measures taken\nduring the second wave of the pandemic.<\/li><\/ul>\n\n\n\nMost of the anti-pandemic\nmeasures taken in the first and second waves of the pandemic were of a\nnationwide nature. They have been adopted for industries where, by the nature\nof the business, people naturally come together. These are mainly in the\nsectors of accommodation, catering and other services, where we can include\neducation, health, social assistance, etc. The trade sector, especially retail\ntrade, has also been severely constrained. <\/p>\n\n\n\n
During the second wave of\nthe pandemic, the full-scale\nanti-pandemic measures<\/strong> adopted in the first wave of the pandemic were\ncomplemented and imposed to reduce the activity and\/or increase the costs of\nall businesses, regardless of their size or sectoral affiliation. The measures\ntaken during the second wave of the pandemic have again affected businesses\noperating in the other services<\/strong>\nsector. <\/p>\n\n\n\nIn order to compensate\nfor all the anti-pandemic measures that have caused a significant drop in revenues\nin several sectors, the State has introduced several forms of support. <\/p>\n\n\n\n
These included, for\nexample, measures to support employment and help entrepreneurs with income\nshortfalls, help with rent subsidies, deferral of payments (insurance premiums,\ntaxes, leasing, loans), and the introduction of pandemic inability to work and\ncaring for a family member for employees. In addition, some segments of the\neconomy have been supported through separate support schemes. <\/p>\n\n\n\n
All of the above are\nreflected in a decline in the GDP in 2020. The decline in the GDP in the first\nquarter of 2020 was 11% compared to the previous quarter. The Slovak economy\nrecorded its worst result in the second quarter of 2020. The economic recovery\noccurs as late as in the third quarter of 2020 as a result of the massive\neasing measures either in Slovakia (internal demand) or abroad. Looking at the\nfourth quarter of 2020, we see that the economy, despite the restrictive\nmeasures in place at the time, achieved moderate growth (0.10%).<\/p>\n\n\n\n
Among the selected key\nsectors, the decline in 2020 due to the impact of anti-pandemic measures can\nalso be seen in terms of industrial production. However, some reduction in\nperformance in the Slovak industry had already occurred before the coronavirus\ncrisis, in the second half of the previous year – 2019. Comparing the two waves\nof coronavirus and similar measures, it is clear that the Slovak industry\nexperienced a more challenging first wave. The second wave of the pandemic did\nnot have such a significant impact on industrial production. <\/p>\n\n\n\n
The decline in gross fixed capital formation was\nevident in the first quarter of 2020 – probably again due to the anti-pandemic\nmeasures that started to take effect in the last month of that quarter. Levels\nof gross fixed capital formation lagged behind the previous period throughout\n2020. The largest decrease (almost 15%) was recorded in the second quarter of\n2020 compared to the same period of the previous year.<\/p>\n\n\n\n
During the first wave of\nthe pandemic, we also recorded changes in other important macroeconomic\nindicators. According to the ECB, average inflation in the euro area will fell\nfrom 1.2% in 2019 to 0.3% in 2020. <\/p>\n\n\n\n
In Slovakia, the\ninflation rate fell from 2.4% to 1.8% between March and July 2020. <\/p>\n\n\n\n
The pandemic has had a significant\nimpact on employment. There was a decrease in the number of employed from\n2,552.3 to 2,504.5 thousand, a decrease of 1.8% of the employed population. The\nlargest declines in employment were recorded in the business services sector\n(down 14.4%, with the largest declines in administrative and support services)\nand other services (down 12.1%). The trade, accommodation and food services\n(4.2% each), manufacturing (4.1%) and agriculture (3.7%) sectors also recorded\nsignificant declines in the number of people employed. According to data from\nthe Statistical Office of the SR, the unemployment rate in Slovakia increased\nquarter-on-quarter from 6% (in Q1 2020) to 6.6% (in Q2 2020) during the first\nwave of the pandemic. <\/p>\n\n\n\n
Almost all analysed\nmacroeconomic and microeconomic indicators showed a negative development trend\n– gross output, value added, profit, the number of employees of non-financial\ncorporations as well as the number of established business entities recorded a\ndecline in aggregate value. Surprisingly, the number of defunct business\nentities declined.<\/p>\n\n\n\n
In our analysis, we found\nthat the biggest impact of the first wave was on large businesses in\nparticular, with small and medium-sized enterprises even seeing their profits\nrise in the second quarter of 2020.<\/p>\n\n\n\n
Looking at the sectoral\nchanges during the first wave of the pandemic, it is evident from the analysed\nindicators that only the trade sector saw an increase in the values of all\nanalysed indicators except for the number of business entities newly\nestablished during the second quarter of 2020 (compared to the first quarter). <\/p>\n\n\n\n
The third quarter of 2020\nmarked a slight recovery for businesses in Slovakia. Apart from the\nunemployment rate, which also increased during July\u2013September 2020 (from 6.6%\nto 7.2%), the values in the other indicators developed positively. The GDP\nincreased year-on-year, reaching 99.6% of the previous year’s GDP, while the\nvalue of all key GDP components also increased. Inflation increased from 0.9%\nto 1.5% and the number of people employed in the Slovak economy increased by a\ntotal of 24.9 thousand. <\/p>\n\n\n\n
Broken down by sector,\ngrowth in the value of the gross output, value added and profit indicator was\nrecorded in all sectors except business services during the third quarter of 2020.\nThese recorded a decrease in value during the months July\u2013September 2020 in all\nanalysed indicators. The number of employees in enterprises by sector\nclassification developed differently. <\/p>\n\n\n\n
The second wave of the\npandemic, which started to spread massively in Slovakia at the beginning of\nSeptember 2020, did not have such a significant impact on the corporate economy\nas the first wave; it mainly affected selected sectors of the economy (such as\nthe aforementioned restaurants, transport, retail, etc.). The decline in\nmacroeconomic indicators was not so dramatic, mainly because there was no\nmassive decline in industry and industrial production. <\/p>\n\n\n\n
Despite the onset of the\nsecond wave of the COVID-19 disease, Slovakia’s GDP by the end of 2020 was\nabove the level of 2019 and the first quarter of 2021 was 0.8 p.p. higher than\nthe GDP produced in the previous year. With the exception of household final\nconsumption, which recorded a slight decline in both late 2020 and early 2021,\nthe other components of GDP recorded increases in each quarter. Inflation also\nstabilised at 1.6% by the end of 2020, falling briefly to 0.7% in January 2021,\nbut rising through the first half of 2021 to reach 2% in May. Employment in\nSlovakia grew by 0.4% in the last quarter compared to the previous quarter and\nthere was a slight decline in employment of 1.5% at the beginning of 2021. The\nlargest decline in the number of employees in the Slovak economy at the end of\n2020 and in the first quarter of 2021 was recorded in the accommodation and\ncatering sector, where, after a slight increase in the number of employees in\nQ3 2020, the number of employees fell by 6.1% and even by 21% at the beginning\nof 2021. In the other services sector, the most significant quarter-on-quarter\ndecline was recorded in arts, entertainment and recreation, where the number of\nemployees decreased by 2.4% in Q4 and even by 15.6% in Q1 2021. The number of employees in administrative and\nsupport services fell by 2.1% quarter-on-quarter at the end of 2020, and the\nquarter-on-quarter decline increased further to 7.3% at the beginning of the\nyear. Among the other sectors, the transport sector recorded a negative\ndevelopment of employment (a quarter-on-quarter decline of 2.4% in Q4 and\n3.2% in Q1 2021) and the industry sector, where the number of employees fell by\n2.7% only in Q1 2021 compared to the previous quarter. The unemployment rate\nstood at 7% in October\u2013December 2020 and remained at this level in early 2021.<\/p>\n\n\n\n
Despite the second wave\nof the pandemic, indicators assessing the state of the corporate economy\ndeveloped mostly favourably in the second half of 2020. Micro enterprises\nrecorded quarter-on-quarter growth in gross output, value added, the number of\nemployees and the number of business entities created in the fourth quarter,\nbut their profits declined. For small enterprises, there was a\nquarter-on-quarter decline in all assessed indicators except gross output,\nwhich increased quarter-on-quarter. The evolution of the indicators of\nmedium-sized and large enterprises followed a similar pattern. Both\nmedium-sized and large enterprises were accompanied by a quarter-on-quarter\nincrease in gross output, value added, but a decline in profits. Only the\nheadcount indicator showed a different trend – while large enterprises employed\nmore in the fourth quarter than in the third quarter, small enterprises\nemployed fewer.<\/p>\n\n\n\n
As the results of the\nanalysis showed, the first wave of the pandemic had the most pronounced impact\non industrial, accommodation and catering, transport and other services\nbusinesses. Large industrial enterprises have been more affected. <\/p>\n\n\n\n
Micro and small enterprises\nhave been much slower to recover from the effects of the first wave of the\npandemic. With the easing of the measures, the economic situation of business\nentities improved and already in the third quarter of 2020 there was a\nsignificant increase in gross output, value added and profits, but the number\nof employees continued to decline slowly. The arrival of the second wave of the\npandemic has again contributed to the deterioration of economic performance. <\/p>\n\n\n\n
The effects of the second\nwave have been felt mainly in the sectors that have faced restrictions most and\nless so in industry. Accommodation, catering, transport and other services\nremain the hardest hit sectors. <\/p>\n","protected":false},"excerpt":{"rendered":"
The first case of coronavirus in Slovakia was recorded on 6 March 2020. It was concerns about the potential growth of cases and overburdening of the healthcare system in Slovakia that led to the introduction of a series of large-scale anti-pandemic measures throughout most of 2020. Based on the time of adoption, the anti-pandemic measures […]<\/p>\n","protected":false},"author":2,"featured_media":3860,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"tdm_status":"","tdm_grid_status":"","cybocfi_hide_featured_image":"","footnotes":""},"categories":[39],"tags":[],"class_list":{"0":"post-5866","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-news"},"yoast_head":"\n
Adverse impact of the coronavirus pandemic on the Slovak corporate economy - Monitoring MSP<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/monitoringmsp.sk\/en\/2021\/07\/28\/adverse-impact-of-the-coronavirus-pandemic-on-the-slovak-corporate-economy\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Adverse impact of the coronavirus pandemic on the Slovak corporate economy - Monitoring MSP\" \/>\n<meta property=\"og:description\" content=\"The first case of coronavirus in Slovakia was recorded on 6 March 2020. It was concerns about the potential growth of cases and overburdening of the healthcare system in Slovakia that led to the introduction of a series of large-scale anti-pandemic measures throughout most of 2020. 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