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Oravec: Improvement of Entrepreneurial Environment Would Help Economy
Friday 05 March 2010 Zoom in | Print page
Bratislava, March 5 (TASR) - The economic contraction of 4.7 percent of GDP in 2009 wasn't as bad as expected thanks to government stimulation packages for the economies of Slovakia's most significant business partners, president of the Association of Slovak Entrepreneurs (ZPS) Jan Oravec told TASR on Friday.
"The revival of foreign demand occurred earlier (than expected), so the slump in GDP in Slovakia wasn't as sharp as expected," said Oravec. At the same time, he cautioned that Slovakia won't return quickly to record-breaking growth of 10 percent per year as was the case before the economic crisis.
"First, the global economy would have to grow at the same pace as before the crisis, which currently doesn't seem to be the case at all. The second condition, which can be influenced by Slovakia itself, is a more significant improvement in the entrepreneurial environment," said Oravec.
The ZPS head pointed out that foreign direct investment in Slovakia is made up for the most part of small and medium-sized firms, which don't receive government investment stimuli. The Government therefore should focus more on the quality of the entrepreneurial environment, which is still being inhibited by various barriers.
Companies residing in Slovakia are facing a decline in revenues in the wake of the economic slump, so it's important for them to be able to rely on help from banks that would, for example, prolong the periods for paying loans provided in the past, said Oravec. He noted that banks have been cautious, however. Several companies would be able to survive a temporary loss of revenues with the help of bridging loans, but banks are hesitant to provide them, so firms perish even though they shouldn't have to.
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