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Euro Boost for Slovakia

Slovakia is coming up trumps in terms of property investment and the country's potential for a full set of aces grows more likely every day as its economy improves in leaps and bounds under the watchful eye of Prime Minister, Robert Fico. In July, Slovakia became only the second former communist country after Slovenia to be approved for transition to the euro currency in 2009.

Slovakia's Finance Minister, Jan Pociatek, is enthusiastic about the benefits of euro adoption. "Euro entry will be beneficial for our economy," he said. "it will attract more foreign direct investment." He also believes that Slovakia's use of the single currency will add one percentage point to its already booming economic growth. James Gonzalez, Market Analyst at Obelisk, says, "Becoming a member of the eurozone will certainly add to Slovakia's investment potential and will allow investors to make the most of the advantages the euro offers while also investing in one of Eastern Europe's brightest economies."

Investors who have been keeping a close eye on Slovakia believe that its entry into Europe's most exclusive club is well-deserved. Emerging with blinking eyes from the economic wasteland of communist control in 1993, Slovakia has gone from strength to strength in recent years, sprinting past its Central and Eastern European neighbours to become one of the fastest growing economies in the region. Several major international companies, including high-tech and car companies, have invested in Slovakia, bringing further prosperity to the country and more purchasing power to its citizens.

Slovakia's GDP growth rate in 2007 was an impressive 10.4%, a massive increase on the 6% it had achieved annually between 2002 and 2006. The first quarter of 2008 was even better, when Slovakia came out top of the eurozone countries with GDP growth of 8.7%. Slovakia is now the fastest growing economy within the EU and OECD, and unemployment rates were down to 7.8% in Feb 2008, a vast improvement on the 16.5% at the beginning of 2004.

Slovakia's rapid economic growth is the main factor affecting rising house prices. Property prices throughout the country, and particularly in the capital, Bratislava, have skyrocketed since 2002 with the National Bank of Slovakia recording price rises of 21.3% year-on-year since 2002. Rising house prices are just one of the attractions of investing in Slovakia. Others include low tax on rental income, a flat rate of income tax and high rental yields in Bratislava.

"Joining the euro brings many benefits, none more so than the confidence international investors will have in the region; this in turn means higher growth. And without doubt it is excellent news for the country's property market, as the surge in property prices showed when Slovakia joined the EU in 2004", comments Ken Thorkildsen, Director of Obelisk Private Finance. Now that Slovakia is about the join the euro, it is shaping up to become one of the best investment environments in Europe.

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