinery 5.7 10.5
Office machines andtelecommunications equipment 1.6 5.8
Electrical machinery andapparatus 3.3 4.2
Automotive products 4.5 4.1
Other transport equipment 3.0 1.6
Other consumer goods 8.9 7.3
Other 0.9 0.4
Note: SITC Rev.3 definitions usedforthebroad product categories.
Source: WTO Secretariat calculations based ondataprovided bytheMinistry ofEconomy oftheSlovak Republic.
(f) Foreign Exchange Reserves
21. Official reserves increased from US$0.4 billion attheendof1993 toUS$1.7 billion atthe
endof1994, largely asaresult ofthelargebalance ofpayments surplus. Theend-1994 reserves level
wasequal to2.4months 'imports ofgoods andservices orto3.1months 'imports ofgoods.
(g) Foreign Debt
22. Slovakia 'sexternal debtattheendof1994 wasequal toUS$3.9 billion, excluding disputed
interbank liabilities totheCzech Republic, andisequivalent tosome 31percentofGDP; thiswas
upfromUS$3.4 billion in1993. Debtservice wasequal to8.8percentoftotalexports, down slightly
from 8.9percentin1993.