Regional disparities in wages are sizeable in Slovakia, with salaries in Prešov region lower by more than one-third than those in the Bratislava region. However, according to the latest analysis by the Slovak Central Bank, higher wages do not automatically translate into a higher purchasing power as Bratislava also sees higher prices in housing and services.
The analysis established that overall regional disparities equal 16 percent. This amounts to a drop of almost one-third from 23 percent in 2009, a development attributed mostly to the growth in wages in regions outside Bratislava over the past decade. Taxes and levies, however, serve as an equaliser of regional disparities to a certain extent. Central Banks analysts pointed out that in 2018 the net income in the Bratislava region stood at 74 percent of gross salary, whereas it was 77 percent in the Prešov region. "Therefore, the disparities between regions decrease to 15 percent or by one percentage point, after taxes," states the analysis.
However, the purchasing power differs between individual regions. "The main factor is higher prices of services in Bratislava region and significantly lower prices of similar services particularly in the Prešov and Banská Bystrica regions," explain the analysts. After taking the purchasing power into account, the regional disparities drop to 12 percent. Whereas other regions compared to 69 percent of Bratislava in gross wage, in overall purchasing power it was 75 percent.
Nonetheless, the Bratislava region still tops the list in both purchasing power and gross wages. After taking several other factors into account, the other regions switch places. For instance, whereas the Trnava region is the runner-up in gross income, its adjusted purchasing power puts it in sixth place and the second place is taken by the Trenčín region. Six regions - from Trnava to Banská Bystrica - rank quite close to each other in net wages purchasing power.
