Slovakia has produced an average of six percent GDP growth over the past five years, according to the International Monetary Fund. Quite impressive. A recent change of government to a populist coalition does shed some doubt on continued prosperity.

Slovakia’s incredible story begins with the no-nonsense reforms introduced by Mikulás Dzurinda in the late 1990’s.  He first took power in 1998 and transformed Slovakia’s political and economic fortunes, turning it from a central European under-performer into a well-respected member of NATO and the EU, with one of the fastest-growing, most liberal economies in the region.

The list of acclaim is long indeed; in 2004, the World Bank described Slovakia as one of the best countries in which to do business, citing reforms such as the flat, 19% tax rate and streamlined procedures to establish new businesses that have been copied by other countries, while the respected Economist Intelligence Unit placed it above the Czech Republic, Slovenia, Hungary and Poland.

Now the fractured, unfocused Smer Coalition worries observers. Experts emphasise that Dzurinda lost because his neo-liberalism failed to strike a chord with rural voters and the unemployed (some 13.5% of the population, down from 18% in 2001 but still the second-highest in the EU after Poland). The other reason was Dzurinda’s revolutionary pension reforms, which older retirees felt complex.

For the business community, the good news is that the latest government hasn’t tried to throw out much needed reforms, maintaining its predecessor’s aim of joining the euro in January 2009.

As recently as 2007, Slovakia was growing at a rate of 6.5%.  Real estate, construction and anything associated with the car industry are all major growth areas; tourism (particularly spa tourism) and high-technology micro-industry are also seeing major investment from within Slovakia and abroad.