BRATISLAVA, November 3, (WEBNOVINY) — The business environment in Slovakia has slightly improved in the third quarter of this year, according to a report published by the Slovak Business Alliance (PAS). The current value of the Business Environment Index (IPP), which PAS calculates on the basis of its own survey, is 91.9 points, which is 0.39 percent more than in the previous quarter. “Perceived slight improvement in the business environment reflects cautious optimism of businessmen, which mostly results from their predominantly positive perception of the government’s program statement and some of the measures it has introduced to date. This is the first, although a very minor, increase in the index after a period of a downward trend,“ states analyst with PAS Matej Tunega.
The surveyed businessmen assigned the biggest increase to items “government’s economic policy” and “information accessibility”, which improved 2.75 percent and reached the value of 84.1 points. “Businessmen welcome announced austerities, which should lead to stabilization of public finances and economic recovery,” states the alliance. PAS underscores that some businessmen believe that the government should be braver in preparation of austerities and cuts should be more substantial. Increasing access to information, which is mostly a result of obligatory publishing of contracts with state’s participation, is also perceived positively.
The second biggest increase compared with the second quarter of the year was registered in the item “functionality of the political system in the state”. Evaluation of this item increased 2.42 percent to the present value of 23.2 points. “This evaluation is mainly connected with increase in openness of the government and expectations that businessmen have towards the new government,” stated PAS. The item “quality and accessibility of production inputs and labor force” with 114.2 points accounts for the third biggest increase. Alliance informed that this item swelled as a result of ongoing higher unemployment, which secures supply of available qualified labor force on the market.
On the contrary, businessmen considered the legislation regulating payroll taxes to be the most negative item. This item dropped 2.65 percent to 96.8 points. PAS explained that businessmen were puzzled by the government’s proposal for extending the assessment base without compensation in form of lower rates. They point out that final increase in payroll taxes can slightly endanger employment and slow down development in companies or inflow of foreign investments. “Moreover, the presented proposal does not secure systemic elimination of existing deformations in the system of contribution to [social and health insurance] funds,” adds PAS. The second biggest decrease amounting to 2.12 percent was registered in the item “reliability, and financial discipline or business partners” with present 83.7 points.
Businessmen assigned the third biggest fall to the item “comprehensibility, applicability and stability of legislation”. This area, which is criticized in the long term, fell 1.97 percent to 37.1 points. Businessmen mostly criticize presentation and frequent changes in government proposals, when the intended change is presented first and then denied shortly and then a new proposal, often diametrically different from the original one, is tabled. “Increased unity and unambiguousness in the process of publication of prepared measures so that businessmen are able to plan their present and future activities better with regard to planned changes in legislation would be a great asset, states PAS. The items “law enforcement and corruption” continued its downward trend but the decrease has significantly slowed down.
The base period for calculation of the Business Environment Index was July 1, 2001 with the index reference level of 100 points. Respondents assessed changes in the business environment for the first quarter of 2001 for the first time. PAS currently publishes the 37th value of the index, which reflects its changes in the third quarter of 2010. Businesses associated in the alliance report annual sales of about EUR 16.9 billion and employ about 64,000 people.
SITA
