Slovenian Economic Mirror J IMAD Economic Analyses/August-September 2007 No. 8-9, Vol. XIII Slovenian Economic Mirror presents current macroeconomic developments as well as selected economic, social and environmental issues. The publication consists of articles, which present the main economic indicators, assess the realisation of the spring and autumn forecasts, and monitor implementation of economic policies (earnings, public finance, prices, competitiveness, etc.). The periodical is published monthly, except in September. This issue of Slovenian Economic Mirror was prepared by: Lejla Fajić, Marijana Bednaš (Current Economic Trends and Autumn Forecasts for 2007-2009), Jure Brložnik (International Environment), Slavica Jurančič (Competitiveness), Jože Markič (Balance of Payments), Metka Stare (Trade in Services), Miha Trošt (Price Trends & Policy), Marjan Hafner (Money Market - Household Savings, Money Market - Loans), Tomaž Kraigher (Labour Market), Saša Kovačič (Earnings), Katarina Ivas (Manufacturing), Janez Kušar (Construction), Barbara Ferk (Indicators of Private Consumption and Household Indebtedness), Mojca Koprivnikar Šušteršič (Distributive Trade, Tourism), Janja Pečar (Regional Unemployment), Luka Žakelj (Slovenian Enterprises in 2006). Acting Director: Boštjan Vasle. Editor in Chief: Luka Žakelj. Translator: Tina Potrato. Language Editor: Dean DeVos. Technical Editor: Ema Bertina Kopitar. Statistical Appendix, Data Preparation & Graphs: Bibijana Cirman Naglič, Marjeta Žigman. Distribution: Katja Ferfolja. Printed by: Tiskarna Štrok. Concept & Design: Sandi Radovan, Studio DVA. Circulation: 610 copies. Institute of Macroeconomic Analysis and Development Gregorčičeva 27, 1000 Ljubljana (+386 1) 478 10 12 fax: 478 10 70 Editor in chief: luka.zakeli@gov.si Translator: tina.potrato@gov.si Distribution: publicistika.umar@gov.si SEM can be found on the Internet at http://www.gov.si/umar/ Publication is included in Ebsco Publishing Database and Internet Securities Database. © Institute of Macroeconomic Analysis and Development, 2007. The contents of this publication may be reproduced in whole or in part provided that the source is acknowledged. Contents Slovenian Economic Mirror IMAD No. 8-9/2007 p. 2 Current Economic Trends and Autumn Forecasts for 20072009 The 5.8% GDP growth projected for 2007 to moderate to 4.6% in 2008; inflation also expected to ease off p. 3 International Environment Financial crisis in the USA increases the uncertainty of future economic trends p. 4 Competitiveness Improvement in manufacturing's cost competitiveness underpinned by strong growth of labour productivity p. 5 Balance of Payments Higher current account deficit based on growing deficits in the trade balance and factor incomes p. 6 Trade in Services Exceptional growth of the predominantly knowledge-based group of services p. 7 Price Trends & Policy Long-term inflation indicators rose in the summer p. 8 Money Market -Household Savings Household savings in banks and mutual funds continue to increase p. 9 Money Market - Loans Year-on-year growth of loans to domestic non-banking sectors exceeded 30% p. 10 Labour Market Favourable trends in the labour market continue despite seasonal impacts p. 11 Earnings Nominal growth of gross wages largely caused by the wage rise in the public sector p. 12 Manufacturing In the second quarter particularly technologically advanced industries retained the high growth rates from the first quarter p. 13 Construction First signs of softening in construction activity in June and July p. 14 Indicators of Private Consumption and Household Indebtedness Short-term consumption indicators suggest slightly higher private consumption this year p. 15 Distributive Trades The growth of value added remained strong in the second quarter p. 16 Tourism High growth rates of overnight stays from the second quarter did not continue in the summer season p. 17 SELECTED TOPICS Regional Unemployment Regional disparities widened despite the decrease in unemployment; structural unemployment remains a problem p. 21 Slovenian Enterprises in 2006 Entrepreneurial activity rose further in 2006; construction and business services stand out in expansion pp. 22, 23 Data: (pp. A 1-A 12), Main indicators (p. A 13), International Comparisons (pp. A 14-15), Graphs (pp. A 16-17). Selected indicators of current economic Latest Compared to the previous month same period of previous year developments, change in % Data latest data pre-latest data pre-pre latest data Industrial production (value based) VII -0.7 8.5 8.4 8.9 Manufacturing VII -0.4 9.9 9.8 10.2 Electricity, gas and water supply VII 9.8 -10.8 -11.3 -10.1 Value of construction put in place, real terms VII -0.4 30.2 33.1 38.7 Exports of goods (nominal terms)1 VII 2.0 18.2 18.0 18.7 Imports of goods (nominal terms)1 VII 1.7 19.7 19.9 20.9 Real effective exchange rate2 VII 0.1 1.7 1.6 1.5 Gross wage per employee, real terms VII 0.7 2.8 2.7 3.0 Total household savings in banks3, nominal terms VII 1.2 11.0 9.8 9.3 General government revenue, real terms VIII 5.3 3.1 2.2 2.1 Number of persons in paid employment VII -0.2 3.4 3.4 3.4 Number of registered unemployed VIII -2.3 -18.0 -18.1 -18.1 Number of job vacancies VIII 4.8 6.5 4.8 4.6 Month current previous pre-previous Registered unemployment rate | VII 7.6 7.5 7.7 Month current cumulative annual4 Consumer prices IX 0.4 3.6 3.5 Producer prices (domestic market) VIII 0.1 4.0 5.3 Sources of data: SORS, BS, ESS, estimates and calculations by IMAD. Notes: 1balance of payments' statistics; 2euro's exchange rate for Slovenia measured by relative consumer prices; the calculation of the effective exchange rate includes the currencies/prices of Slovenia's 17 trading partners (Austria, Belgium, Germany, Italy, France, Netherlands, Spain, Denmark, United Kingdom, Sweden, Czech Republic, Hungary, Poland, Slovakia, USA, Switzerland, Japan); weights are the shares of individual trading partners in Slovenian exports and imports of goods within manufacturing (5-8 SITC) in 2001-2003; exports are double weighted; 3the year-on-year growth rate is defined as the ratio between the stock at the end of the current month and the stock in the same month of the previous year; 4total in the last 12 months. Current Economic Trends and Autumn Forecasts for 2007-2009 Slovenian Economic Mirror IMAD No. 8-9/2007 p. 3 Based on developments in the first half of 2007 and the favourable business expectations until the end of the year, GDP growth is projected to total 5.8% this year. GDP rose by 6.5% in the first half of 2007, considerably exceeding last year's average (5.7% according to revised data). The strong real increases in exports (13.9%) and gross fixed capital formation (21.6%) were the main factors of economic growth. Propelled by the robust motorway construction and the high level of non-residential building, investment in buildings and constructions recorded the largest increase in the six months to June (26.5% in real terms). Supported by the strong international environment, investment in machinery and equipment also rose substantially (17%). Slovenia has recorded high real growth of exports for the fourth year since joining the EU. Within that, exports of services have been rising more rapidly this year than exports of goods. In addition, the structure of services has seen a shift in favour of other services (notably merchanting, financial services, construction, and various business, professional, and technical services), which have, along with travel services, exceeded the share of transport services in total services exports this year (see pp. 67). The production and exports of road vehicles that began to gain momentum in the second quarter (see p.13) will only partially offset the expected slight softening in the international environment in the second half of the year. Exports of goods and services are projected to grow by a real 13.4% in 2007. The forecast of the real growth of gross fixed capital formation totals 14.5%, projecting a deceleration in the second half of the year, mainly due to the slowdown in construction investment that is already showing in some current data (see p. 14). According to preliminary estimates, the real growth of private consumption has remained moderate this year; current indicators suggest a slight acceleration in comparison with 2006 from 4% to 4.2% (see p. 15) underpinned by the favourable trends in the labour market and partly by the effect of the smaller tax burden on the growth of net wages. Along with the stronger growth of domestic consumption and exports, imports will also record buoyant real growth this year (14.3 %). GDP growth will moderate to 4.6% in 2008 and to 4.1% in 2009. The lower real GDP growth in comparison with 2007 will partly reflect the expected easing in the growth of export demand (to 10.3%) and partly the more subdued growth rate of gross fixed capital formation (6.2%). The volume of infrastructural investment will continue to increase, chiefly in motorway construction, as will the volume of investment in residential construction and in machinery and equipment. Investment activity will thus expand further and add substantially to GDP growth. However, given the already achieved high levels, we cannot expect an increase on a par with this year's in 2008. The growth of private consumption will remain at a similar level as in 2007 (4%); while it has been mainly driven by employment growth and the positive effects of tax legislation changes this year, its expansion in 2008 will be mainly underpinned by stronger wage growth. The cyclical moderation of GDP growth to a projected 4.1% in 2009 will largely reflect the further slowdown in the growth of gross fixed capital formation (2.6%) due to the planned completion of motorway construction, although investment in railway infrastructure is expected to gain more weight. Given the softening in the growth of disposable income resulting from the projected slowdown in wages and employment, private consumption growth will return to a level close to its long-term average (3.4%) in 2009. This year's economic boom has had a favourable effect on developments in the labour market, where employment has been burgeoning, while unemployment indicators have dipped to historically low levels. Roughly a quarter of this year's surge in formal employment is attributable to the vigorous construction activity, where the increased demand for labour has been partly met by hiring foreign workers. Employment in business services and in the metal and car industries also rose substantially. Although annual employment growth is projected to be slightly below (2.3%) the mid-year figure, it will still considerably exceed the spring forecast. In the next two years it will gradually moderate to 0.9% and 0.6%. By June, the registered unemployment rate fell to its lowest level (7.5%) since April 1991, while survey unemployment plunged to its historical low in the second quarter of 2007 (4.6%; see p. 11). Both rates are projected to continue to decline in the next two years (on a yearly level registered unemployment to a respective 7.4% and 7.1%, survey unemployment to 4.9% and 4.8%). Despite the favourable general trends, several structural problems persist in the labour market (see p. 21). Wage growth will lag behind productivity growth throughout the forecast period. In the seven months to July, the gross wage per employee rose by a nominal 5.7% (see p. 12), while the forecast for the year as a whole projects a 5.9% rise. These figures reflect the somewhat faster wage growth in the private sector than projected in the spring forecast, largely linked to this year's favourable economic trends and partly to the higher payments in March, when companies estimated their performance in 2006. The slower wage growth projected in the public sector is attributable to the delay in the expected disbursement of wages according to the new wage system and the elimination of wage disparities in the public sector, which will translate into accelerated wage growth in this sector in 2008 and 2009. Nevertheless, the overall wage growth in these two years (7.3% and 5.7% in nominal terms) will not exceed productivity growth (7.4% and 6.4% in nominal terms). Inflation will ease off in the next two years after this year's rise. The relatively faster price growth in Slovenia in comparison with the euro area average observed over the last few years is largely attributable to the effects of the process of real convergence in the Slovenian economy. A comparison of price trends in the first eight months of 2007 with the previous two years shows that the changes (i.e. rises and falls) in most price groups were similar to those in the same period of the previous two years. The exceptions were the high rises in the prices of food and of recreation and culture. The rises in the latter group are largely caused by the prices of holidays (see p. 8). The autumn forecast of annual inflation for 2007 thus totals 4.3%, while average inflation is projected to reach 3.4%. In line with the forecasts of international institutions projecting a slowdown in global food price rises, domestic food price rises are expected to moderate next year. In order to prevent the higher price rises in some groups from spilling over to other prices and to curb inflationary expectations, it is also vital that macroeconomic policies provide a stable macroeconomic framework that will ensure the adjustment of relative prices rather than result in an overall increase in inflation. This will allow inflation to return to its equilibrium level between 2.5% and 3% already next year. The 0.4% September inflation stems from higher prices of clothing and footwear, food, and hotels and restaurants. The forecasts predicting further food price rises in the autumn months have partly materialised, and the contribution of food prices to inflation has thus climbed to 1.5 p.p., accounting for over 40% of this year's overall price increase. As in previous years, new collections pushed up the prices of clothing and footwear. In line with expectations, the prices of package holidays fell sharply in September. International Environment Slovenian Economic Mirror IMAD No. 8-9/2007 p. 4 The August outburst of a financial crisis in the USA significantly raised uncertainty regarding future economic developments. The sudden deterioration in lending terms coupled with the prolonged recession in the housing market presents a serious risk not only to economic growth in the USA, but also elsewhere around the world, Europe included. The intensity of the spillover of negative effects from the USA will depend on whether the USA will experience a so-called 'soft' (GDP growth below 2.5%) or 'hard landing' (GDP growth below 1.0%). Given that housing investment has contributed negatively to GDP growth since early 2006, the key factor in this scenario will be the growth of private consumption, which has been the main engine of US economic growth in recent years. The Federal Reserve responded to the financial crisis and the consequent deterioration in lending terms and confidence by lowering its key interest rate. This was the first change since June 2006; the rate was cut by 0.5 p.p. to 4.75%. This move was enabled by the moderation of US inflation over the last few months. Year-on-year inflation totalled just 2.0% in August. However, with the recent rebound in oil prices to record highs and in view of the moral hazard, the FED may decide not to cut the interest rate any further, unlike how it acted during the financial crises in 1998 and 2001. Since the euro area's key interest rate remained unchanged in September (at 4.0%), the difference between the two now totals a mere 0.75 p.p. Coupled with the deteriorated GDP growth prospects in the USA, this is one of the main reasons for the dollar being at an all time low in comparison with the euro (see graph). The recession in the US housing market is still deepening amid the falling real estate prices. The drop in housing investment reduced the overall GDP growth by 0.9 p.p. in the first quarter and by 0.6 p.p. in the second quarter (annualised q-o-q). The first eight months of the year saw a continued decline in the three main indicators of future trends (sale of new homes, building permits, housing starts), suggesting that housing investment will continue to make a negative contribution to GDP growth for several quarters to come. Property prices also began to fall this year; a year-on-year decline has been observed since the beginning of the year. Further drops in real estate prices are quite probable given that the stock of unsold homes is the highest since the last housing recession in 1991 and in view of the fact that foreclosures will rise substantially after the collapse of the subprime mortgage market, which will add to the stock of unsold homes. As a consequence, this will negatively affect the growth of private consumption due to falling home equity withdrawals. Private consumption already softened appreciably in the second quarter of 2007. After the 3.1% increase in 2006, it grew by 3.7% in the first quarter this year and by a mere 1.4% in the second quarter (annualised q-o-q). Although the consequences of the US recession are already visible in various sentiment indicators, it is still premature to draw any final conclusions. While confidence indicators in Europe began to slip from record-high levels in the second quarter when economic growth in the euro area eased off slightly, the effect of the financial crisis has become evident in the last two months. The German Ifo index of business climate fell for the fourth month in a row in September, to its lowest level in 18 months. The ZEW index of German investors' sentiment has also been slipping for four months. In September, the confidence of German consumers dropped as well. The decline in the propensity to buy is particularly critical since it may jeopardise the recovery of private consumption growth in Germany. September also saw the expectations in French manufacturing drop to their lowest level since March, while the business climate in Italy hit a two-year low. The strong euro threatens the already uncompetitive French and Italian exports, while the deterioration in lending terms will affect investment decisions in the entire euro area. However, it is still premature to make any final conclusions about the actual effect of the US financial crisis and its implications for economic growth in the euro area. Graph: Changes in the ECB's and the FED's key interest rates and movements of the USD/EUR exchange rate - - - - ECB »J \ o FED y \ # ■ ■ |i\ » * A » or +> * ^r * » JT / 1,45 1,35 1,25 1,15 1,05 0,95 0,85 £ - Ö 3 £ - ö ■ Sources of data: ECB, FED. 7 6 5 0,75 Competitiveness Slovenian Economic Mirror IMAD No. 8-9/2007 p. 5 Price competitiveness indicators, average indices 2006 QII 2007/ QI 2007 QII 2007/ QII 2006 QI-II 2007/ QI-II 2006 Effective exchange rate against 17 trading partners1 Nominal 100.2 100.4 100.7 100.8 Real exchange rate - based on consumer prices 100.7 102.0 101.8 101.6 Real exchange rate - based on producer prices2 99.1 99.8 101.9 102.0 Effective exchange rate against 10 trading partners outside the euro area Nominal 100.6 101.4 102.4 102.7 Real exchange rate - based on consumer prices 100.8 102.7 103.1 103.1 Real exchange rate - based on producer prices2 1 00.1 100.5 103.9 104.3 Effective exchange rate against 7 trading partners in the euro area1 Real exchange rate - based on consumer prices 1 00.6 101.7 101.3 101.0 Real exchange rate - based on producer prices2 98.8 99.5 101.1 101.1 Sources of data: SORS, BS, ECB, OECD Main Economic Indicators; calculations by IMAD. Notes: 1against the basket of currencies of 17 trading partners (Austria, Belgium, Germany, Italy, France, Netherlands, Spain (7 euro area trading partners), Denmark, United Kingdom, Sweden, Czech Republic, Hungary, Poland, Slovakia, USA, Switzerland, and Japan (10 trading partners outside the euro area); an increase indicates appreciation _and vice versa; 2deflated by manufacturing producer prices in the domestic market._ Slovenia's price competitiveness measured by relative consumer prices deteriorated in the second quarter of 2007. The decline largely reflected the faster growth of Slovenian consumer prices compared with their rises in its main trading partners. In the second quarter, relative prices rose by 1.6% (after a 0.5% decrease in the first quarter) at the quarterly level and by 1.1% at the year-on-year level (0.5% in the first quarter). The negative effect of the further appreciation of the euro against the US dollar, Japanese yen, and Swiss franc on Slovenian price competitiveness was relatively smaller due to the concurrent depreciation of the euro against the currencies of some EU countries outside the EMU. In the second quarter, the contribution of the effective exchange rate's nominal appreciation to its real quarterly growth (2.0%) totalled about 25%; the remaining 75% stemmed from the relative price rise. Nominal appreciation contributed a good third of the year-on-year real growth (1.8%), while the relative price rise added two thirds. Measured by relative producer prices, Slovenia's price competitiveness improved in the second quarter at the quarterly level, while its deterioration at the year-on-year level eased off slightly. At the quarterly level, Slovenian producer prices fell in comparison with foreign prices (by 0.6%, after their 0.8% increase in the first quarter), while their year-on-year growth remained at the level from the first quarter (1.2%). The Slovenian effective exchange rate of the euro was therefore a real 0.2% lower in the second quarter than in the first quarter and 1.9% higher than in the second quarter of 2006. Due to the accelerated growth of consumer prices, Slovenia was among the euro area countries that recorded a substantial deterioration in price competitiveness in the second quarter. Due to the appreciation of the euro, all euro area countries recorded a decline in price competitiveness in the first half of 2007. According to the European Commission (EC), Slovenia's price competitiveness saw the biggest drop between the first and the second quarter. Year-on-year cross-country comparisons show Slovenia in a slightly more favourable light: in the second quarter, it was ranked at the bottom of the top third; in the first and second quarters together, it was ranked in the middle (see graph). Contrary to the economy as a whole, Slovenian manufacturing improved its year-on-year cost competitiveness in the first half of 2007 owing to strong labour productivity growth. Among the EMU countries, the German, Finnish, and Dutch industries also recorded similar improvements. Meanwhile, the cost competitiveness of the economy as a whole deteriorated in Slovenia and other EMU members alike, except in Germany and Finland (EC data; see graph). Graph: The euro's real effective exchange rates* deflated by CPI, unit labour costs (economy), and unit wage costs (manufacturing) in the first half of 2007 □ CPI □ Unit labour costs, economy □ Unit wage costs, manufacturé g _ d 1 — É ■-I-I —i H n i _ _ m E "ä (D Source of data: European Commission. Notes: *against 36 industrial countries: EU-27, Australia, USA, Japan, Norway, New Zealand, Mexico, Switzerland, and Turkey; **the figure on unit wage costs in manufacturing is not available. Balance of Payments Slovenian Economic Mirror IMAD No. 8-9/2007 p. 6 Balance of Payments, I-VII 2007, EUR m Inflows Outflows Balance1 Balance, I-VII 2006 Current account 15,017.2 15,418.2 -401.0 -251.3 Trade balance (FOB) 11,552.8 12,172.1 -619.3 -399.5 Services 2,407.0 1,673.7 733.3 481.7 Factor services 577.5 935.9 -358.4 -218.8 Unrequited transfers 480.0 636.5 -156.6 -114.7 Capital and financial account 7,792.0 -6,195.4 1,596.7 416.2 Capital account 147.6 -137.0 10.7 -0.3 Capital transfers 147.6 -136.1 11.5 0.7 Non-produced, non-financial assets 0.0 -0.9 -0.9 -1.0 Financial account 7,644.4 -6,058.4 1,586.1 416.5 Direct investment 464.1 -680.2 -216.1 -43.4 Portfolio investment 1,105.9 -2,697.1 -1,591.2 -506.7 Financial derivatives 0.0 -6.4 -6.4 -17.5 Other lonq-term capital investment 5,898.8 -2,674.7 3,224.1 371.5 Assets 23.8 -2,658.4 -2,634.6 -1,251.2 Liabilities 5,875.0 -16.3 5,858.7 1,622.6 International reserves (BS) 175.6 0.0 175.6 612.6 Statistical error 0.0 -1,195.7 -1,195.7 -164.9 Source of data: BS. Note: minus sign (-) in the balance indicates the surplus of imports over exports in the current account and the rise in assets in the capital and financial account and the central bank's international reserves. The higher current account deficit recorded in the first seven months of the year was mainly the result of the growing deficits in the trade balance and in factor incomes. The widening of the trade balance deficit is mainly attributable to the smaller surplus in goods trade with non-EU countries (from EUR 919.7 m to EUR 734.5 m) and partly to the higher deficit in trade with EU countries (from EUR 1,319.1 m to EUR 1,353.8 m). The deficit in factor incomes widened due to the banking sector's net paid interest on external debt and the net expenditure from direct investment. The nominal growth of goods imports (18.7%) was somewhat faster than that of exports (17.8%) in the seven months to July, year on year. Based on available mid-year data, imports of intermediate goods saw the biggest rise on the back of the robust growth of industrial production. Looking at the SITC structure, the year-on-year increase in imports was largely based on imports of road vehicles, iron and steel, electrical machinery and appliances, non-ferrous metals, metal products, and metal ores. The available mid-year data on goods exports by SITC expressed in current EUR show robust growth of the exports of vehicles (23.8%) as well as an increase in the exports of all other goods (16.4%). The year-on-year increase in exports in this period was chiefly underpinned by exports of road vehicles, iron and steel, metal products, wood and cork, and feeding stuff for animals. The surplus in the services balance increased in the first seven months, year on year, mainly as a result of smaller net imports of other services and higher net receipts from tourism (see p. 7). We note, however, that an analysis of service flows in 2007 is considerably hampered because the estimate of transport and other services is still based on payment transactions data. The only exception is travel services, which began to be recorded according to the new methodology (based on the SORS' target surveys) in July. The BS has revised data for 2006. The value of exports in the current period was raised by coefficients based on last year's structure of payments above or below the EUR 12,500 threshold (see also SEM 6/2007: 5). Factor incomes recorded an increase in domestic banks' net interest payments as well as in net expenditure from direct investment. Although banks' interest receipts from loans given to the rest of the world increased, their interest payments were even higher due to the extensive borrowing abroad in the previous years. Direct investment recorded an increase in both net expenditures from capital income (dividends, distributed profits, and reinvested profits) and in net interest payments on loans between affiliated enterprises. The year-on-year increase in the current transfers deficit was largely caused by the higher deficit in other sectors. The latter (insurances, other transfers, workers' remittances) widened from EUR 27.3 m to EUR 54.2 m, year on year. The increase in the current transfers deficit also reflected the higher deficit of the government sector. According to the Ministry of Finance, Slovenia received EUR 154.5 m from the EU budget in the first seven months this year, which is EUR 29.2 m less than in the same period of 2006. The received funds for structural and cohesion policy decreased in particular. Payments to the EU budget totalled EUR 184.2 m, EUR 12.8 m more than in the same period last year. Financial transactions with the rest of the world (excluding international reserves) recorded a net capital inflow of EUR 1,410.4 m in the first seven months of 2007. The same period of 2006 witnessed a net outflow of capital totalling EUR 196.0 m. The higher net capital inflow was largely caused by the higher net liabilities of the BS to the Eurosystem and the long-term borrowing of commercial banks. Portfolio investment by domestic commercial banks recorded the highest year-on-year increase within capital exports. The strong capital outflows seen in the first quarter that were mainly linked to the BS' bills falling due eased off in the last four months. Within currency and deposits, the BS' claims to euro area countries and claims in euros to other countries rose considerably. The high statistical error is largely attributable to the difficulty of distinguishing between the euro currency that the BS puts into circulation as part of the Eurosystem, and the currency that comes into Slovenia from transactions with non-residents. Trade in Services Slovenian Economic Mirror IMAD No. 8-9/2007 p. 7 I-VII, EUR m, current prices Nominal growth rates, % Structure, in % 2006 2007 I-VII 2006 I-VII 2007 Services (balance) 481.7 733.3 - - - Exports of services 1,882.9 2,407.0 27.8 100.0 100.0 Transport 600.0 688.1 14.7 31.9 28.6 Travel 779.2 940.8 20.7 41.4 39.1 Other services1 503.7 778.1 54.5 26.8 32.3 Imports of services -1,401.2 -1,673.7 19.4 100.0 100.0 Transport -332.2 -407.4 22.6 23.7 24.3 Travel -425.0 -469.1 10.4 30.3 28.0 Other services1 -643.9 -797.3 23.8 46.0 47.6 services, licences, patents and copyrights, other business services, personal, cultural, and recreational services, and government services. Exports of services rose substantially in the first seven months this year; their trends diverge considerably from those seen in the last few years. On one hand, they reflect changes in the dynamics and structure of service exports; on the other they also mirror changes in the methodology for registering travel services (see also p. 6). According to balance of payments data, exports of services rose by a nominal 27.8%, year on year, much more than exports of goods (18.2%) and imports of services (19.4%). Consequently, the long-term tendency of the falling share of services in total exports of goods and services was interrupted, while the surplus in services trade surged by EUR 251.6 m from January to July 2007, year on year. It amounted to over EUR 730 m and exceeded the annual surpluses in the trade in services prior to 2005. Among the three main categories of services, exports of other services marked the strongest growth. Within these, exceptional growth (3.3-fold) was recorded in merchanting, whose exports typically vary considerably across the years. Significant increases were also observed in financial (68.3%) and construction services (43.4%), along with various business, professional, and technical services (41.5%). Travel services also achieved high export growth rates, while exports of transport services, which had been the most dynamic category in exports of services in the last few years, lagged behind. Differences in the growth rates of the three main categories of services resulted in significant changes in the structure of services exports, where other services reached 32.3% and topped the share of transport services for the first time. The structure of services exports became much more balanced (see table). In the seven months to July, other services also recorded the highest year-on-year increase within imports. The most notable rises were seen in construction (109.3%) and financial services (67.7%). The expansion of the former was driven by the intensive construction of the road network; the robust growth in the latter was linked to domestic firms' increased demand for financial services from abroad. The increase in transport services imports lagged only slightly behind the imports of other services, while the growth in travel services was considerably lower. As a result, the share of other services and transport in the structure of services imports increased in the seven months to July compared with the same period of 2006, while the share of travel services shrank (see table). The share of other services in the total exports of services should be raised further, since it exceeds 50% in the EU-15. A comparison with the EU is relevant not only because Slovenia is a member of the EU but also because the EU is Slovenia's main market for services (it exports around 75% of services to the EU). At the same time, it is also a highly demanding market where the most competitive service providers operate and which therefore reflects changes in the competitiveness of Slovenian service providers. In 1995-2005, Slovenia widened the gap with the EU-15 in exports of other services, whereas Slovenian exports of transport and travel services rose faster than those of the EU-15. Accordingly, Slovenia's revealed comparative advantage coefficients (RCA; see note under graph) in individual categories of services changed in comparison with the EU-15. In 1995 and 2005, Slovenia had comparative advantages in travel services (tourism), which it improved slightly further in the mentioned period. Compared with the EU-15, Slovenia's comparative advantage rose the most in transport, whereas its comparative disadvantage in other services widened slightly between 1995 and 2005 (see graph). Graf: Revealed comparative advantage coefficients* 1995 and 2005 of Slovenian services exports relative to the EU-15, Trans port 1995 Transport 2005 Touris m 1995 Tourism 2005 Other serv ices 1995 Other serv ices 2005 Source of data: Eurostat; author's calculations. Note: *The revealed comparative advantage (RCA) coefficient is calculated as the share of a service x in the total services exports of a country in comparison with the share of the serv ice x in the total services exports of a group of countries. If the coefficient if higher than 1, the country has a comparative advantage in exports of service x compared with the reference group of countries. 2,0 1,5 ,0 0,5 0,0 Price Trends & Policy Slovenian Economic Mirror IMAD No. 8-9/2007 p. 8 2006 2007 Price indices XII 2006/ O (I 06-XII 06)/ VIII 2007/ VIII 2007/ O (VII 06-VIII 07)/ XII 2005 O (I 05-XII 05) VII 2007 VIII 2006 O (VII 05-VIII 06) Consumer prices (CPI) 102.8 102.5 100.3 103.5 102.7 Goods 102.1 102.0 100.0 102.8 102.0 Fuels and energy 103.9 108.2 98.7 100.4 102.0 Other 101.7 100.5 100.3 103.2 102.0 Services 104.3 103.4 100.9 105.1 104.2 Consumer prices (HICP) 103.0 102.5 100.2 103.4 102.9 Administered prices1 102.1 105.8 100.1 101.3 101.6 Energy 103.7 108.0 98.6 99.8 101.7 Other 97.9 100.2 103.6 104.7 101.4 Core inflation: - trimmean 102.7 102.8 100.2 102.4 102.2 - excluding food & energy 102.0 101.2 100.5 103.1 101.9 Producer prices: - domestic market 102.8 102.3 99.9 105.3 104.2 - EMU 106.3 102.6 99.6 104.7 106.1 Consumer prices in the EMU 101.9 102.2 100.1 101.7 101.8 Sources of data: CPI, HICP, IPI: SORS; administered prices and core inflation: IMAD's estimate; MUICP in the EU: Eurostat (provisional data) and IMAD's recalculation. Note: figures are not directly comparable between the years due to the annual changes of the administered prices index. Long-term inflation indicators rose in the summer months. After prices remained unchanged in July, they rose by 0.3% in August. The year-on-year price rise totalled 3.8% in July and moderated to 3.5% in August. Average inflation also rose in the summer and now totals 2.7%. We can expect a further slight increase in average inflation in the months ahead, based on past developments. The acceleration of inflation seen this year has been driven mainly by the rising prices of food and package holidays. A comparison of price trends in the first eight months of 2007 with the previous two years shows that the changes (i.e. rises and falls) in most price groups were similar as in the same period of the previous two years. The only exceptions were the high rises in the prices of food and of recreation and culture (see graph). The rises in the latter group are largely caused by the prices of holidays. After the prices of package holidays rose by 13.7% in July, they increased by a further 3.3% in August and were 7.3% higher than in August 2006. In the eight months to August, they contributed 1.1 p.p. to the 3.2% overall inflation. This contribution is largely seasonal and will therefore decline substantially until the end of the year. The prices of package holidays rose both in Slovenia and abroad. The 5.7% increase in food prices recorded in this period contributed 0.9 p.p. to inflation. However, food prices have also been rising elsewhere in Europe. In July, the Government finalised the process of harmonising excise duties on tobacco and tobacco products with EU regulations. The harmonisation with excise duty rates laid down in EU regulations contributed slightly more than 0.2 p.p. to inflation. This final increase completed the harmonisation process. The contribution of liquid fuel prices to inflation decreased in July and August. Coupled with the depreciation of the US dollar, oil price changes seen in the global market in July and August translated into a smaller overall contribution of liquid fuel prices to domestic inflation this year. In July and August together, this contribution decreased by 0.1 p.p. and thus totalled 0.6 p.p. in the first eight months of the year. In September, the Government cut excise duties on liquid fuels for transport and heating. In line with the counter-cyclical policy of adjusting excise duties on liquid fuels for transport and heating, the Government reduced these excise duties to the lowest level allowed by EU regulations in order to mitigate the effect of the oil price hikes in the global market on domestic prices. This measure reduced inflation by approximately 0.2 p.p. Graph: Contributions of individual groups of the price index to inflation in the first eight months of selected years 1,2 0,9 0,6 0,3 0,0 -0,3 -0,6 -0,9 -1,2 i i —I ■ 1 11 1 u I H 1—^ ^M ■ ili □ Aug.2005/Dec.2004 □ Aug.2006/Dec.2005 i ■ Aug.2007/Dec.2006 i i i _ o o .E od = aj o > -S > aj £= ±± « £ Source of data: SORS, calculations by IMAD. Money Market - Household Savings Slovenian Economic Mirror IMAD No. 8-9/2007 p. 9 Household savings in banks and EUR m, nominal Nominal growth rates, % mutual funds managed by domestic 31. XII 2006* 31. VII 2007 31. VII 2007/ 31. VII 2007/ 31 VII 2007/ administrators 30. VI 2007 31. XII 2006* 31 VII 2006* Total savings 11,451.3 12,178.6 1.2 6.4 11.0 Domestic currency savings 7,181.3 11,759.9 1.3 - - Overnight deposits1 3,730.9 5,478.4 -0.6 - - Short-term deposits 2,558.1 4,485.8 2.1 - - Long-term deposits 677.2 1,202.2 3.7 - - Dep. redeemable at notice 215.0 593.5 8.6 - - Foreign currency savings 4,270.0 418.7 -1.4 - - Overnight deposits1 1,794.3 173.4 -2.2 - - Short-term deposits 1,877.1 183.0 -2.4 - - Long-term deposits 474.4 45.5 1.1 - - Dep. redeemable at notice 124.2 16.8 13.4 - - Mutual funds2 1,967.3 2,692.1 4.9 36.8 75.7 Source of data: Monthly Bulletin of the BS, IMAD's calculations. Notes: 1demand deposits; 2data for June 2007; *due to the transfer of euro loans to domestic currency loans, data from previous years are not comparable with data for 2007, and calculations of growth rates are therefore senseless. After household savings in banks recorded minimum or even negative growth rates in July in the previous years, they rose relatively strongly in July this year. Their monthly increase topped 1% for the third consecutive month. While euro deposits are rising due to higher interest rates, foreign currency deposits have continued to decline and now account for less than 4% of the total household savings in banks. On the whole, household savings rose by 6.4% in the seven months to July, exactly twice as much as in the same period of 2006. Their year-on-year growth picked up for the fourth month in a row and exceeded 10% for the first time in over 18 months. The total net flows amounted to EUR 727.3 m, more than double the net inflows from the comparable period of 2006. Almost 70% of the total net flows consisted of deposits redeemable at notice (37.3%) and short-term deposits (32.1%). The former exceeded the 2006 level more than 20-fold. The net inflows of overnight deposits eased off considerably, amounting to just over 40% of the net inflows from the first seven months of 2006. July saw an increase in all types of time deposits. The highest increase (8.8%) was recorded in deposits redeemable at notice, whose monthly rises have not gone below 6% this year. The volume of these deposits rose by almost 80% in the seven months to July, compared with a less than 5% increase in the same period last year. The growth of other short-term and long-term time deposits increased much less dramatically. The average monthly growth rates were 0.7% for short-term deposits and 1.2% for long-term deposits. The former rose by 5.3% in the seven months to July (1.6% in 2006), while the latter recorded an 8.3% increase after having dropped by 3.1% in the first seven months of 2006. Mutual funds have also enjoyed high growth rates. In the first half of the year, their assets rose by a good third. The increase is largely attributable to the relatively high return rates on this kind of investment. A significant contribution also came from net payments to mutual funds, which amounted to EUR 287.1 m in the six months to June and were 3.2-times higher than in the first half of 2006. Data on the structure of funds show that the share of the more risky stock mutual funds already hold almost two thirds of the total assets in domestic-managed mutual funds. Graph: Net flows into mutual funds and bank deposits 150 1- 125 - □ Mutual funds 100 - n Deposits 75 - 50 d -25 194,1 212,2 6 6 6 6 6 6 6 6 6 0 0 0 0 0 0 0 0 0 n a J b £ ra M Œ A ya M n u J ZD J g u A Œ e S Sources of data: BS, calculations by IMAD. Note: The figure for mutual funds for July is not available yet. 356,4 25 0 Money Market - Loans Slovenian Economic Mirror IMAD No. 8-9/2007 p. 10 Domestic banks' loans Nominal amounts, EUR m Nominal loan growth, % 31. XII 2006* 31. VII 2007 31. VII 2007/ 30. VI 2007 31. VII 2007/ 31. XII 2006* 31. VII 2007/ 31. VII 2006* Loans total 20,052.9 24,029.5 3.0 19.8 30.5 Domestic currency loans 7,317.1 22,521.3 2.7 - - Enterprises and NFI 3,926.5 16,600.9 3.4 - - Households 2,896.4 5,364.1 1.7 - - Government 494.3 556.3 -8.2 - - Foreign currency loans 12,735.8 1,508.2 7.7 - - Enterprises and NFI 10,091.3 698.9 8.7 - - Households 2,484.3 793.1 7.0 - - Government 160.1 16.3 -2.7 - - Household loans by purpose 5,380.7 6,157.2 2.4 14.4 25.0 Consumer credits 2,286.6 2,531.9 1.8 10.7 16.9 Lending for house purchase 1,955.8 2,361.0 3.1 20.7 39.1 Other lending 1,138.3 1,264.2 2.1 11.1 18.9 Source of data: BS Bulletin, calculations by IMAD. Notes: NFI - non-monetary financial institutions; *due to the transfer of euro loans to domestic currency loans, data from previous years are not comparable with data for 2007, and calculations of growth rates are therefore senseless. Domestic banks' lending activity continued to boom in July. In the summer months of 2006 the monthly growth rates of loans hovered around 1.5%. This year, they were approximately double that rate. July's year-on-year growth rate of domestic banks' loans to nonbanking sectors exceeded 30% and thus reached the highest value since 2005 (since comparable data have been available). Slovenia recorded by far the highest credit growth rate among all EMU countries that month. Among other members, fairly high growth rates were recorded only in Spain (20.6%), Ireland (17.3%), and Greece (15.7%). Notably, loans to enterprises and NFI are still rising strongly; the growth of household loans has stabilised, while the government sector continued to record a net repayment of loans. The total net flows of loans to the non-banking sectors thus amounted to EUR 3,976.6 m in the first seven months of the year (74.6% more than in the same period last year) and already exceeded the total value of the net loans approved in 2006. The monthly increase in the volume of loans to enterprises and NFI topped 3% for the fourth consecutive month. After having taken out mostly loans for other purposes in the previous two months, enterprises and NFI recorded net repayment of these loans in July, while they obtained more working capital loans as well as investment loans. The year-on-year growth thus rose to 34.9% in July. It was mostly underpinned by working capital loans (19.1 p.p.), but investment loans also made a substantial contribution (11.7 p.p.). The net flows of loans to enterprises and NFI totalled EUR 602.3 m in July, the second highest value this year (April: EUR 620.6 m). In the seven months to July, they surged to EUR 3,281.9 m, almost double the level from the same period of 2006. After the considerable boom in borrowing seen in the first quarter, enterprises reduced their net indebtedness abroad in the second quarter. Following the net repayment in April, enterprises and NFI also net repaid loans obtained abroad in June, in the amount of EUR 21.2 m. In the first half of the year, enterprises and NFI thus recorded net borrowing of EUR 239.9 m, which is 22.7% less than in the same period last year. Households continue to take out primarily housing loans. Their total net flows achieved a value of EUR 405.2 m in the first seven months of the year, 23.3% more than a year ago. They accounted for a good half of the total net flows, which rose by about one fifth at the year-on-year level. The net flows of consumer loans reached a similar growth rate as housing loans but were much lower in value, amounting to EUR 245.3 m. The year-on-year growth of these loans has remained at a level between 15% and 17% almost all year. Only Greece enjoyed a higher growth rate of consumer loans in July (21.2%), while the EMU average was 4.2%. In 2006, consumer loans as a share of GDP totalled 7.7% in Slovenia, while the average in the EMU was 7.0%. In other types of household loans, Slovenia's values were considerably lower than the EMU averages. Graph: Net flows of domestic banks' loans to domestic non-banking sectors 800 600 n O 400 F ir 200 D 0 -200 □ Household loans □ Loans to enterprises and NFI i Government loans 6 6 6 6 6 6 6 6 h- h- h- h- h- h- 0 0 0 0 0 0 0 0 0 0 0 0 0 0 y n — Ö) p t v c n b ra pr y n a u u e o e a e Ap a u M A S O N D F M M Source of data: SORS, calculations by IMAD. Labour Market Slovenian Economic Mirror IMAD No. 8-9/2007 p. 11 thousands % growth Selected labour market indicators I-XII XII VI VII I-VI 2007/ I-VII 2007/ O 2006/ 2006 2006 2007 2007 I-VI 2006 I-VII 2006 O 2005 Registered labour force (A=B+C) 910.7 911.3 925.4 924.5 1.3 1.3 0.6 Persons in formal employment* 824.8 833.0 856.2 854.4 3.4 3.4 1.4 in enterprises and organisations 675.1 681.7 697.5 696.2 2.9 2.9 1.3 by those self-employed 66.5 67.5 70.6 70.8 5.1 5.1 1.7 self-employed and farmers 83.3 83.8 88.1 87.3 6.4 6.2 2.1 Registered unemployed 85.8 78.3 69.3 70.1 -18.1 -18.1 -6.6 women 47.0 42.6 38.5 39.3 -17.2 -17.3 -4.9 aged over 40 39.7 37.7 36.7 36.9 -7.2 -7.2 -0.9 unemployed over 1 year 41.9 39.7 36.0 35.8 -12.1 -12.4 -3.6 Rate of registered unemployment (C/A), % 9.4 8.6 7.5 7.6 - - - male 8.9 7.1 6.0 6.0 - - - female 12.0 10.5 9.4 9.6 - - - Job vacancies 19.0 15.9 23.1 18.8 4.6 4.8 12.3 for a fixed term, % 75.3 76.4 76.6 78.4 - - - Number of people hired 13.0 9.1 13.0 11.8 -0.8 -1.4 13.8 Lower education 3.9 2.6 4.6 3.9 3.4 2.6 19.4 Secondary education 7.1 5.2 6.7 6.4 -2.6 -3.2 13.8 Tertiary education 2.0 1.3 1.6 1.6 -3.3 -3.6 4.3 Sources of data: SORS, ESS, IMAD's calculations. Note: 'persons in employment according to administrative sources. Favourable trends in the labour market continue despite seasonal impacts. As in April and May, formal employment rose by 0.4% in June (the highest rise was again recorded in construction). In July, it declined by 0.2%, mostly due to dismissals of workers employed for a fixed term and the lower estimated number of farmers. In the first half of 2007, the year-on-year increase in the average number of formally employed persons totalled 3.4%. It was the highest (11.1%) in construction and also significant in business services (8.7%) and agriculture (8.3%). The year-on-year increase in survey employment was also high in the second quarter this year (2.6%), while it averaged 1.9% in the first half of 2007. The survey unemployment rate fell to 4.6% in the second quarter, down 1.3 p.p. from a year ago. July's registered unemployment rate rose seasonally to total 7.6%. The number of registered unemployed declined to 68,539 in August after the seasonal increase in July (to 70,134). July's increase in registered unemployment is a seasonal phenomenon observed every year, caused by dismissals of workers employed for a fixed term in June (especially in education), although there were fewer such dismissals this year (2,897 in total) than in 2006 (3,149). Also smaller than last year were the inflows of first-time job-seekers (678) and other unemployed persons who lost work (1,955). In August, the inflow to unemployment shrank once again (to 4,491) and hit the lowest mark this year. On the other hand, July's outflows from unemployment were also lower than in June 2007 and July 2006, but they rebounded in August. 3,047 unemployed persons were hired in July and 3,823 in August. The number of registered unemployed fell by a further 1,621 persons in July and 1,909 in August for other reasons. Every year, 25%-35% of participants successfully complete the '10,000 Programme'1. At least a fifth of them secure employment within six months. This is one of the main active employment policy programmes in the labour market. It enables unemployed persons to obtain a higher or additional degree of formal education in order to improve their employment prospects. The number of participants has been declining in recent years (see graph). In 2005/2006 a total of 6,332 people participated in this programme. Most are enrolled in programmes leading to vocational qualifications (around two fifths) and secondary technical education (close to one third). More than half of the participants are women, unemployed, or less than 26 years of age. The dropout rate is low (4%-5%), but around 35% of participants take a break in the course of the programme. Only a fraction (15.8% in 2005/2006) of the participants takes part for more than two years. The programme includes two special support programmes: Project Learning for Young Adults, intended mainly for young dropouts, and Training for Success in Life - A Bridge to Education, which caters to people with poor functional literacy. In 2005/2006, a respective 199 and 367 people were involved in these two programmes. 1 Called the '5000 Programme' until academic year 2002/2003. Graph: People enrolled in formal education as part of training programmes for the unemployed, 1998/19992005/2006 8000 7000 6000 5000 4000 3000 2000 1000 0 1998/1999 1999/2000 2000/2001 2001/2002 2002/2003 2003/2004 2004/2005 Source of data: M inistry of Labour, Family and Social Affairs. ■ University □ Higher undergraduate education □ Post-secondary vocational education □ Secondary technical school s Vocational education s Primary education + grammar schools B C D E F Earnings Slovenian Economic Mirror IMAD No. 8-9/2007 p. 12 Gross wage per employee, growth index Wages in In nominal terms In real terms1 EUR VII 07/ VII 07/ I—VII 07/ VII 07/ VII 07/ I—VII 07/ VII 2007 VI 07 VII 06 I—VII 06 VI 07 VII 06 I-VII 06 Gross wage per employee, total 1,262.95 100.7 106.9 105.7 100.7 103.0 102.8 Private sector (activities A-K) 1,180.03 100.1 107.6 106.5 100.1 103.7 103.6 A Agriculture 1,029.02 100.2 108.5 107.4 100.2 104.5 104.5 B Fisheries 1,014.71 100.0 108.6 103.1 100.0 104.6 100.2 C Mining and quarrying 1,517.50 96.5 106.6 104.3 96.5 102.7 101.5 D Manufacturing 1,091.03 99.7 107.5 106.1 99.7 103.5 103.2 E Electricity, gas and water supply 1,501.96 95.3 103.5 103.9 95.3 99.7 101.1 F Construction 1,050.28 101.9 108.5 107.2 101.9 104.5 104.2 G Wholesale, retail; certain repairs 1,136.23 101.0 107.8 107.7 101.0 103.8 104.8 H Hotels and restaurants 919.79 98.8 106.5 104.9 98.8 102.6 102.1 I Transport, storage & communications 1,329.27 101.3 106.9 105.7 101.3 103.0 102.9 J Financial intermediation 1,833.14 95.9 108.5 108.0 95.9 104.5 105.0 K Real estate, renting, business services 1,330.00 101.6 108.4 106.1 101.6 104.4 103.2 Public services (activities L to O) 1,509.81 102.1 105.9 104.3 102.1 102.0 101.4 L Public administration 1,564.91 103.9 108.7 104.4 103.9 104.7 101.6 M Education 1,570.69 101.3 104.3 105.1 101.3 100.5 102.2 N Health and social work 1,422.80 102.2 105.4 103.5 102.2 101.5 100.7 O Other social and personal services 1,398.65 100.0 104.5 103.6 100.0 100.7 100.8 Source of data: SORS and IMAD's calculations for the private sector and public services. Note: deflated by the consumer price index. The gross wage per employee declined by 0.7% in nominal and by 1.1% in real terms in June. In the private sector, the gross wage fell by 1.1% in nominal and by 1.5% in real terms, largely because the month was one working day shorter. Meanwhile, the gross earnings in public services roughly remained at the level from the previous month. In nominal terms they rose by 0.2%; in real terms they declined by 0.2%. In July, gross earnings increased by a nominal 0.7%. Since prices remained unchanged, their real increase was the same. The gross wage in the private sector roughly remained at June's nominal level, since July having two working days more did not have a significant impact on wage increases due to summer holidays. In the industry and construction group (activities C, D, E, F), the gross wage per employee fell by a nominal 0.3%. Within this group, gross earnings only rose in the construction sector, where activity is seasonally high in July. The highest nominal increase (0.9%) was recorded in production services (G, H, I). A nominal drop in gross wages was only recorded in hotels and restaurants, where growth in the seven months to July was also slower than the growth of the average gross wage in the private sector. The gross wage in the group of business services (J, K) edged down 0.2 % in nominal terms. The gross wage per employee in public services rose by a nominal 2.1% in July. This rise was based on the adjustment mechanism from the initialled Agreement on the Base Wage Adjustment Mechanism and the Level of Expenditure Earmarked for the Elimination of Wage Disparities 2007-2009. Startinglevel wages were raised by 1.3% in July (0.8% from the total 2.1% was set aside for the elimination of wage disparities) and by an additional 0.45% to cover the difference between actual inflation (Dec. 2006/Dec. 2005) and the 2.35% threshold above which the difference in actual inflation must be incorporated into wages. Including the difference for last year's inflation, the adjustment percentage totalled 1.75%. In addition, the outstanding payments from this difference accrued from January to June were also paid in July. As a result, gross earnings rose approximately by a further 2.7% and will decrease by approximately as much in August. The biggest rise in gross earnings was recorded in public administration, the smallest in education. In education, gross earnings usually fall by about 2% in July since additional school activities are not carried out during the summer break. The workload in health care is also somewhat smaller in the summer months, which reduces the effect of the adjustment percentage on wage rises. Graph: Nominal gross wage per employee by groups of activities 1800 1700 1600 1500 1400 1300 1200 1100 1000 Apr May Jun Jul Aug Sep Oct Nov Dec Source of data: SORS, calculations by IMAD. Jan Feb 2007 Apr May Jun Manufacturing Slovenian Economic Mirror IMAD No. 8-9/2007 p. 13 Growth rates, % Selected economic indicators VII 2007/ VII 2007/ I-VII 2007/ I-XII 2006/ VI 2007 VII 2006 I-VII 2006 I-XII 2005 Production value1 -0.4 10.4 9.9 6.5 - highly export-oriented industries2 0.8 19.5 14.1 8.0 - mainly export-oriented industries3 -2.0 7.0 10.0 8.9 - mainly domestic-market-oriented industries4 2.8 7.4 4.4 0.8 Average number of employees -0.2 1.1 1.0 -1.7 Labour productivity -0.2 9.2 8.8 8.3 Level of inventories5 0.9 10.4 7.7 1.8 Turnover5 0.7 11.2 8.6 5.2 New orders5 -16.0 14.7 12.8 6.7 Industrial producer prices (domestic market) 0.1 3.8 3.9 2.3 - producer prices/inflation 0.1 0.0 1.1 -0.2 Source of data: SORS; IMAD's calculations. Notes: real growth calculated on the basis of data on production value - SORS' recalculation with the IPI (provisional data); Manufacturing industries (DG, DK, DM) which have, according to data on Slovenian commercial companies from the AJPES, earned over 70% of their average net revenues from sales in foreign markets in the last three years on average; Manufacturing industries (DB, DC, DD, DH, DJ, DL, DN) which have earned 50% to 70% of their average net revenues from sales in foreign markets in the last three years on average; "manufacturing industries (DA, DE, DF, DI) which have earned less than 50% of their average net revenues from sales in foreign markets in the last three years; 5real growth. In July, industrial production recorded double-digit year-on-year growth once again. According to SORS' provisional data, the value of production surged by 10.4% in comparison with July 2006. Following the more modest May and June, the real year-on-year increase in July was again very high. The strong growth was additionally underpinned by July having one working day more this year - working-day adjusted growth totalled 8.1%. In the second quarter, particularly technologically advanced industries kept up the high growth rates from the first quarter.1 In the first three months, some less technology-intensive industries also achieved exceptional growth rates on the back of the additional boost from construction activity. In the second quarter, the rapidly growing chemical industry (DG) did not follow the moderate slowdown seen in almost all manufacturing industries, while the manufacture of transport equipment (DM) climbed high above the negative results from the first quarter. These two industries are technology-intensive. The brisk expansion 1 According to OECD methodology, the sub-industries DG, DK, DL, and DM are classified as high- and medium-high technology industries. Medium-low technology industries include the branches DF, DH, DI, and DJ, while DA, DB, DC, DD, DE, and DN are classified as low-technology industries (for a description of abbreviations, see appendix on p. A 21). of these industries continued in July, so that the overall growth of high-intensive industries in the seven months to July caught up with the medium-low technology industries (both groups recorded growth of around 13%, year on year). In the first quarter, the real growth of industrial production totalled 12.1% in the first group and 17.5% in the second. The third group - low-technology industries - recorded lower growth rates (around 3% on average) in the first seven months of the year. In the first half-year Slovenian manufacturing enjoyed one of the highest growth rates in the EU. After industrial production rose vigorously (growth rates were even higher than in 2006, a booming year) almost everywhere in the EU in the first quarter, the expansion moderated in the second quarter (see graph). Slovenia witnessed a similar development, although to a smaller degree. In the six months to June, Slovenia achieved one of the highest growth rates in the EU, which can be attributed to the economic boom in Slovenia's main trading partners (Germany, Austria) and other countries to which Slovenia has exported extensively this year (Hungary, the Czech Republic, Poland, and Slovakia). All these countries have recorded vigorous growth of industrial production relative to the EU average this year (see graph). Graph: Manufacturing's industrial production (data adjusted for number of working-days) Source of data: Eurostat, calculations by IMAD. Construction Slovenian Economic Mirror IMAD No. 8-9/2007 p. 14 Selected construction indicators, real indices VII 2007/ VII 2006 Q2 2007/ Q2 2006 2006/ 2005 Value of construction put in place1 119.7 131.5 115.3 Buildings 120.4 131.0 114.0 Residential buildings 101.6 102.6 Non-residential buildings 129.2 141.2 117.7 Civil engineering 119.2 132.0 116.! Value of the stock of contracts , 117.3 119.6 173.5 Value of new contracts1 98.8 95.8 152.3 Number of people employed in construction 110.5 110.! 107.5 Average gross wage per worker employed in construction 104.5 103.6 103.5 Sources of data: SORS, CCIS; calculations by IMAD. Notes: the analysis covers enterprises whose value of construction put in place totalled at least EUR 1.45 m according to the financial statements for 2005, divisions engaged in construction activity employing at least 20 workers, and Construction activity remained vigorous in the second quarter of the year. According to national accounts data, value added in construction was 25.7% higher than in the same period of 2006. The value of construction put in place in large firms (see the note under the table) was 31.5% higher. The biggest rise was recorded in non-residential construction (41.2%), while residential construction remained at approximately last year's level. In interpreting the figure regarding the value of residential construction put in place we should bear in mind that these figures exclude the activity of smaller firms (see the note under the table), where the construction of buildings is the main activity. According to seasonally adjusted data, activity in large firms rose in April and May, and declined in June. Data for June and July show the first signs of softening in the construction sector. According to seasonally adjusted data, the value of construction put in place in July was approximately at the same level as in June and thus 7.4% lower than in May. In the five months to May, the value of construction put in place was 38.7% higher than a year ago; in June and July the difference narrowed to 16.7%. Employment in the construction sector continued to rise. In 2006, the number of workers employed in the construction sector was 7.5% higher than in the previous year. In the first seven months of 2007 it surged by 11%. The hiring of foreign workers has also been on the increase (see SEM 7/2007: 11). The number of workers rose particularly in building completion and general construction, similarly as last year. In terms of worker status, sole proprietors and their employees recorded higher growth rates. Increasingly many firms face difficulties in finding labour. According to business trends in construction, 51% of construction firms reported "a shortage of skilled labour" as a limiting factor to production. If answers are weighted by the number of employees, this share is even higher (58%) - the highest in five years (since these data have been available). The shortage of skilled workers became a significant limiting factor in the second half of 2006 (see graph), coinciding with the boom in construction activity in that period. After the decline in the first quarter, the total planned floor area of all buildings was again higher in the second quarter than in the same period of 2006. The planned floor area of new buildings and extensions was 16.0% greater in the second quarter than in the same period of 2006. The increase reflects the high total planned floor area of residential buildings (up 54.4%), while the total planned area of nonresidential buildings shrank by 16.6%, year on year (which is not surprising given the 61.8% increase in the second quarter of 2006). Building permits were granted for the construction of 2,872 new homes, 41.7% more than a year ago and the highest number since these data have been available (1999). Graph: The seasonally adjusted value of construction put in place and shortages of skilled workers; divergence from the long-term average in standard deviations, three-month moving averages 2,0 1,5 1,0 0,5 0,0 -0,5 -1,0 -1,5 Shortage of skilled labour ■ Value of construction put in place, seasonally adjusted U- S < z s < Source of data: SORS, calculations by IMAD. several non-construction enterprises which carry out construction activity; end of period; deflated by the CPI 2,5 Indicators of Private Consumption and Household Indebtedness Slovenian Economic Mirror IMAD No. 8-9/2007 p. 15 Selected private consumption and household indebtedness indicators Real year-on-year growth rates, %* I-VI 2007 I-VI 2006 Net wage bill1 7.7 3.1 Turnover in retail trade2 1.6 3.2 New car registrations3 10.9 -0.4 Consumer confidence indicator4 -8.2 -16.0 Commercial banks' loans to households (end-of-period stock)5 24.6 26.1 Household savings in banks (end-of-period stock)5 9.9 6.1 Sources of data: SORS, DUNZ, MF, calculations by IMAD. Notes: 'unless otherwise indicated; according to SORS' data on the average net wage and persons employed by legal entities, recalculated for the month of payment; Calculation from original volume indices, SORS; 3increase in the number of cars, DUNZ; "original value, SORS; 5nominal increases. Consumption is set to increase somewhat this year. The main indications are the large increase in the wage bill, consumer optimism, and new car registrations. Private consumption rose by 4.0% in 2006. In the first six months of 2007, the net wage bill increased by 4.6 percentage points more than in 2006, in real terms. According to SORS' data on the average net wage and persons employed by legal entities, the net wage bill rose by 7.7% (see also SEM 6/2007: 15). Other remuneration (AJPES) went up 3.6%, while social transfers (MF) increased by 1.5%. Compared with the first six months of 2006, the purchases of durable and semi-durable goods picked up amid rising consumer optimism. In the first half of 2007, a good 10% more cars were registered than in the same period of 2006. Turnover in retail trade increased, but only by 1.6%; the highest rise was recorded in the group furniture, household appliances, and construction material (21.2%). In comparison with the first half of 2006, consumers' assessments of the past and future economic situation, their financial situation, unemployment levels, and advisability of saving improved significantly. They were also more optimistic regarding future savings. On the other hand, they gave lower ratings to the price developments in the past year and the advisability of making major purchases. Similar trends continued in the third quarter. The growth of new car registrations rose further in July and August - almost 20% more cars were registered than in the same period of 2006. Individuals registered over 24,000 cars in the eight months to August. Turnover in retail trade increased by 0.2% (in Q3 of 2006 it declined in real terms). In the first seven months, residents' spending abroad rose by 10.4% while non-residents' spending in Slovenia surged by 20.7% (see also p. 6 and SEM 6/2007: 15). Consumer optimism was still higher in the third quarter (-9) than in the same period of 2006 (-12) despite September's drop (to -16). We estimate that the decline in optimism seen in September was largely linked to consumers' perception of price trends in the past year (the indicator's value fell by 21 points in August and by a further 6 in September), which also affected the estimate of the financial situation of the household, both over the last 12 months (its value fell by 14 points in September) and over the next 12 months (down 18 points). Although the net flows of loans rose somewhat less than in previous years, they remained at a high level. The volume of loans rose by a nominal 25% in July, year on year. The volume of housing loans is still rising at the fastest pace (July 2007: 39.1%; July 2006: 56.6%; July 2005: 36.8%). The volume of consumer loans increased by 16.9%, that of other loans by 18.9%. The share of housing loans is therefore still rising - it comprised 34.4% of total loans in July last year and 38.3% this year. The net flow of loans increased by a fifth in the seven months to July, year on year. Within that, the flows of housing and consumer loans achieved roughly even growth (23.2% and 23.7%, respectively), while the flows of other loans increased by close to 8%. Housing loans represent a good half of the total loans' net flows - in the first seven months of 2007, Slovenian households took out housing loans worth EUR 405 m (net borrowing). Consumer loans are used partly for the purchase of durable and semi-durable goods (home furnishings - furniture, household appliances); the rest is probably spent on cars, since new car registrations have recorded high growth rates since July 2006. The overall net flows increased by 32.5% in the first seven months of 2006 and more than two-fold in the same period of 2005 (see also p. 10). Graph: Selected short-term private consumption indicators and net flows of loans and savings in banks Q1 2006 Q2 2006 Q3 2006 i Net flows of savings in banks, right axis rrrrn Net flows of housing loans, right axis - - Net wage bill, recalculated for month of payment 500 450 400 350 300 250 200 150 100 50 0 Q1 2007 Q2 2007 Net flows of consumer and other loans, right axis . Turnover in retail trade Sources of data: SORS, AJPES, MF, BS, calculations by IMAD. Distributive Trades Slovenian Economic Mirror IMAD No. 8-9/2007 p. 16 Selected distributive trades indicators Growth rates, % Q1 2007/ Q1 2006 Q2 2007/ Q2 2006 2006/ 2005 Total real turnover in retail trade, the sale and repair of motor vehicles, and retail sale of automotive fuels 3.4 5.9 6.3 Real turnover in retail trade 2.6 0.6 1.4 Sale of food, beverages, and tobacco -1.9 -9.1 -3.1 Sale of non-food products 7.5 11.5 6.7 Real turnover in the sale and maintenance of motor vehicles and in retail sale of automotive fuel 4.9 12.2 11.7 Motor vehicles, motorcycles, parts, and accessories 11.4 19.9 17.0 Maintenance and repair of motor vehicles -0.2 8.1 7.4 Automotive fuel -2.9 2.2 6.2 Total nominal turnover in wholesale trade & commission trade1 20.5 19.3 10.2 Average number of employed persons2 2.0 2.9 0.8 Average gross wage per employee2, 3 5.5 4.3 3.1 Real growth of value added in distributive trades2 8.1 7.8 6.1 vehicles, and personal and household goods; deflated by the consumer price index. The growth of value added in wholesale and retail trade, the repair of motor vehicles, and consumer goods (activity G) remained exceptionally high in the second quarter of 2007. In real terms, it was 7.8% higher than in the second quarter of 2006. As in the first quarter, the high growth rate of value added in distributive trades largely reflected the robust activity in construction and manufacturing, as evidenced by the SORS' survey which shows that the turnover in wholesale trade (up almost 20% in nominal terms; see table) and in some segments of retail trade that are most closely linked to those two activities (e.g. the sale of non-food products) enjoyed the strongest growth. Turnover in the sale of motor vehicles also rose substantially. Increased activity is also indicated by the number of employees in the trade sector, which was higher than in the first quarter (see the table). The highest increases were seen in wholesale (3.7%) and retail trade (3.1%); the number of workers in the sale, maintenance, and repair of motor vehicles and in the retail sale of automotive fuels rose as well (by 0.2 %), after a decline in the first quarter. Stronger growth of the total turnover in the second quarter was largely underpinned by the sale of nonfood products, the sale and repair of motor vehicles, and the sale of automotive fuels (see table). Within the sale of non-food products, the biggest real increase in turnover was again recorded in specialised shops selling furniture, household equipment, and construction material (17.2%). The relatively high real growth rates of turnover in non-specialised shops mainly selling non-food products (10.6%), specialised shops selling textiles, clothing, and leather products (10.5%), and specialised shops selling books, newspapers, and other retail sales (15.8%) are largely attributable to the negative or just positive year-on-year growth rates from the second quarter of 2006. Turnover in the sale of food, beverages, and tobacco dropped for the sixth consecutive quarter, notably in non-specialised shops mainly selling food (-9.5%), which include all major retailers. Turnover in the sale and repair of motor vehicles and the sale of automotive fuels rose by a real 12.2%; specifically by 19.9% in motor vehicles, motorcycles, parts, and accessories, by 8.1% in the maintenance and repair of motor vehicles, and by 2.2% in automotive fuels, following a decline in the last two quarters. The strong performance in the sale of motor vehicles is also corroborated by the number of new car registrations, which rose by 13.2% in the second quarter over the same period of 2006 (see also p. 15). Graph: Turnover indices in distributive trades 225 205 ■ Real turnover in retail trade -Real turnov er in the sale of motor v ehicles, motorcy cles, parts, and accessories -Real turnover in the sale of automotive fuels ■ Nominal turnover in wholesale trade 85 Q1 2003 Q2 Q3 Q4 Q1 2004 Q2 Q3 Q4 Q1 2005 Q2 Q3 Q4 Q1 2006 Q2 Q3 Q4 Q1 2007 Q2 Source of data: SORS. Source of data: SORS, calculations by IMAD. Notes: only nominal indices are published; in wholesale and retail trade, the repair of motor Tourism Slovenian Economic Mirror IMAD No. 8-9/2007 p. 17 Selected indicators for tourism & hotels and restaurants Growth rates, % Q1 2007/ Q1 2006 Q2 2007/ Q2 2006 Q1 2006/ Q12005 Q2 2006/ Q2 2005 Q3 2006/ Q3 2005 Q4 2006/ Q42005 Overnight stays, total 4.8 10.1 3.1 0.5 0.4 6.6 Domestic tourists 0.5 13.7 5.7 -5.6 1.8 7.3 Foreign tourists 9.0 7.9 0.6 4.7 -0.4 6.0 Average number of employed persons1 2.1 3.1 1.9 2.1 1.9 1.9 Average gross wage per employee1, 2 1.6 2.3 2.3 2.6 0.8 2.0 Prices of hotel and restaurant services, total3 6.9 6.6 3.9 4.6 4.6 4.6 Prices of catering services3 7.6 7.2 4.1 4.5 4.5 4.7 Prices of accommodation services3 4.0 3.8 3.0 4.2 4.0 4.1 Source of data: SORS; calculations by IMAD. Notes: 'hotels and restaurants; 2deflated by the CPI; 3CPI group or sub-group. The growth of tourists' overnight stays in Slovenia strengthened further in the second quarter. The number of overnight stays rose by 10.1% in this period, year on year, while the number of tourists increased by 12.6%. The number of domestic tourists and their overnight stays also rose substantially (among other reasons, due to the drop in last year's second quarter). Meanwhile, the increase in the number of foreign tourists was slightly lower than in the first quarter but still very high in comparison with the growth rates from previous years. All three months were favourable for tourism. The strongest growth was recorded in April, when the number of tourists surged by 18.9% thanks to the favourable distribution of national holidays in April and May and the pleasant weather. The number of overnight stays rose by 19.7%. However, the robust growth rates did not remain as high during the main summer season. According to preliminary data, the number of overnight stays in July and August rose by a mere 3.1%, year on year (non-residents' stays rose by 5.6%, residents' stays declined by 0.5%). In the eight months to August, 7.6% more tourists took a vacation in Slovenia and spent 5.8% more nights here than in the same period of 2006. Within that, the number of residents' overnight stays rose by 4.0%, while that of non-residents' increased by 7.1%. The most common visitors from abroad in the first eight months of the year were from Italy, Germany, and Austria, although their shares in the total number of non-residents' stays are declining. Guests from Italy are still on top in terms of nights spent (18.5% of stays; their number rose by 2.6% in the eight months, year on year). Following a prolonged decline (since 2001), the number of German visitors' overnight stays increased by 3.9% in the observed period, largely on the back of the increase in August (up 15% over August 2006). Tourists from the UK spent significantly fewer nights (-6.7%) in Slovenia in this period, while the increase in the number of Austrian guests' overnight stays was minimal (0.7%). Among the first six countries according to the number of overnight stays, the number of Dutch overnight stays rose appreciably (by 10.7%), while the number of nights spent by visitors from Croatia increased by 2.8%. The overall increase in the number of nights spent by tourists from these six countries, which account for most foreign tourists in Slovenia, was just 2.1%. Their share in the structure of non-residents' overnight stays thus shrank from 65.2% in the first eight months of 2006 to 62.1% in the same period this year. Except for the Netherlands, the shares of all countries from this group declined, since the total number of nonresidents' overnight stays rose by 7.1%. The number of nights spent in Slovenia by tourists from the next group of 13 countries, which represented at least 1% in the structure of non-residents' overnight stays in the eight months to August, climbed by 17.2% in this period. These tourists made 26.1% of the total of non-residents' overnight stays (2.2 p.p. more than in the same period of 2006). Only tourists from Hungary and the USA recorded below-average growth rates, which were, however, probably due to the high figures they recorded last year. Graph: Non-residents' overnight stays in Slovenia in the first eight months of 2007 20 T 18 -16 -14 -12 10 8 6 4 2 0 -2 -■ □ % of total non-residents' overnight stays ^ Y ear-on-y ear increase in the number of ov ernight stay s (right axis) Source of data: AJPES, SORS, calculations by IMAD. Note: see Graph 1. 40 - 30 20 0 -10 Selected Topics Slovenian Economic Mirror IMAD No. 8-9/2007 pp. 19-23 Regional Unemployment Slovenian Economic Mirror IMAD No. 8-9/2007 p. 21 Statistical Unemploy. Selected characteristic groups of registered unemployed (%) Education level Women Age Long-term unemployed* region rate Semiskilled and unskilled workers Highly skilled workers under 25 over 40 I-VI 06 I-VI 07 I-VI 06 I-VI 07 I-VI 06 I-VI 07 I-VI 06 I-VI 07 I-VI 06 I-VI 07 I-VI 06 I-VI 07 I-VI 06 I-VI 07 Osrednjeslovenska 7.4 6.1 38.1 36.9 12.6 13.8 50.7 51.3 16.4 11.8 47.1 52.8 47.7 52.9 Obalno-Kraška 7.6 6.6 36.4 35.6 10.1 12.3 50.7 51.7 17.7 12.7 47.1 52.5 35.9 42.3 Gorenjska 7.0 5.1 38.8 37.9 9.7 11.9 57.2 56.1 15.5 10.3 53.3 60.3 35.4 38.4 Goriška 6.5 5.1 36.9 35.7 11.1 12.5 52.5 51.7 15.2 9.9 46.7 53.4 43.5 49.3 Savinjska 12.3 9.9 37.3 35.8 6.7 8.6 55.2 56.3 20.9 15.7 42.2 48.0 52.4 53.7 Jugovzhod. Slovenija 8.9 7.2 52.2 54.1 5.9 7.2 55.9 54.6 18.9 14.7 47.6 52.6 50.8 56.5 Pomurska 16.8 13.9 50.1 50.7 4.5 5.6 50.2 52.2 21.2 17.3 44.0 50.5 53.2 54.3 Notranjsko-kraška 7.3 5.6 38.1 37.2 10.5 12.8 52.0 53.3 18.8 13.7 47.3 53.1 43.6 42.1 Podravska 13.4 10.8 35.5 35.6 7.2 8.6 56.4 57.6 19.4 14.7 43.0 49.4 46.6 50.3 Koroška 10.6 8.7 34.6 33.6 8.2 10.3 57.0 59.8 22.4 15.7 39.7 46.6 47.1 49.7 Spodnjeposavska 11.0 9.2 43.0 42.6 7.1 7.6 59.2 57.2 14.8 11.6 50.7 57.4 50.7 52.8 Zasavska 12.6 10.2 43.4 42.9 5.6 7.2 58.8 59.4 24.6 19.1 39.4 43.0 46.6 51.3 SLOVENIA 9.9 8.0 39.7 39.2 8.3 9.8 54.2 54.9 18.8 14.1 45.2 51.2 47.5 51.0 Source of data: SORS, ESS; calculations by the IMAD. Note: 'unemployed for over a year. In the first half of 2007, the average registered unemployment rate was lower in all regions compared with the same period of 2006. Nevertheless, regional disparities widened. Although the regions with the highest unemployment rates recorded the biggest decreases (measured in percentage points), most of these regions further widened their relative gaps in comparison with the Slovenian average. Regional registered unemployment rates exceed the national average by 73% in Pomurska, by 35% in Podravska, and by about a quarter in the Zasavska and Savinjska regions. Spodnjeposavska and Koroška also have above-average rates. Gorenjska had the lowest registered unemployment rate in the first half of 2007 (slightly less than 63% of the Slovenian average), replacing Goriška in this position, which traditionally had the lowest unemployment rates (now 63.5% of the Slovenian average). The highest regional registered unemployment rate is 2.7-times higher than the lowest one. The coefficient of variation, which shows regional disparities, also rose by 1 p.p. and totalled 31.8% in the first six months of 2007. Structural unemployment remains a problem in all regions. The decrease in the number of unemployed is matched by a decline in their number in individual groups. Nevertheless, the shares of certain groups of unemployed have been rising regionally. The proportion of long-term unemployed is growing in all regions. The highest percentage was recorded in Jugovzhodna Slovenija - a region where registered unemployment is below the average. Long-term unemployment also exceeds the Slovenian average in the Pomurska, Savinjska, Osrednjeslovenska, Spodnjeposavska, and Zasavska regions. Long-term unemployment tends to correlate with a poor education structure of the unemployed, as is the case in Jugovzhodna Slovenija and the Pomurska region. However, even highly-educated people may find it hard to find employment. The number of tertiary-educated unemployed persons is rising in all regions, with above-average shares mostly occurring in regions with below-average registered unemployment (Osrednjeslovenska, Notranjsko-kraška, Obalno-kraška, Goriška, Gorenjska). On the other hand, the percentage of young unemployed persons, who are often also first-time job-seekers, is declining in all regions. The highest shares occur in regions with above-average registered unemployment, among them Jugovzhodna Slovenija. Unemployed persons over the age of 40, whose share is highest in Gorenjska, continue to have poor employment prospects. In all regions, more than half of the unemployed are women. This proportion has generally been rising, notably in the Koroška and Zasavska regions, where almost 60% of the unemployed were women. Graph: Indices of the divergence of registered unemployment rates from the Slovenian average by region 160 120 -I 80 40 -] 0 □ Jan.-June 2006 □ Jan.-June 2007 Source of data: AJPES, SORS, calculations by IMAD. Note: see Graph 1. Slovenian Enterprises in 2006 Slovenian Economic Mirror IMAD No. 8-9/2007 p. 22 Size class according to the number of employees Micro (0-9) Small (10-49) Medium (50-249) SMEs total Large (250 and over) Total Number of enterprises 2006 98,532 5,309 1,234 105,075 266 105,341 2005 94,894 5,113 1,186 101,193 284 101,477 Percentage of enterprises 2006 93.5 5.0 1.2 99.7 0.3 100.0 2005 93.5 5.0 1.2 99.7 0.3 100.0 Number of employees1 2006 153,123 104,630 129,022 386,775 199,446 586,222 2005 149,763 101,102 124,179 375,045 202,222 577,267 Percentage of employees in enterprises 2006 26.1 17.8 22.0 66.0 34.0 100.0 2005 25.9 17.5 21.5 65.0 35.0 100.0 Average number of employees per enterprise 2006 1.6 19.7 104.6 3.7 749.8 5.6 2005 1.6 19.8 104.7 3.7 712.0 5.7 Average turnover per enterprise (EUR 1000) 2006 150 2,521 13,687 428 96,140 670 2005 136 2,314 12,272 389 83,330 621 Percentage of net turnover from sales in the EU market 2006 9.6 11.3 17.5 13.1 29.7 19.1 2005 - - - - - - Percentage of net turnover from sales in foreign markets (total) 2006 15.3 18.7 26.1 20.4 43.2 28.6 2005 - - - - - - Average value added per employee (EUR) 2006 21,127 28,937 28,300 25,633 33,538 28,322 2005 19,773 26,941 26,425 23,908 31,170 26,452 Average share of labour costs in value added (%)2 2006 53.9 63.4 64.9 60.9 59.3 60.2 2005 54.2 64.5 66.1 61.7 61.2 61.5 Presentation of selected indicators for enterprises in Slovenia, 2005-2006 Sources of data: AJPES, SORS; calculations by IMAD. Notes: 1In order to obtain a more realistic figure, the average number of sole proprietors according to the SORS' data (2005: 43,501; 2006: 44,767) was added to the figures from profit and loss accounts of small entrepreneurs. In classifying enterprises into size classes, we took into account the size structure of small entrepreneurs based on the AJPES' data on the number of their employees. According to the 'number of employees' criterion, 98% of small entrepreneurs were classified as micro enterprises, while the rest were small or medium-sized enterprises. Taking this structure into account, the number of employees (according to AJPES' data) was raised most significantly in the group of micro enterprises (by 42,813 and 44,066, respectively); see also SEM 7/2006: 20. 2Since the income of entrepreneurs does not count as part of labour costs, labour costs in the category of small entrepreneurs, and consequently in the groups of micro enterprises and SMEs, are underestimated; see also SEM 7/2006: 20). Entrepreneurial activity in Slovenia rose again in 2006. The number of enterprises (companies, sole proprietors, and co-operatives) increased by 3.8% or 3,864 and was 13.0% higher than in 2003 (since comparable data have been available). The improvement in entrepreneurial activity is also indicated by the GEM figures, since the total early entrepreneurial activity rate also rose again last year (see Development Report 2007, pp. 98-99). The significance of micro, small, and medium-sized enterprises is still rising, both in terms of turnover, value-added, and employment. An analysis by activity reveals favourable structural shifts: apart from construction, which has been recording robust growth for quite a while, entrepreneurial activity has seen the strongest expansion in business and financial services - the two service segments characterised by the biggest lag behind the European average (see also Development Report 2007, pp. 29-33). The number of enterprises rose in most activities last year; particularly notable increases were noted in construction and in real estate, renting, and business services. The increase in the number of enterprises in these two sectors accounted for as much as 74.1% of the total increase in the number of enterprises. This proliferation may reflect the favourable developments in the construction sector, which, coupled with the strong economy, also boosted the entrepreneurial opportunities in the real estate, renting, and business services sector. Despite the high comparative bases in both industries, the increases totalled a respective 8.0% and 8.2% as the number of enterprises rose by 1,165 in construction and by 1,698 in real estate, renting, and business services. Entrepreneurial activity in financial intermediation continued to grow vigorously. In 2006, the number of enterprises in this industry rose by 11.6% or 138 (by 53.6% or 436 in 2003-2006). This increase may be attributed to the rise in the marketing of financial services. In the business sector, only mining and manufacturing industries recorded a minor decrease in the number of enterprises last year. Within public services, an appreciable increase was observed in the number of enterprises operating in health and social care (by 20.8% or 181; in 2003-2006 from 649 to 1,053) due to the granting of concessions in both activities. The number of employees in Slovenian enterprises rose by 1.6% in 2006. The number of employees rose in all categories except in large enterprises, where the number of employees declined by 1.4% or nearly 2,800 (see Graph 2). The significance of micro, small, and medium-sized enterprises (SMEs) in the structure of employees thus further increased. In 2006, SMEs employed 66.0% of all employees in enterprises, 2.0 p.p. more than in 2003 (see also table). As the number of large enterprises is declining, their average size measured by the number of employees is increasing, while the size of the average Slovenian enterprise is still shrinking (from 6.1 employees in 2003 to 5.6 in 2006). The small number of employees per enterprise, particularly in micro enterprises (1.6 on average), suggests that their potential for additional hiring is still untapped, which could indicate that incentives for additional employment in this sector of the economy have been too weak. Following the increases in the number of enterprises, Slovenian Enterprises in 2006 Slovenian Economic Mirror IMAD No. 8-9/2007 p. 23 the number of employees also recorded the biggest increases in construction and in real estate, renting, and business services. Looking at the data from the profit and loss accounts of companies, sole proprietors, and cooperatives, we see that the number of employees in these activities alone rose by 8,262 in 2006. Job agencies accounted for around 15% of this rise. The number of employees in distributive trades also rose by a notable 1,520. These increases more than offset the decline in the number of employees in manufacturing (by 2,312) and agriculture (by 768). SMEs also recorded further growth of shares in the structure of turnover and value added. In 2006 enterprises generated almost EUR 70.6 bn of turnover and more than EUR 16.6 bn of value added (a respective 12.0% and 8.7% more than in 2005, in nominal terms). On average, the increase in the turnover of SMEs was 6.4 p.p. higher than in large enterprises. Regarding value added, the difference was 4.4 p.p. in favour of SMEs. The share of turnover generated by SMEs increased by 1.3 p.p. to 63.8%, while the share of these enterprises' value added rose by 1.0 p.p. to 59.7% (see also Graph 1). Labour productivity growth in Slovenian enterprises was higher last year than in 2005. Measured as value added per employee, it rose by a nominal 7.1%1 on average (in 2005 by 4.0%). The increase in SMEs averaged 7.2% (4.0% in 2005), while that in large enterprises was 7.6% (4.1% in 2005; see also table). In 2006, value added per employee thus ranged from EUR 21,127 in micro to EUR 33,538 in large enterprises; in -SMEs, it was on average close to a quarter lower than in large firms. The gaps between the categories are considerably smaller in Slovenia than in Western European countries (see e.g. The Observatory of European SMEs: SMEs in Europe 2003). In 2006, the export propensity of the Slovenian economy totalled 28.6%.2 This means that Slovenian enterprises generated EUR 19.7 bn out of their total net revenues (EUR 68.8 bn) in foreign markets. As expected, large enterprises have the highest export propensity rates since they include Slovenia's largest exporters. Within the SME category, the shares range from 15.3% in micro to 26.1% in medium-sized enterprises (see table). That SMEs also play an important role in generating exports is indicated by the ratio of this group's net revenues from sales in foreign markets to the total revenues of this kind generated by all Slovenian enterprises. In 2006, this percentage totalled 45.3%. The shares of micro and small enterprises topped 11%, while the share of medium-sized enterprises totalled 21.8%. Financial indiscipline, inappropriate tax policy, and excessive bureaucracy continue to be the main limiting factors to entrepreneurship. According to the SPEM Communication Group, a considerable share of enterprises also have problems finding skilled workers (see also SEM 7/2007:11). The business environment is planned to be improved this year by extending the one-stop-shop system to limited liability companies. Furthermore, a law on venture capital companies is about to be adopted. It will enable the creation of the first public venture capital company, with approximately EUR 30 m of capital. This will provide easier access to equity financial resources for entrepreneurs. The lower growth rate in comparison with the average growth in SMEs and large enterprises is due to the change in the structure of employees. 2006 witnessed a drop in the number of employees in large enterprises, which generally achieve higher value added per employee. Export propensity is measured as the ratio of the net revenues from sales in foreign markets to total net revenues. The calculation for 2006 includes the revenues of small entrepreneurs, which did not have to record their revenues from sales in foreign markets in their profit and loss accounts in previous years. For this reason, it was not possible to calculate a figure that would include data of both companies and co-operatives as well as sole proprietors. A comparable calculation of the average for the EU-15 member states, Iceland, Liechtenstein, Norway, and Switzerland for 2003 totals 17% (source: The Observatory of European SMEs: SMEs in Europe 2003). Graph 1: Turnover and value added by size classes of enterprises in 2006, in EUR m 80000 60000 40000 20000 □ Value added □ Tu rnov e r J I J I J I T7777777A SMEs total Large All enterprises Source of data: AJPES, calculations by IMAD. Note: enterprises (companies, co-operatives and sole proprietors) are classified into size classes solely according to the number of employees. Graph 2: Changes in the number of employees by size classes of enterprises 25000 20000 15000 10000 5000 0 -5000 IS Difference in the number of employees 2006/2005 D Difference in the number of employees 2006/2003 ■ Micro Small Medium SMEs total Large Source of data: AJPES, SORS, calculations by IMAD. Note: see Graph 1. All enterprises 0 Micro Small Medium Statistical Appendix Slovenian Economic Mirror IMAD No. 8-9/2007 pp. 1-17 Gross Domestic Product / I Slovenian Economic Mirror IMAD No. 8-9/2007 p. A 2 2003-2006 constant previous year prices, 2007-2009 constant 2006 prices In SIT m In EUR m Real growth rates in % 2007 2008 2009 2007 2008 2009 2003 2004 2005 2006 forecast 2004 2005 2006 forecast VALUE ADDED BY ACTIVITIES AND GROSS DOMESTIC PRODUCT A Agriculture, hunting, forestry 123,669 147,506 139,222 142,730 608 617 627 15.1 -4.4 -3.8 1.0 1.5 1.5 B Fishing 800 875 1,014 996 4 4 4 -7.0 20.4 1.5 0.0 1.0 1.0 C Mining and quarrying 24,674 28,084 30,647 32,719 137 137 1 37 6.8 0.4 7.5 1.0 0.5 -0.5 D Manufacturing 1,278,086 1,385,784 1,441,576 1,538,233 6,927 7,339 7,732 3.7 3.6 8.5 8.5 6.0 5.3 E Electricity, gas and water supply 140,397 153,187 174,594 187,081 769 780 784 6.8 5.7 5.7 -3.0 1.5 0.5 F Construction 264,015 282,539 316,444 394,283 1,892 2,062 2,073 0.0 4.9 15.2 14.0 9.0 0.5 G Wholesale, retail; certain repairs 563,223 628,070 679,306 753,850 3,408 3,553 3,689 4.2 4.5 6.1 7.5 4.3 3.8 H Hotels and restaurants 108,731 115,150 127,161 137,422 634 665 696 -1.1 1.2 2.9 3.0 5.0 4.5 I Transport, storage and communications 357,817 402,669 442,608 500,231 2,221 2,342 2,495 5.3 6.1 9.4 6.5 5.5 6.5 J Financial intermediation 222,430 263,041 278,993 285,593 1,403 1,486 1,584 17.1 10.5 9.8 7.0 6.0 6.5 K Real estate, renting and business services 807,976 886,022 978,785 1,047,398 4,695 4,895 5,118 2.8 3.5 3.7 4.8 4.3 4.5 L Public administration and defence 300,255 337,436 356,269 375,972 1,633 1,665 1,699 4.8 2.9 2.9 1.2 2.0 2.0 M Education 271,188 297,113 328,786 347,104 1,527 1,554 1,583 2.3 3.3 1.7 1.8 1.8 1.8 N Health and social work 247,634 275,279 299,347 310,503 1,345 1,385 1 ,427 5.6 5.2 1.6 1.7 3.0 3.0 O Other community and personal services 167,258 183,431 209,598 219,146 1,002 1,042 1,084 2.8 3.3 1.2 3.5 4.0 4.0 P Private households with employed persons 1,007 1,103 1,436 1,114 5 5 5 -8.1 5.9 -3.5 -4.1 0.0 0.0 VALUE ADDED (A+...+P) 4,879,160 5,387,291 5,805,787 6,274,375 28,210 29,530 30,736 4.4 4.0 6.0 5.9 4.7 4.1 Taxes on products and services 751,700 828,100 883,539 919,784 4,143 4,319 4,485 4.2 4.7 3.9 4.9 4.3 3.8 Less: subsidies on products and services 23,598 29,272 31,323 38,790 140 144 1 47 -2.0 -0.4 10.0 1.0 3.0 2.0 GDP 5,607,262 6,186,119 6,658,003 7,155,369 32,213 33,706 35,073 4.4 4.1 5.7 5.8 4.6 4.1 Source of data: SORS 2003-2006, IMAD's Autumn Forecast 2007. Real growth rates: SORS 2004-2006; IMAD's calculations and Autumn Forecast 2007. Note: a comparison of nominal values is possible under the technical assumption of the SIT/EUR exchange rate = 239.64, which has been used since 2007. Gross Domestic Product / II Slovenian Economic Mirror IMAD No. 8-9/2007 p. A 3 Current prices, in SIT m Current prices, in EUR m Structure in %, current prices, GDP=100 2007 2008 2009 2007 2008 2009 2003 2004 2005 2006 forecast 2004 2005 2006 forecast SUPPLY AND USE OF GROSS NATIONAL DISPOSABLE INCOME 1. GROSS DOMESTIC PRODUCT 5,922,917 6,392,985 6,768,266 7,296,627 33,177 35,953 38,482 100.0 100.0 100.0 100.0 100.0 100.0 2. Net primary income with the rest of the world -46,503 -75,128 -58,391 -78,661 -497 -474 -534 -1.2 -0.9 -1.1 -1.5 -1.3 -1.4 3. GROSS NATIONAL INCOME (1+2) 5,876,414 6,317,857 6,709,875 7,217,966 32,680 35,479 37,949 98.8 99.1 98.9 98.5 98.7 98.6 4. Net current transfers with the rest of the world 6,994 -10,555 -34,525 -50,281 -96 -81 -39 -0.2 -0.5 -0.7 -0.3 -0.2 -0.1 5. GROSS NATIONAL DISPOSABLE INCOME (3+4) 5,883,408 6,307,302 6,675,350 7,167,684 32,585 35,398 37,909 98.7 98.6 98.2 98.2 98.5 98.5 6. Final consumption expenditure 4,424,637 4,703,677 4,964,645 5,299,860 23,750 25,663 27,302 73.6 73.4 72.6 71.6 71.4 70.9 Private consumption 3,275,936 3,473,290 3,653,249 3,896,317 17,522 18,861 20,045 54.3 54.0 53.4 52.8 52.5 52.1 Government consumption 1,148,701 1,230,387 1,311,395 1,403,543 6,229 6,802 7,257 19.2 19.4 19.2 18.8 18.9 18.9 7. GROSS SAVINGS (5-6) 1,458,771 1,603,625 1,710,706 1,867,824 8,834 9,735 10,607 25.1 25.3 25.6 26.6 27.1 27.6 8. GROSS CAPITAL FORMATION 1,510,498 1,770,142 1,846,356 2,068,981 10,000 10,854 11,378 27.7 27.3 28.4 30.1 30.2 29.6 9. SURPLUS ON THE CURRENT ACCOUNT WITH THE ROW (7-8) -51,727 -166,516 -135,650 -201,156 -1,165 -1,118 -770 -2.6 -2.0 -2.8 -3.5 -3.1 -2.0 Source of data: SORS 2003-2006, BS; IMAD's Autumn Spring Forecast 2007. Note: a comparison of nominal values is possible under the technical assumption of the SIT/EUR exchange rate = 239.64, which has been used since 2007. EXPENDITURE STRUCTURE OF GROSS DOMESTIC PRODUCT, 2003-2006 constant previous year prices, 2007-2009 constant 2006 prices In SIT m In EUR m Real growth rates, in % GROSS DOMESTIC PRODUCT (3+4+5) 5,607,262 6,186,119 6,658,003 7,155,369 32,213 33,706 35,073 4.4 4.1 5.7 5.8 4.6 4.1 1. Exports of goods and services 3,157,565 3,653,898 4,145,398 4,788,469 23,259 25,660 28,136 12.5 10.1 12.3 13.4 10.3 9.7 2. Imports of goods and services 3,194,810 3,694,754 4,101,467 4,830,821 23,762 26,173 28,333 13.3 6.7 12.2 14.2 10.1 8.2 3. EXTERNAL BALANCE * (1-2) -37,245 -40,856 43,931 -42,352 -502 -514 -197 -0.5* 2.0* 0.0* -0.6* 0.0* 0.9* 4. FINAL CONSUMPTION 4,195,627 4,557,677 4,836,456 5,168,882 22,952 23,826 24,583 3.0 2.8 4.1 3.8 3.8 3.2 Private consumption 3,112,561 3,373,478 3,566,122 3,800,103 16,946 17,624 18,220 3.0 2.7 4.0 4.2 4.0 3.4 Government consumption (individual and collective) 1,083,066 1,184,199 1,270,334 1,368,779 6,006 6,201 6,363 3.1 3.2 4.4 2.6 3.2 2.6 5. GROSS CAPITAL FORMATION 1,448,880 1,669,298 1,777,616 2,028,838 9,763 10,394 10,687 10.5 0.4 9.9 13.1 6.5 2.8 Gross fixed capital formation 1,368,338 1,531,410 1,666,102 1,872,354 9,110 9,679 9,931 7.3 2.5 8.4 14.5 6.2 2.6 Changes in inventories and valuables* 80,542 137,887 111,514 156,484 653 714 756 0.9* -0.5* 0.6* -0.1* 0.2* 0.1* Source of data: Nominal: SORS 2003-2006, BS; IMAD's Autumn Forecast 2007. Real growth rates: SORS 2004-2006, BS; IMAD's Autumn Forecast 2007. Notes: a comparison of nominal values is possible under the technical assumption of the SIT/EUR exchange rate = 239.64, which has been used since 2007; *as contributions to real GDP growth (in percentage points). Slovenian Economic Mirror IMAD Industrial Production No. 8-9/2007 p. A 4 2002 2003 2004 2005 2006 2006 2007 2006 2007 OH OIII OIV OI OII 6 7 8 9 10 11 12 1 2 3 4 5 6 7 INDUSTRIAL PRODUCTION by sectors *, indices, 2000=100; 2007 data are provisional INDUSTRY, total 105.4 106.9 112.8 116.5 123.7 124.1 122.1 130.6 128.8 133.6 128.7 124.7 108.5 133.0 134.4 139.7 117.6 125.4 121.4 139.6 129.0 135.2 136.7 135.8 C Mining and quarrying 99.2 104.9 97.6 104.2 115 115.1 106.6 134.5 113.5 129.7 112.0 98.2 102.4 119.1 135.5 152.6 115.3 94.1 107.6 138.7 133.6 135.2 120.4 91.9 D Manufacturing 104.8 106.5 111.6 115.6 123.2 124.1 122.5 129.3 129.1 135.3 129.2 125.5 108.0 134.0 134.2 138.9 114.8 125.0 121.8 140.5 129.8 137 139.2 138.6 DA Food, beverages, tobacco 98.6 99.6 89.4 88.0 87.9 89.7 88.4 95.5 79.8 90.9 95.2 88.0 87.3 90.0 88.9 104.7 92.8 76.1 76.2 87.0 89.6 91 92.1 91.7 DB Textiles & textile products 80.5 71.3 61.7 54.1 52.3 49.7 54.3 47.5 56.7 51.6 54.6 60.0 44.3 58.5 51.1 50.2 41.2 55.1 52.4 62.5 52.0 49.8 53.1 54.1 DC Leather & leather products 83.6 72.7 68.2 72.7 76.5 77.8 72.1 77.7 72.8 52.3 81.2 67.0 66.5 82.9 90.3 91.1 51.6 86.0 61.0 71.5 53.2 51.2 52.4 80.3 DD Wood & wood products 94.3 91.0 94.7 100.7 104.1 109.7 104.5 108.4 111.7 124.5 112.6 109.8 88.4 115.2 114.7 119.6 91.0 97.1 110.9 127.1 120.0 128.9 124.6 121.7 DE Paper, publishing, printing 1 100.9 100.6 101.2 104.8 103.9 103.0 102.0 109.5 103.0 106.6 101.8 101.0 97.9 107.1 110.3 113.4 104.8 103.2 93.4 112.3 104.0 110.2 105.7 113.1 DF Coke, petrol. prod., nuclear fuel 2 34.2 36.3 - - - - - 20.9 22.3 18.7 - - 15.8 19.9 21.1 21.6 19.9 22.8 21.2 23.0 18.8 18.4 18.8 20.0 DG Chem., prod., man-made fibers 114.5 128.0 147.5 158.7 179.4 183.3 172.1 189.3 201.1 213.9 180.0 191.6 154.4 170.4 207.4 198.6 161.9 209.4 193.6 200.4 206.8 199.2 235.8 241.5 DH Rubber & plastic products 99.8 103.6 116.5 122.2 130 126.8 136.9 135.9 135.1 141.2 133.4 134.6 124.8 151.4 145.6 149.7 112.3 127.3 125.5 152.6 131.0 146.7 146.0 145.9 DI Non-metal mineral products 100.9 101.6 84.6 78.7 83.6 88.0 90.6 89.2 78.1 92.9 97.8 91.7 85.3 94.9 96.4 98.1 73.1 71.4 72.5 90.5 85.4 97.8 95.4 95.7 DJ Basic metals & fabricated. prod. 108.3 112.0 107.8 116.3 129.8 130.5 131.5 136.6 143.9 147.1 135.9 133.0 120.0 141.5 147.6 146.1 116.1 142.7 135.4 153.6 142.5 148.4 150.3 143.1 DK Machinery & equipment nec. 128.6 120.9 138.5 140.9 149.5 147.8 144.7 161.7 163.5 165.7 156.2 153.6 121.1 159.4 162.4 173.4 149.2 154.0 154.1 182.4 161.6 167.9 167.7 161.3 DL Electrical & optical equipment 110.3 122.8 153.0 157.7 181.5 182.2 183.0 193.6 186.8 199.9 197.4 171.8 152.0 225.1 193.6 210.0 177.2 173.4 175.4 211.6 185.9 211.8 202.1 192.1 DM Transport equipment 106.4 111.7 152.7 184.7 177.7 185.6 149.4 173.3 195.2 206.4 187.8 177.0 75.4 195.8 175.0 180.3 164.6 179.6 184.6 221.5 184.4 216.5 218.4 230.8 DN Manufacturing nec. 106.3 102.6 103.4 108.7 107.5 107.9 107.8 111.1 106.5 106.8 110.2 108.3 97.5 117.7 115.0 122.2 96.0 100.0 104.6 114.9 103.6 111 105.9 105.5 E Electricity, gas & water supply 3 115.3 111.3 132.9 130.9 129.6 122.3 117.7 140.9 126.4 104.2 123.3 121.2 113.1 118.7 130.7 137.5 154.6 142.4 117.5 119.3 108.3 102.4 101.9 111.8 NUMBER OF PERSONS IN PAID EMPLOYMENT IN INDUSTRY 4 Total, in 1000 259.9 255.1 251.7 247.3 243.3 243.0 243.0 244.7 243.3 243.0 243.0 244.7 244.6 245.5 243.6 242.9 242.7 243.3 244.6 245.4 244.0 244.1 244.8 245.0 C Mining & quarrying 5.1 4.8 4.4 4.2 4.0 4.0 4.0 3.9 4.0 4.0 4.0 3.9 3.9 3.8 4.0 4.0 4.0 4.0 3.9 3.9 3.9 3.9 3.9 3.8 D Manufacturing 243.1 238.9 236.1 231.8 227.9 227.5 227.5 229.2 227.9 227.5 227.5 229.2 229.4 230.2 228.0 227.4 227.2 227.8 229.1 229.9 228.7 228.9 229.6 229.7 E Electricity, gas & water supply 11.7 11.4 11.3 11.4 11.4 11.4 11.5 11.5 11.4 11.4 11.5 11.5 11.3 11.5 11.5 11.5 11.5 11.5 11.5 11.5 11.4 11.3 11.3 11.4 CONSTRUCTION 5, real indices of construction put in place, indices 2000=100 Construction 97.9 105.7 108.4 111.7 128.8 120.0 149.0 169.4 128.8 120.0 149.0 169.4 104.0 157.8 143.9 140.4 132.3 174.2 188.1 163.2 157.0 88.7 98.1 125.1 Buildings 104.2 104.9 114.6 126.4 144.2 131.4 165.3 179.6 144.2 131.4 165.3 179.6 123.0 172.7 157.3 152.7 156.1 187.1 191.9 169.9 177.0 107.2 115.3 146.5 Civil engineering 92.1 106.4 102.6 98.0 114.5 109.5 133.8 160.0 114.5 109.5 133.8 160.0 91.5 148.1 131.5 128.9 110.2 162.3 184.6 157.1 138.4 76.6 86.8 111.1 Persons in paid employment in construction 4 99.4 99.1 97.5 102.0 109.6 108.6 113.1 114.3 109.6 108.6 113.1 114.3 114.1 120.3 110.5 112.2 112.9 114.2 114.9 115.2 112.7 112.9 114.4 114.8 Source of data: SORS. Notes: *From February 2004 onwards the industrial production indices have been provisional. For the period up until January 2004 they are calculated according to data on produced quantities of industrial goods. From February 2004 onwards, data on production value have been taken as the basis for the calculation. The value of production is calculated according to the following formula: turnover in the month (x) + value of stocks in the month (x) - value of stocks in the month (x-1).1Enterprises with activity of publishing are excluded; 2data not published because of confidentiality; 3only companies with activity of electricity supply are included. In January 2005, the SORS adopted a new methodology of obtaining data on persons in paid employment. The new source of data for employed and self-employed persons excluding farmers is the Statistical Register of Employment (SRE), while data on farmers are forecast using the ARiMa model based on quarterly figures for farmers from the Labor Force Survey. Data for previous years dating back to January 2000 have also been calculated according to the new methodology. 5The survey covers all larger construction enterprises and some other enterprises that perform construction work. Slovenian Economic Mirror IMAD Production No. 8-9/2007 p. A 5 200b 2007 200b 2007 2002 2003 2004 2005 200b Q|I QIII QIV QI QII 7 8 9 10 11 12 1 2 3 4 5 b 7 TRANSPORT Passenger-km in transport for hire or reward, in m 1,143 1,065 980 848 850 236 180 223 208 222 50 46 85 79 77 66 70 62 76 69 80 73 45 Passenger-km in rail transport, in m 749 778 764 777 788 197 189 210 196 60 58 70 72 71 69 Passenger-km in air transport, in m 794 837 896 1 ,01 9 1,044 251 411 200 183 289 1 47 143 1 21 83 60 57 62 56 65 79 88 1 21 161 Tonne-km in rail transport, in m 3,078 3,274 3,466 3,402 3,373 815 817 942 918 289 259 269 315 321 306 Tonne-km in maritime transport, in m 28,578 28,361 37,047 52,513 49,155 11,545 12,618 11,494 10,813 13,224 4,709 3,955 3,954 4,381 2,846 4,267 4,477 2,949 3,387 4,884 3,967 4,373 4,585 Tonne-km in road transport, in m 6,609 7,040 9,007 11,033 12,112 3,413 2,778 3,020 2,972 - - - - - - - - - - - - - - Urban passenger traffic, in m 103.9 98.4 100.2 97.2 94.0 24.3 14.6 27.7 26.3 23.3 4.0 3.7 6.9 9.1 9.4 9.2 8.7 8.5 9.1 8.3 7.8 7.2 4.1 Airport passengers traffic, in 000 866 922 1,047 1,228 1,339 334 488 282 251 382 1 69 171 1 48 116 88 79 82 78 91 108 123 1 52 184 Harbour freight transport, in 000 t 9,305 10,788 12,063 12,625 15,462 3,877 3,555 4,158 4,282 3,967 1,245 895 1,416 1,426 1,362 1,370 1,197 1,323 1,762 1,091 1,383 1,493 1,113 Transport of gas, million m3 1,007 1,098 1,097 1 ,1 36 - - - - - - - - - - - - - - - - - - - TOURISM, overnight stays, in 000 Total 7,321 7,503 7,589 7,573 7,722 1,814 3,115 1,389 1,472 1,997 1,157 1,209 749 548 407 434 472 497 502 568 619 811 1181 Domestic tourists 3,300 3,327 3,226 3,173 3,233 691 1,226 620 700 786 498 457 271 219 197 203 177 282 242 208 239 339 483 Foreign tourists 4,021 4,175 4,363 4,399 4,489 1,123 1,889 769 771 1,211 659 753 478 329 209 231 296 215 261 359 380 472 698 Health resorts 2,327 2,360 2,417 2,464 2,434 573 853 484 555 627 275 324 255 219 83 183 175 191 189 205 196 225 277 Seaside 2,052 2,010 2,002 1,949 1,871 493 961 216 203 524 367 346 248 118 31 67 47 62 94 139 152 233 376 AGRICULTURE, slaughter in slaughterhouses, in 000 tons Cattle 40.5 43.1 40.1 37.4 37.9 9.0 8.4 11.7 8.0 8.6 2.5 2.9 2.9 3.4 4.0 4.3 2.6 2.5 2.9 3.0 2.9 2.7 2.6 Pigs 37.1 37.3 34.6 31.7 33.6 9.1 7.9 8.4 8.2 8.5 2.6 2.7 2.6 2.7 2.6 3.1 2.7 2.5 2.9 2.9 2.9 2.6 2.7 Poultry 51.4 56.0 52.0 53.4 49.2 12.0 12.3 12.5 13.9 14.3 4.3 4.2 3.8 4.2 4.1 4.1 4.6 4.1 5.2 4.6 4.7 5.0 5.2 Purchase of agricultural products, SIT bn, since 2007 in EURO m 101.6 103.3 102.4 103.7 106.7 25.6 26.1 33.4 101.3 109.7 7.9 8.9 9.3 9.6 10.5 13.3 32.2 31.1 37.9 37.5 38.4 33.8 38.3 FISHING, in tons Catches in marine waters 1459.8 1087.5 815.9 1021.6 736.7 9.0 8.4 11.7 8.0 8.6 84.2 92.7 94.3 91.4 51.8 36.1 83.4 65.3 25.8 39.6 77.8 128.7 51.1 Source of data: SORS. Balance of Payments Slovenian Economic Mirror IMAD No. 8-9/2007 p. A 6 2002 2003 2004 2005 2006 2006 2007 2006 2007 QII QIII QIV QI QII 7 8 9 10 11 12 1 2 3 4 5 6 7 BALANCE OF PAYMENTS, in EUR m Current account 247 -196 -720 -561 -857 91 -261 -51 2 -210 -134 -168 -32 -60 -54 -197 -261 -21 -149 -39 -94 -56 15 -57 Goods 1 -265 -543 -1,009 -1,026 -1,151 -118 -257 -570 -224 -323 -76 -116 -65 -93 -197 -281 -81 -78 -66 -128 -119 -76 -72 Exports 11,082 11,417 12,933 14,599 17,028 4,288 4,168 4,543 4,784 5,028 1,455 1,177 1,537 1,579 1,599 1,365 1,469 1,510 1,805 1,583 1,739 1,706 1,740 Imports 11,347 11,960 13,942 15,625 18,179 4,407 4,425 5,113 5,008 5,351 1,530 1,293 1,602 1,672 1,796 1,645 1,550 1,588 1,870 1,711 1,859 1,782 1,812 Services 620 540 688 849 866 269 299 1 60 233 388 74 115 109 85 28 46 1 08 45 80 99 149 1 40 112 Exports 2,440 2,465 2,783 3,143 3,449 850 1,072 855 855 1,105 360 386 326 292 267 295 307 243 305 349 380 377 446 Imports 1,820 1,925 2,095 2,294 2,584 580 773 695 623 717 285 271 217 207 239 249 1 99 198 225 250 231 237 334 Income -168 -219 -322 -288 -398 -54 -227 -100 -144 -155 -147 -10 -69 -48 -13 -38 -42 -49 -53 -51 -51 -54 -59 Receipts 490 510 530 648 902 232 241 242 217 271 75 78 88 77 72 94 71 70 75 89 92 91 90 Expenditure 657 728 852 936 1,300 286 468 342 361 427 223 88 157 1 25 85 132 114 119 128 139 143 1 44 149 Current transfers 60 26 -76 -97 -173 -6 -75 -2 -74 -44 -19 -21 -35 2 -15 11 -6 -68 0 -15 -34 5 -38 Receipts 500 474 561 738 785 224 165 237 197 227 61 56 48 85 59 93 51 59 86 75 60 91 57 Expenditure 439 449 638 835 958 230 240 238 271 271 80 77 83 83 74 82 57 127 86 89 95 87 95 Capital and financial account 3 46 698 818 1,050 94 504 424 611 662 294 40 170 -107 23 508 -179 385 404 218 42 402 324 Capital account -164 -165 -96 -114 -131 -3 -39 -96 22 -12 -4 -6 -29 -7 -12 -77 12 20 -10 10 -8 -14 0 Financial account 167 211 794 932 1,182 96 543 519 589 674 297 46 199 -100 35 584 -1 91 366 414 207 51 416 323 Direct investment 1,556 -151 224 -43 -207 -71 136 -154 -95 -9 145 -47 38 -48 -194 88 -87 -70 62 -17 -75 83 -112 Domestic abroad -166 -421 -441 -51 6 -718 -201 -164 -21 8 -307 -234 -23 -48 -93 -54 -168 4 -103 -148 -56 -113 -101 -20 -140 Foreign in Slovenia 1,722 270 665 473 512 1 31 300 64 211 225 168 1 131 6 -26 84 16 77 118 96 27 1 03 27 Portfolio investment -69 -223 -637 -1,466 -1,444 -179 -336 -677 -626 -1,198 -76 -271 11 -65 -183 -429 -905 -151 430 -416 -620 -162 233 Financial derivatives 0 0 6 -1 0 -13 -10 -3 2 2 -2 -6 1 2 -3 2 4 5 -4 1 0 0 -2 -6 Other investment 565 849 945 2,639 1,564 60 63 954 1,253 1,894 -176 110 129 84 324 545 610 715 -72 585 811 498 77 Assets -538 -730 -1,308 -1,459 -1,936 -934 -384 -264 -2,234 -18 37 -27 -393 83 -23 -324 -751 -741 -742 -671 582 71 -382 Commercial credits -135 -116 -237 -226 -435 -186 -77 120 -386 -175 -35 77 -119 -90 -57 267 -28 -161 -197 -75 -11 -89 25 Loans -174 -223 -281 -340 -733 -190 -87 -297 -351 -435 -44 28 -71 -50 -75 -172 -1 8 -75 -258 -45 -203 -187 -209 Currency and deposits -157 -323 -720 -872 -747 -546 -194 -90 -1,521 580 118 -126 -187 219 103 -412 -773 -499 -248 -547 793 334 -187 Other assets -71 -68 -69 -21 -21 -1 2 -26 3 23 12 -3 -7 -16 4 6 -7 68 -6 -39 -3 3 13 -11 Liabilities 1,104 1,579 2,252 4,098 3,500 994 446 1,218 3,488 1,912 -213 137 522 1 348 869 1 ,362 1,455 671 1,256 229 427 459 Commercial credits 95 59 214 291 468 133 63 282 280 33 75 -64 52 1 31 117 34 -161 212 229 -36 80 -1 1 44 Loans 838 1,123 1,671 2,731 2,064 872 357 467 15 1,548 -42 148 252 -43 299 210 1 42 -54 -72 1,021 294 232 221 Deposits 130 428 335 1,053 998 1 39 448 3,208 338 -243 61 221 -82 -69 599 1 ,406 1,282 521 279 -140 1 99 188 Other liabilities 39 -31 33 23 -30 -13 -12 21 -16 -7 -2 -7 -2 -5 1 26 -25 16 -6 -9 -5 6 7 International reserves 2 -1,885 -264 256 -1 89 1,281 295 684 394 55 -11 409 254 20 -68 86 376 1 85 -123 -7 55 -65 -1 132 Statistical error -250 150 22 -257 -194 -185 -243 88 -401 -528 -126 -8 -110 1 61 174 -246 200 -236 -365 -123 13 -41 8 -267 EXPORTS AND IMPORTS BY END-USE OF PRODUCTS, in EUR m Export of investment goods 1,542 1,634 1,873 2,058 2,492 615 622 705 N/A N/A 222 168 231 224 245 236 N/A N/A N/A N/A N/A N/A N/A Intermediate goods 5,245 5,463 6,342 6,990 8,429 2,139 2,094 2,203 N/A N/A 720 604 770 772 810 621 N/A N/A N/A N/A N/A N/A N/A Consumer goods 4,175 4,188 4,568 5,349 5,840 1,453 1,366 1,589 N/A N/A 485 367 515 560 532 497 N/A N/A N/A N/A N/A N/A N/A Import of investment goods 2,072 2,322 2,494 2,624 3,076 723 746 978 N/A N/A 245 204 297 276 344 358 N/A N/A N/A N/A N/A N/A N/A Intermediate goods 6,816 7,079 8,348 9,534 11,064 2,713 2,738 2,981 N/A N/A 972 800 966 1,010 1,072 900 N/A N/A N/A N/A N/A N/A N/A Consumer goods 2,686 2,838 3,301 3,646 4,172 1 ,01 1 986 1,183 N/A N/A 320 289 376 399 409 375 N/A N/A N/A N/A N/A N/A N/A Sources of data: BS, SORS. Notes: 'exports and imports (F.O.B.) include also the adjustment for exports and imports of goods by ITRS and duty-free shops reports; 2 reserve assets of the BS. Monetary Indicators Slovenian Economic Mirror IMAD No. 8-9/2007 p. A 7 2005 2006 2006 2007 December 4 1 5 1 6 1 7 1 8 1 9 1 10 1 11 1 12 1 2 3 4 5 6 7 MONETARY SYSTEM - CONSOLIDATED BALANCE SHEET OF MONETARY FINANCIAL INSTITUTIONS, end of the month, in SIT bn; since 1 January 2007 in EUR m Banknotes and coins 217.3 152.8 220.9 216.5 220.7 212.1 210.3 213.1 214.0 197.6 172.8 2,709 2,684 2,689 2,721 2,737 2,769 2,801 Overnight deposits at other MFI 1,491.0 1,694.1 1,535.3 1,571.7 1,598.7 1,595.6 1,594.9 1,605.7 1,590.4 1,608.0 1,694.6 6,902 6,866 6,867 6,887 7,056 7,194 7,257 Overnight deposits of NFI at the BS 3.1 5.0 6.5 4.9 3.6 3.6 5.7 4.8 6.0 4.5 5.0 47 37 36 37 40 41 50 Overnight deposits of other government sector (central government excluded) at the BS 3.3 1.3 2.1 2.1 1.8 2.2 2.1 2.1 1.9 1.9 1.3 6 7 5 5 6 7 8 Total overnight deposits at the BS 6.4 6.4 8.5 7.0 5.3 5.9 7.8 6.9 7.9 6.4 6.4 53 43 41 43 47 48 58 Deposits with agreed maturity at the BS 0.3 0.0 0.4 0.7 0.5 0.5 - - - - - - - - - - - - Deposits with agreed maturity at other MFI 1,688.0 1,747.3 1,669.7 1,688.4 1,678.2 1,710.8 1,692.2 1,735.0 1,728.8 1,744.1 1,746.4 7,379 7,441 7,607 7,514 7,578 7,694 7,967 Deposits at redeemable notice 164.9 197.5 172.0 168.8 179.8 166.0 171.5 182.7 184.6 188.4 197.5 962 918 985 991 1,087 1,133 1,171 Debt securities, units/shares of money market funds and repos 9.5 9.2 9.7 9.1 6.7 7.0 7.7 7.3 7.5 7.9 8.1 29 32 46 52 52 61 62 Banknotes and coins and demand deposits 1,713.9 1,853.3 1,764.8 1,795.3 1,824.8 1,813.5 1,812.9 1,825.7 1,812.3 1,812.0 1,873.7 9,664 9,593 9,597 9,650 9,840 10,011 10,116 Banknotes and coins and deposits with maturity of up to two years 3,524.6 3,798.1 3,606.8 3,653.2 3,683.3 3,690.7 3,676.6 3,743.4 3,725.6 3,744.5 3,817.6 18,005 17,952 18,189 18,156 18,506 18,838 19,254 Banknotes and coins and instruments with maturity of up to two years 3,534.2 3,807.2 3,616.5 3,662.3 3,690.0 3,697.7 3,684.2 3,750.7 3,733.1 3,752.4 3,825.8 18,035 17,984 18,235 18,208 18,557 18,899 19,316 SELECTED CLAIMS OF OTHER MFI ON DOMESTIC SECTORS, end of the month, in SIT bn; since 1 January 2007 in EUR m Claims of the BS on central government 17.6 16.6 16.9 16.9 16.9 16.9 16.8 16.9 16.8 16.8 16.6 69 69 69 68 68 68 68 Central government (S. 1311) 780.5 776.6 773.6 777.2 774.9 774.5 777.8 782.2 792.5 787.7 776.6 3,184 3,219 2,944 2,748 2,574 2,465 2,408 Other government (S. 1312, 1313, 1314) 17.8 24.9 23.8 23.4 23.2 23.4 20.6 20.4 21.5 21.8 24.9 108 106 107 105 107 107 107 Households (S. 14, 15) 976.0 1,289.8 1,108.6 1,134.9 1,157.3 1,180.4 1,203.7 1,229.2 1,252.3 1,277.6 1,289.8 5,428 5,488 5,633 5,748 5,892 6,015 6,157 Non-financial corporations (S. 11) 2,620.9 3,245.5 2,882.7 2,910.3 2,951.5 2,988.9 3,025.0 3,096.8 3,157.9 3,214.5 3,245.5 14,086 14,250 14,660 15,142 15,426 15,794 16,280 Non-monetary financial institutions (S. 123, 124, 125) 230.9 365.6 263.1 278.1 283.0 287.5 296.5 303.5 325.7 338.3 368.3 1,554 1,563 1,574 1,761 1,747 1,905 2,028 Monetary financial institutions (S. 121, 122) 1,408.2 1,157.1 1,411.4 1,441.9 1,414.1 1,293.7 1,236.0 1,251.2 1,265.8 1,244.9 1,158.7 3,505 2,770 2,267 2,033 2,257 2,203 2,209 Claims on domestic sectors, TOTAL In domestic currency 2,099.2 2,307.3 2,132.1 2,114.1 2,149.9 2,121.8 2,136.1 2,152.6 2,200.9 2,223.7 2,264.6 21,761 21,634 21,726 22,297 23,089 23,558 24,146 In foreign currency 2,199.4 3,109.6 2,539.0 2,618.8 2,716.2 2,748.5 2,814.9 2,894.6 2,992.1 3,048.8 3,109.6 1,048 1,100 1,160 1,248 1,335 1,456 1,560 Securities, total 1,791.0 1,442.6 1,792.4 1,837.0 1,741.8 1,682.7 1,612.7 1,638.9 1,627.3 1,617.7 1,449.5 5,055 4,662 4,299 3,992 3,577 3,475 3,483 SELECTED OBLIGATIONS OF OTHER MFI ON DOMESTIC SECTORS, end of the month, in SIT bn; since 1 January 2007 in EUR m Deposits in domestic currency, total 2,608.5 2,904.1 2,685.9 2,704.9 2,749.2 2,752.1 2,773.4 2,846.7 2,886.7 2,892.4 2,902.9 17,823 17,912 17,914 18,066 18,367 18,446 18,880 Overnight 987.0 1,178.1 1,003.6 1,032.6 1,073.0 1,056.9 1,057.6 1,067.4 1,061.9 1,074.0 1,178.1 6,645 6,598 6,648 6,676 6,849 6,953 7,047 With agreed maturity - short-term 1,175.5 1,252.9 1,233.9 1,236.8 1,225.4 1,257.0 1,270.0 1,323.3 1,361.3 1,353.8 1,251.2 7,673 7,837 7,639 7,758 7,777 7,592 7,867 With agreed maturity - long-term 309.9 291.9 291.1 283.4 285.2 282.9 286.1 286.9 297.2 291.3 292.4 2,486 2,492 2,560 2,569 2,573 2,693 2,728 Short-term deposits redeemable at notice 136.0 181.2 157.2 152.1 165.6 155.3 159.8 169.1 166.3 173.3 181.2 1,019 985 1,067 1,063 1,168 1,208 1,238 Deposits in foreign currency, total 1,349.9 1,454.0 1,367.2 1,417.4 1,432.4 1,424.9 1,420.9 1,433.9 1,424.7 1,449.2 1,454.7 634 614 607 597 615 610 605 Overnight 395.6 552.7 546.0 559.0 556.9 559.1 565.0 562.8 555.7 576.3 552.7 311 293 285 264 280 274 270 With agreed maturity - short-term 623.7 544.7 488.2 522.4 533.6 521.4 506.3 517.6 514.9 519.0 545.5 240 239 237 251 248 249 242 With agreed maturity - long-term 295.2 318.5 295.4 302.6 307.8 311.1 316.1 319.2 316.9 318.3 318.5 64 64 62 60 61 60 61 Short-term deposits redeemable at notice 35.4 38.0 37.6 33.4 34.1 33.3 33.6 34.3 37.3 35.7 38.0 19 18 23 22 26 27 32 Source of data: Bank of Slovenia. Slovenian Economic Mirror IMAD Prices No. 8-9/2007 p. A 8 2006 2007 2006 2007 Indices, 2005 = 100 2002 2003 2004 2005 2006 QII QIII QIV QI QII 8 9 10 11 12 1 2 3 4 5 6 7 8 GROWTH IN SELECTED PRICE INDICATORS CPI 89.2 94.2 97.6 100.0 102.5 102.8 103.2 103.2 103.1 105.8 103.3 103.6 102.8 103.1 103.6 102.9 102.7 103.8 104.9 106.1 106.5 106.6 106.9 Food, non-alcoholic beverages 95.9 100.3 100.8 100.0 102.3 102.0 102.3 103.1 105.3 108.7 102.6 102.7 101.9 103.4 104.0 105.7 104.7 105.5 107.5 109.3 109.2 109.5 109.7 Alcoholic beverages, tobacco 80.8 91.0 96.3 100.0 103.7 101.9 105.2 106.2 107.1 108.0 105.1 105.2 106.3 106.1 106.2 106.9 107.0 107.4 107.6 108.1 108.2 113.9 114.0 Clothing and footwear 93.5 99.3 101.0 100.0 99.5 104.8 94.0 105.5 95.4 105.7 90.5 99.2 104.9 106.2 105.5 92.9 93.3 100.1 103.4 106.8 107.0 95.0 94.2 Housing, water, electricity, gas 80.2 85.4 91.7 100.0 105.3 106.1 107.0 103.8 104.2 107.1 106.8 107.6 103.3 103.8 104.2 103.6 103.9 105.1 106.7 107.0 107.7 108.5 110.3 Furnishings, household equip. 90.1 94.3 96.5 100.0 104.1 102.9 105.2 106.2 107.0 108.3 105.6 106.0 106.1 106.1 106.4 106.9 106.7 107.5 108.0 108.2 108.8 108.8 109.1 Medical, pharmaceutical products 93.4 98.8 100.3 100.0 98.3 98.5 98.0 98.3 99.9 99.9 98.1 97.9 98.0 98.2 98.7 99.2 99.7 100.8 100.0 99.7 99.9 100.0 98.7 Transport 88.0 92.1 97.4 100.0 101.3 101.8 103.0 100.3 99.7 102.6 103.8 103.0 100.3 100.1 100.6 99.8 99.3 100.1 101.6 102.9 103.2 102.9 102.2 Communications 98.5 99.8 100.0 100.0 100.3 99.2 100.4 101.5 100.0 99.6 99.6 102.2 102.2 101.1 101.1 101.5 99.3 99.2 99.3 99.7 99.7 100.6 100.8 Recreation and culture 89.8 94.2 97.7 100.0 102.1 101.7 105.8 101.1 102.5 104.3 107.8 103.3 100.6 100.9 101.8 102.3 102.9 102.3 102.0 104.4 106.4 111.0 113.0 Education 83.5 87.1 93.4 100.0 103.1 104.1 103.5 102.9 103.1 104.7 104.1 102.1 102.9 102.9 102.9 103.0 103.1 103.0 103.0 105.6 105.6 105.6 105.6 Catering services 84.9 91.1 95.8 100.0 104.5 104.0 105.4 106.3 109.2 110.8 105.3 105.8 106.0 105.5 107.4 108.9 109.3 109.6 110.3 111.0 111.1 111.8 112.7 Miscellaneous goods & services 88.8 94.5 98.1 100.0 104.1 103.9 104.4 105.9 106.4 107.1 104.2 104.6 105.7 105.8 106.1 106.2 106.5 106.7 106.7 107.2 107.3 107.8 108.3 HCPI 89.1 94.2 97.6 100.0 102.5 102.8 103.2 103.3 103.4 106.2 103.4 103.7 102.9 103.2 103.7 103.1 103.0 104.1 105.3 106.5 106.8 106.7 106.9 Producer price indices (domestic market) 91.0 93.3 97.4 100.0 102.4 102.2 102.6 103.2 105.9 107.4 102.3 102.9 103.1 103.1 103.6 104.3 106.5 106.9 107.1 107.4 107.7 107.8 107.7 Intermediate goods 89.6 91.4 96.9 100.0 103.5 103.3 104.2 104.7 109.1 111.7 103.7 104.7 104.4 104.5 105.3 106.1 110.4 110.7 111.3 111.8 112.1 112.3 112.1 Capital goods 94.8 94.7 97.0 100.0 100.2 99.6 100.5 100.8 101.2 101.1 100.4 100.9 100.9 100.7 100.9 101.4 101.0 101.3 101.4 101.0 100.9 101.6 101.4 Consumption goods 91.8 95.3 98.1 100.0 101.5 101.6 101.2 102.1 103.1 103.6 101.1 101.2 102.1 101.9 102.3 102.8 103.0 103.4 103.2 103.5 104.0 103.8 103.8 PRICE CONTROL1 Energy prices 81.1 83.3 89.4 100.0 108.0 109.6 111.9 105.9 102.6 109.5 112.7 112.6 106.2 105.5 105.9 103.6 100.4 103.7 107.5 110.3 110.7 111.8 109.8 Oil products 78.9 80.2 86.7 100.0 110.3 113.4 116.3 105.7 101.4 110.9 117.5 117.0 106.5 105.1 105.6 102.9 98.4 103.0 107.5 112.3 112.9 113.5 111.0 Electricity for households 90.4 93.8 98.6 100.0 101.6 100.8 102.0 102.7 101.7 107.1 102.7 102.7 102.7 102.7 102.7 101.9 101.0 102.4 107.1 107.1 107.1 - - Basic utilities 83.4 88.6 96.2 100.0 97.4 100.9 100.9 87.8 93.8 94.7 100.9 100.9 83.3 89.3 90.7 92.5 94.4 94.4 94.7 94.7 94.7 94.7 101.7 Transport & communications 91.5 95.2 97.9 100.0 101.5 101.6 101.6 101.6 101.9 102.2 101.6 101.6 101.6 101.6 101.6 101.7 101.8 102.2 102.2 102.2 102.2 102.2 102.2 Other controlled prices 86.0 89.8 95.7 100.0 102.6 102.2 103.2 103.3 104.9 104.9 103.2 103.2 103.2 103.3 103.3 104.2 105.1 105.3 105.3 104.7 104.7 105.5 107.1 Direct control - total 82.5 85.5 91.5 100.0 107.0 107.3 110.2 106.9 105.6 110.8 109.5 113.3 106.5 106.9 107.3 106.0 104.1 106.6 109.4 111.3 111.7 112.6 112.7 Source of data: SORS, calculations and estimates IMAD. Note: 1 the structure of groups varies, data published are not directly comparable to those published previously. The electricity market was liberalized on 1 July 2007. Data from July 2007 onwards are not comparable. Interest Rates and Investment Slovenian Economic Mirror IMAD No. 8-9/2007 p. A 9 End year 2006 2007 2002 I 2003 I 2004 | 2005 | 2006 7 1 8 1 9 1 10 1 11 1 12 1 1 1 2 1 3 4 1 5 1 6 1 7 1 8 INTEREST RATES OF MONETARY FINANCIAL INSTITUTIONS, % New deposits in domestic currency Households Overnight deposits - - - 0.47 0.32 0.30 0.30 0.28 0.27 0.28 0.27 0.33 0.33 0.33 0.34 0.34 0.34 0.35 - Time deposits with maturity of up to one year - - - 3.34 2.96 2.86 2.81 2.82 2.80 2.81 2.84 2.83 2.91 3.01 3.07 3.15 3.26 3.36 - New loans to households in domestic currency Housing loans 1-5 year fixed interest rate - - 4.18 4.99 4.56 4.74 4.57 4.60 4.42 5.19 4.29 5.16 5.44 5.50 5.35 5.37 5.36 5.79 - New loans to non-financial corporations in domestic currency Loan over EUR 1 million 1-5 year fixed interest rate - 8.58 5.36 5.23 4.64 4.66 4.47 3.61 4.66 5.04 5.11 5.49 6.53 - - 4.86 5.12 6.49 - INTEREST RATES OF THE EUROPEAN CENTRAL BANK, % Main refinancing operations | 3.21 2.25 2.00 2.02 2.78 2.75 3.00 3.00 3.25 3.25 3.50 3.50 3.50 3.75 3.75 3.75 4.00 4.00 - INVESTMENT, outlays, in SIT m, since 2007 thousand EURO Total 524,626 610,923 760,662 772,675 824,957 55,592 56,808 62,610 58,911 86,544 147,057 283,943 287,486 252,076 387,674 377,167 375,300 483,585 460,832 Industry total 114,794 136,349 184,271 181,466 164,226 12,797 9,218 11,634 12,008 16,069 22,452 54,811 66,902 68,461 62,123 71,435 60,840 81,370 81,419 Energy sector 36,959 31,538 39,105 38,701 36,856 2,995 2,119 3,460 2,294 4,832 7,335 11,771 26,320 12,892 9,072 9,797 14,671 13,194 13,996 Manufacturing 77,835 104,811 145,163 142,765 127,370 9,802 7,099 8,174 9,714 11,237 15,117 43,040 40,582 55,568 53,051 61,639 46,169 68,176 67,423 Construction* 8,937 11,350 21,470 129,609 170,369 11,561 15,119 14,507 13,065 14,565 43,112 97,608 68,472 -120,858 13,463 44,591 34,762 11,816 4,168 Transport and communications* 58,244 39,779 54,720 63,689 57,978 3,935 5,076 7,245 3,401 9,931 4,165 11,029 32,975 194,924 142,273 120,681 86,677 211,395 185,566 Trade 66,950 67,852 80,272 93,793 82,460 5,304 6,325 4,527 6,229 4,926 6,846 16,599 12,242 25,851 34,770 29,893 32,765 36,881 34,166 Hotels and restaurants 9,144 14,665 1 4,206 15,641 12,356 1,298 1,319 816 439 722 1,483 7,841 5,197 7,092 5,981 2,300 13,813 10,544 3,008 Financial and technical services 40,339 48,049 52,291 48,192 47,530 5,117 4,199 2,560 3,805 4,297 4,655 11,926 22,401 9,369 14,409 20,320 14,473 27,755 20,885 Other 226,220 292,876 353,432 240,285 290,038 15,580 15,552 21,321 19,964 36,034 64,344 84,129 79,297 67,236 114,655 87,946 131,970 103,824 131,620 In economic infrastructure, total1 162,078 177,777 223,096 180,751 197,802 13,319 16,649 16,725 13,348 19,366 49,344 89,490 105,197 64,170 57,115 68,286 76,713 202,593 107,145 Energy sector 36,959 46,562 46,469 42,212 36,857 2,995 2,119 3,460 2,294 4,832 7,335 11,771 26,320 12,892 9,072 9,797 14,671 13,194 13,996 Electricity supply 25,132 26,903 23,107 24,251 22,736 1,963 1,200 2,516 1,304 3,331 3,946 6,664 21,210 7,479 5,503 7,270 11,458 9,714 10,160 Gas supply 1,380 1,282 689 678 729 56 80 58 26 111 117 229 242 335 107 100 268 106 485 Hot water supply 1,168 2,725 2,027 2,564 2,640 240 125 216 240 346 714 1,540 898 640 350 290 267 890 634 Cold water supply 9,280 15,652 20,645 14,720 10,752 737 714 670 724 1,044 2,558 3,337 3,970 4,439 3,112 2,137 2,679 2,484 2,717 Transport infrastructure 125,119 131,215 176,627 138,539 160,945 10,324 14,530 13,265 11,054 14,534 42,009 77,719 78,876 51,278 48,043 58,489 62,041 189,399 93,149 Railways 16,924 1,717 1,822 2,615 6,677 558 1,487 1,653 77 493 70 590 1,360 897 727 1,406 1,629 515 1,204 Air traffic 618 1,774 2,660 3,462 2,120 49 469 96 123 139 502 1,508 2,028 1,515 2,064 2,802 4,143 3,147 2,251 Roads, motorways 81,467 103,849 141,157 106,040 136,142 9,224 11,516 11,064 10,310 13,150 40,435 72,863 62,228 46,038 41,167 40,883 49,348 182,016 84,437 Postal and telecom services 24,573 20,923 26,717 24,143 13,609 292 770 372 432 399 613 1,717 1,402 1,780 2,196 6,750 5,459 2,298 1,240 Other 1,538 2,952 4,271 2,279 2,397 201 287 80 112 354 389 1,041 11,858 1,048 1,889 6,647 1,462 1,424 4,017 Sources of data: SORS, BS, AP. Notes: *a large infrastructure company has been included in the construction activity since April 2007 (change of main activity from F to I). 1Outlays collected on the basis of data for individual investors. Slovenian Economic Mirror IMAD Labour Market No. 8-9/2007 p. A 10 Number in thousand 2002 2003 2004 2005 2006 2006 2007 2006 2007 Q II Q III Q IV Q I Q II 7 8 9 10 11 12 1 2 3 4 5 6 7 A FORMAL LABOUR FORCE (A=B+E) 911.4 899.1 900.3 905.0 910.7 910.9 909.6 914.0 919.1 923.5 910.8 908.2 909.8 915.0 915.5 911.3 918.0 919.2 920.0 921.6 923.6 925.4 924.5 B PERSONS IN FORMAL EMPLOYMENT (C+D) 808.7 801.4 807.5 813.1 824.8 823.6 826.6 834.5 841.8 852.7 825.2 825.2 829.5 833.7 836.7 833.0 838.0 841.5 845.8 849.0 852.9 856.2 854.4 In agriculture, forestry, fishing 45.4 37.7 41.2 38.7 38.9 39.1 38.7 38.5 43.1 42.0 38.8 38.7 38.7 38.6 38.6 38.4 43.0 43.1 43.1 41.9 42.0 42.0 41.0 In industry, construction 323.3 318.4 313.9 310.9 313.3 312.2 315.1 317.6 317.4 322.2 314.5 314.7 316.2 317.9 318.9 315.9 316.2 317.8 318.3 320.5 322.3 323.9 324.3 Of which: in manufacturing 243.1 238.9 236.1 233.7 227.9 227.5 227.5 229.2 229.4 230.2 227.4 227.2 227.8 229.1 229.9 228.7 228.9 229.6 229.7 230.0 230.2 230.3 229.8 in construction 63.4 63.3 62.2 61.7 69.9 69.3 72.2 72.9 72.8 76.8 71.6 72.0 72.8 73.3 73.5 71.9 72.1 73.0 73.3 75.3 76.8 78.3 79.1 In services 440.0 445.2 452.3 463.5 472.6 472.3 472.8 478.4 481.3 488.5 471.9 471.8 474.7 477.2 479.2 478.7 478.8 480.7 484.4 486.6 488.6 490.3 489.1 Of which: in public administration 45.9 47.7 49.9 49.1 50.2 50.4 50.3 50.1 49.7 50.1 50.5 50.3 50.2 50.3 50.2 49.9 49.8 49.7 49.7 49.9 50.1 50.2 50.2 in education, health-services, social work 101.6 102.7 105.0 106.5 109.1 109.3 108.6 110.0 109.9 110.2 108.2 108.0 109.5 109.9 110.2 109.8 109.5 109.9 110.2 110.4 110.1 110.2 109.0 C FORMALLY EMPLOYED 1 721.4 722.1 724.4 731.6 741.6 740.6 743.4 750.7 753.1 764.7 742.1 742.0 746.1 750.1 752.9 749.2 749.5 752.9 757.0 761.3 764.9 768.1 767.0 In enterprises and organisations 654.6 656.0 658.7 666.2 675.1 674.2 675.9 682.6 685.8 695.0 674.7 674.7 678.2 681.6 684.3 681.7 682.8 685.6 689.0 692.4 695.1 697.5 696.2 By those self-employed 66.8 66.2 65.6 65.4 66.5 66.4 67.5 68.2 67.3 69.8 67.3 67.3 67.9 68.5 68.6 67.5 66.7 67.3 68.0 68.9 69.8 70.6 70.8 D SELF-EMPLOYED AND FARMERS 87.3 79.2 83.1 81.5 83.3 83.1 83.2 83.7 88.7 87.9 83.1 83.2 83.5 83.6 83.8 83.8 88.5 88.6 88.8 87.8 88.0 88.1 87.3 E REGISTERED UNEMPLOYMENT 102.6 97.7 92.8 91.9 85.8 87.3 83.0 79.5 77.3 70.9 85.6 83.1 80.2 81.3 78.8 78.3 80.0 77.7 74.2 72.6 70.7 69.3 70.1 Female 52.5 51.6 49.3 49.4 47.0 47.9 46.3 43.6 42.0 39.3 47.9 46.4 44.6 44.9 43.3 42.6 43.2 42.1 40.7 40.2 39.2 38.5 39.3 By age: under 26 24.7 25.5 24.3 22.2 18.2 18.9 16.4 16.0 14.0 11.6 17.8 16.6 14.8 16.8 15.8 15.2 15.1 14.2 12.8 12.2 11.5 11.1 11.1 older than 40 50.7 43.1 39.7 40.1 39.7 40.1 39.3 37.9 38.7 37.2 39.6 39.3 38.9 38.2 37.6 37.7 39.0 38.8 38.1 37.7 37.2 36.7 36.9 Unskilled 48.2 43.2 38.6 37.5 33.7 34.3 32.2 30.8 30.4 27.7 32.8 32.3 31.6 31.1 30.6 30.8 31.6 30.7 29.0 28.2 27.7 27.1 27.2 For more than 1 year 55.8 47.5 42.9 43.4 41.9 42.4 41.5 40.2 38.8 36.7 41.9 41.3 41.2 41.0 39.9 39.7 39.6 39.0 37.9 37.4 36.8 36.0 35.8 Those receiving benefits 24.4 24.3 22.3 23.3 22.7 23.6 22.4 19.4 13.0 16.8 22.9 22.7 21.7 19.9 19.4 18.9 19.9 19.1 18.3 17.2 16.9 16.3 n.p. F RATE OF REGISTERED UNEMPLOYMENT, E/A, in % 11.3 10.9 10.3 10.2 9.4 9.6 9.1 8.7 8.4 7.7 9.4 9.1 8.8 8.9 8.6 8.6 8.7 8.4 8.1 7.9 7.7 7.5 7.6 G FLOWS OF FORMAL LABOUR FORCE -2.3 -10.2 1.5 8.0 5.2 3.6 -2.5 1.6 8.7 5.4 -1.5 -2.5 1.5 5.3 0.5 -4.2 6.7 1.2 0.8 1.6 2 1.8 -0.9 New unemployed first job seekers 21.4 25.4 26.0 21.7 18.6 3.2 3.5 8.2 2.9 2.4 1.0 1.0 1.5 5.8 1.4 1.0 1.3 0.8 0.9 1.0 0.7 0.6 0.7 Redundancies 66.0 68.8 69.6 67.2 63.8 1 4.4 15.2 14.8 15.4 11.6 5.6 4.5 5.1 4.8 5.0 5.0 7.6 3.8 4.0 4.0 4 3.7 4.9 Registered unemployed who found employment 52.2 50.5 54.3 53.9 57.4 1 4.7 13.5 13.6 14.8 12.1 3.5 4.6 5.3 5.1 5.0 3.5 5.1 4.4 5.2 4.2 4.1 3.7 3.0 Other unemployed erased out of register 39.9 47.3 46.6 33.1 39.2 9.4 9.8 11.3 7.6 6.9 2.4 3.4 4.1 4.4 3.9 3.1 2.0 2.5 3.1 2.4 2.5 2 1.6 Change in number of work permits for foreigners 2.1 3.5 -0.5 3.9 7.8 3.3 1.6 0.3 3.9 4.9 0.5 0.8 0.3 0.4 0.1 -0.2 0.3 1.2 2.5 3.6 1.7 -0.5 2.2 Retirements 2 15.9 16.1 16.4 16.7 18.7 3.9 4.5 6.1 4.7 4.3 1.2 1.0 2.4 2.2 2.0 1.9 1.8 1.6 1.2 1.5 1.4 1.3 1.4 Deaths 2 2.6 2.6 2.5 2.3 2.5 0.6 0.6 0.6 0.6 0.6 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 Others who found employment 2 30.4 24.9 39.5 32.6 37.3 10.0 6.3 9.8 13.8 8.7 0.4 -0.2 6.0 5.4 4.5 -0.2 8.9 3.3 1.6 0.6 3.6 4.9 -0.6 H JOB VACANCIES 3 11.6 12.1 14.1 16.9 19.0 20.5 18.9 17.4 20.5 21.0 17.7 16.4 22.7 19.5 16.9 15.9 20.0 17.8 23.6 20.6 19.3 23.1 18.8 For fixed term, in % 74.4 73.8 73.7 75.6 75.3 74.9 77.6 77.5 76.7 77.5 75.5 78.5 78.7 77.9 78.0 76.4 77.1 75.1 77.5 76.9 79.1 76.6 78.4 WORK PERMITS FOR FOREIGNERS 35.3 39.7 39.7 41.6 48.3 48.1 50.0 50.9 53.4 59.3 49.4 50.2 50.5 50.9 51.0 50.7 52.2 53.4 54.7 58.3 60.1 59.5 61.7 As % of labour force (I/A) 3.9 4.4 4.4 4.6 5.3 5.3 5.5 5.6 5.8 6.4 5.4 5.5 5.5 5.6 5.6 5.6 5.7 5.8 5.9 6.3 6.5 6.4 6.7 Sources of data: SORS, PDII, ESS. Notes: 1In January 2005, the SORS adopted new methodology of obtaining data on persons in paid employment. The new source of data for employed and self-employed persons excluding farmers is the Statistical Register of Employment (SRE), while data on farmers are forecast using the ARIMA model based on quarterly figures for farmers from the Labour Force Survey. Data for previous years dating back to January 2000 have also been calculated according to the new methodology. 2Estimated by IMAD, based on data by PDII and ESS; 3according to ESS. Wages, Competitiveness, Exchange Rate Slovenian Economic Mirror IMAD No. 8-9/2007 p. A 11 i 2004 i 2005 i 2006 2006 2007 2006 2007 Qiii I Qiv Qi I Qii 7 1 8 1 9 1 10 1 11 1 12 1 2 3 4 5 6 7 GROSS WAGE PER EMPLOYEE, in SIT, since 2007 in EUR Total 264,463 277,279 290,635 286,917 309,709 1,238 1,252 283,047 290,148 287,557 293,121 333,799 302,207 1,250 1,213 1,252 1,237 1,264 1,254 1,263 Private sector (A to K) 245,498 258,714 272,709 267,438 294,601 1,168 1,178 262,729 271,571 268,015 274,204 324,626 284,972 1,182 1,137 1,184 1,164 1,192 1,179 1,180 Agriculture, fishing (A, B) 215,981 224,253 236,822 234,180 255,337 1,010 1,036 227,255 236,221 239,065 246,013 275,462 244,538 1,030 978 1,021 1,026 1,057 1,026 1,029 A Agriculture 216,252 224,225 236,681 234,330 255,564 1,010 1,036 227,341 236,385 239,263 246,477 275,255 244,960 1,030 978 1,023 1,025 1,058 1,027 1,029 B Fishing 205,207 218,670 236,027 228,286 245,222 970 1,032 223,864 229,792 231,201 225,990 283,455 226,221 1,007 984 919 1,070 1,011 1,015 1,015 Industry, construction (C to F) 229,615 243,067 256,362 252,418 275,098 1,096 1,101 247,126 258,208 251,919 259,650 302,333 263,312 1,120 1,059 1,110 1,081 1,114 1,109 1,106 C Mining and quarrying 324,410 344,670 360,110 347,764 390,549 1,504 1,547 341,267 357,349 344,675 356,344 465,162 350,142 1,516 1,488 1,508 1,487 1,580 1,572 1,518 D Manufacturing 225,806 238,985 252,162 248,069 269,029 1,086 1,086 243,298 253,828 247,080 255,616 293,054 258,417 1,113 1,046 1,099 1,069 1,094 1,095 1,091 E Electricity, gas & water supply 322,478 353,836 373,743 355,321 439,645 1,494 1,537 347,759 364,848 353,355 364,284 550,174 404,477 1,539 1,442 1,501 1,483 1,551 1,576 1,502 F Construction 214,536 224,794 238,698 239,102 253,871 1,017 1,036 231,933 243,748 241,624 245,043 271,568 245,003 1,018 996 1,038 1,011 1,066 1,031 1,050 Production services (G to I) 242,355 253,747 266,326 261,841 286,264 1,150 1,156 258,907 263,514 263,104 269,263 309,080 280,448 1,151 1,128 1,171 1,153 1,163 1,152 1,162 G Distributive trade 233,682 244,880 258,521 254,723 278,198 1,122 1,130 252,603 255,915 255,650 263,133 294,774 276,686 1,127 1,097 1,143 1,130 1,135 1,125 1,136 H Hotels & restaurants 196,458 202,895 211,873 210,678 221,166 893 922 207,008 213,505 211,520 213,344 225,866 224,287 898 873 906 905 930 931 920 I Transport, storage & communications 284,881 299,377 310,080 302,254 334,933 1,333 1,320 297,889 304,311 304,562 309,630 379,872 315,296 1,324 1,317 1,359 1,316 1,332 1,313 1,329 Business services (J to K) 312,967 325,355 340,552 328,901 375,481 1,437 1,472 323,043 332,310 331,351 332,557 428,155 365,729 1,448 1,412 1,450 1,452 1,504 1,461 1,458 J Financial intermediation 388,044 413,896 443,595 415,908 523,782 1,812 1,943 404,927 414,649 428,147 415,140 668,928 487,279 1,797 1,810 1,830 1,897 2,021 1,911 1,833 K Real estate 283,421 292,763 304,295 298,125 324,256 1,307 1,312 293,992 303,078 297,304 303,947 345,433 323,388 1,326 1,274 1,321 1,300 1,328 1,309 1,330 Public services (L to O) 319,911 330,580 341,999 343,246 353,578 1,445 1,469 341,724 343,977 344,037 347,973 360,551 352,211 1,449 1,433 1,452 1,454 1,474 1,478 1,510 L Public administration 322,928 333,302 343,572 346,124 351,537 1,446 1,482 344,886 345,285 348,201 351,350 353,047 350,213 1,450 1,442 1,445 1,452 1,488 1,506 1,565 M Education 325,463 340,967 357,301 362,784 368,215 1,521 1,545 360,988 363,395 363,969 365,467 370,135 369,042 1,516 1,518 1,530 1,533 1,550 1,550 1,571 N Health & social work 310,990 316,827 325,245 323,843 336,103 1,367 1,393 323,527 325,081 322,920 329,682 341,294 337,332 1,387 1,344 1,369 1,386 1,401 1,392 1,423 O Other social & personal services 316,566 325,159 332,137 324,566 356,170 1,402 1,394 320,629 328,908 324,162 330,619 395,357 342,534 1,395 1,368 1,441 1,389 1,393 1,399 1,399 INDICATORS OF OVERALL COMPETITIVENESS, 2001=100 Foreign exchange rates Effective exchange rate1, nominal 94.6 94.0 94.1 94.4 94.3 94.4 94.8 94.4 94.3 94.4 94.2 94.2 94.4 94.3 94.5 94.5 94.7 94.8 94.9 95.0 Real (relative consumer prices) 105.2 104.9 105.6 106.2 106.0 105.6 107.8 105.7 106.1 106.7 105.7 106.0 106.3 105.6 105.3 106 106.9 108 108.3 108.4 Real (relative producer prices)2 103.1 102.5 101.6 101.2 102.5 103.4 103.2 101.1 100.7 101.9 102.3 102.3 102.9 103.4 103.5 103.4 103.1 103.2 103.4 - SIT/US$ 192.4 192.7 191.0 188.0 185.9 - - 188.9 187.1 188.1 190.0 186.2 181.4 - - - - - - - SIT/EUR 238.9 239.6 239.6 239.6 239.6 - - 239.6 239.6 239.6 239.6 239.6 239.6 - - - - - - - US$/EUR 1.2433 1.2448 1 .2557 1.2741 1 .2902 1.3105 1.3482 1.2684 1.2811 1.2727 1.2611 1.2881 1.3213 1.2999 1.3074 1.3242 1.351 6 1.3511 1.3419 1.3716 Sources of data: SORS, AP, BS, OECD Main Economic Indicators, calculations IMAD. Notes: Data on the monthly gross wage per employee for 2004 and beyond calculated according to the new methodology were published in September 2005. 1Change of methodology: the calculation of domestic currency's effective exchange rate includes the currencies/prices of Slovenia's 17 trading partners (Austria, Belgium, Germany, Italy, France, Netherlands, Spain, Denmark, United Kingdom, Sweden, Czech Republic, Hungary, Poland, Slovakia, USA, Switzerland, Japan); weights are the shares of individual trading partners in Slovenian exports and imports of goods within manufacturing (5-8 SITC) in 2001-2003; exports are double weighted; a rise in the index value indicates an appreciation of domestic currency and vice versa. 2Producer prices in manufacturing activities. Slovenian Economic Mirror IMAD Public Finance No. 8-9/2007 p. A 12 Current prices in SIT million, ____ ____ ___ ____ 2006 2007 2006 2007 since 2007 in EURO thousand 2003 2004 2005 2006 QIII QIV QI QII 10 11 12 1 2 3 4 5 6 CONSOLIDATED GENERAL GOVERNMENT REVENUES (GFS-IMF methodology) TOTAL REVENUES 2,477,425 2,683,055 2,869,949 3,105,421 729,600 874,009 3,065,746 3,455,919 276,487 287,812 309,710 1,062,257 959,563 1,043,926 1,292,804 1,172,552 990,564 Current revenues 2,440,298 2,609,053 2,759,987 2,970,410 706,346 816,169 2,955,035 3,374,651 259,442 265,390 291,337 1,034,423 926,165 994,448 1,272,541 1,157,852 944,258 Tax revenues 2,291,071 2,446,899 2,608,230 2,818,643 665,880 768,117 2,828,698 3,199,681 243,250 252,118 272,749 994,506 883,169 951,023 1,218,988 1,094,220 886,473 Taxes on income and profit 460,520 506,878 537,260 655,486 134,797 154,693 587,733 914,251 41,871 49,212 63,610 188,151 189,870 209,713 462,894 288,258 163,099 Social security contributions 839,216 899,400 955,611 1,013,970 250,117 272,872 1,083,374 1,123,694 84,480 86,391 102,001 358,356 360,464 364,554 371,109 371,851 380,733 Taxes on payroll and workforce 107,424 117,676 126,097 113,334 27,376 32,279 96,050 99,669 9,226 9,804 13,249 32,835 32,096 31,119 32,767 32,408 34,495 Taxes on property 34,419 39,513 40,834 45,322 15,126 13,585 22,183 57,958 3,402 7,140 3,043 6,207 7,914 8,063 10,750 27,215 19,993 Domestic taxes on goods and services 814,577 856,610 938,118 977,082 235,012 290,547 1,017,613 973,023 103,301 97,968 89,279 403,169 286,860 327,584 332,537 363,303 277,183 Taxes on international trade & transactions 34,653 19,339 9,360 12,145 2,653 3,866 21,478 30,663 895 1,528 1,444 5,460 6,313 9,706 8,879 11,034 10,749 Other taxes 261 7,484 950 1,304 799 275 266 422 75 76 125 329 -347 284 51 151 221 Non-tax revenues 149,227 162,154 151,756 151,767 40,465 48,051 126,338 174,970 16,192 13,272 18,588 39,917 42,995 43,425 53,553 63,632 57,786 Capital revenues 15,857 20,751 27,181 39,971 10,175 15,465 19,664 14,797 4,651 6,163 4,651 7,455 6,113 6,097 5,885 4,099 4,813 Grants 13,384 1,877 2,173 1,287 356 409 2,103 2,831 61 177 171 713 403 988 726 683 1,422 Transferred revenues 7,887 7,536 8,140 10,259 117 9,985 1,835 4,151 26 9,483 476 1,727 31 77 265 1,251 2,635 Receipts from the EU budget - 43,838 72,469 83,494 12,607 31,981 87,109 59,489 12,307 6,599 13,076 17,940 26,852 42,317 13,387 8,666 37,435 CONSOLIDATED GENERAL GOVERNMENT EXPENDITURE GFS-IMF methodology) TOTAL EXPENDITURE 2,555,894 2,768,427 2,941,756 3,165,327 721,094 925,862 3,202,747 3,394,456 265,622 285,225 375,015 985,191 1,108,815 1,108,741 1,061,801 1,242,4391,090,216 Current expenditure 1,225,523 1,234,113 1,283,018 1,363,301 308,809 367,663 1,481,934 1,447,594 115,023 117,158 135,482 489,167 473,213 519,554 506,331 506,300 434,963 Wages, salaries and other personnel expenditure 662,776 700,349 722,822 762,128 188,138 196,382 785,849 851,865 63,616 64,797 67,969 262,124 262,111 261,613 261,814 321,894 268,157 Expenditure on goods and services 451,440 429,861 457,942 496,830 111,986 150,253 490,267 481,507 41,887 46,338 62,028 192,055 145,994 152,217 155,032 169,272 157,203 Interest payments 92,661 91,933 89,180 90,199 5,439 15,910 197,546 105,283 8,325 5,011 2,574 32,428 62,373 102,745 87,080 12,021 6,182 Reserves 18,646 11,969 13,074 14,145 3,246 5,117 8,272 8,939 1,195 1,012 2,909 2,559 2,735 2,978 2,406 3,112 3,421 Current transfers 1,097,369 1,249,909 1,341,641 1,420,064 332,290 372,882 1,457,082 1,664,458 110,952 122,357 139,573 434,832 507,916 514,335 468,021 639,050 557,387 Subsidies 69,470 77,571 91,362 96,556 13,742 31,540 104,411 137,926 5,146 6,475 19,918 6,748 54,844 42,819 10,003 39,748 88,175 Current transfers to individuals and households 986,100 1,053,417 1,109,197 1,167,404 280,259 294,149 1,219,043 1,359,171 92,935 102,296 98,919 388,090 415,487 415,466 409,207 537,720 412,245 Current transfers to non-profit institut., other current domestic transfers 36,722 113,675 134,930 149,548 35,971 45,707 130,723 157,182 12,583 12,909 20,214 39,679 35,484 55,560 48,253 54,243 54,686 Current transfers abroad 5,077 5,247 6,154 6,556 2,319 1,485 2,905 10,178 288 676 521 315 2,101 489 558 7,340 2,281 Capital expenditure 142,131 151,305 156,784 216,016 42,704 117,094 133,353 163,228 19,780 26,348 70,967 44,660 46,280 42,413 46,704 55,577 60,947 Capital transfers 90,871 92,464 91,874 96,956 19,384 52,703 30,424 58,623 13,658 15,861 23,184 8,203 9,460 12,761 16,636 19,871 22,117 Payments to the EU budget - 40,637 68,438 68,990 17,907 15,520 99,954 60,553 6,210 3,501 5,810 8,330 71,946 19,679 24,109 21,642 14,802 SURPLUS / DEFICIT -78,469 -85,372 -71,807 -59,906 - - - - - - - - - - - - - Source of data: MF Bulletin. Note: in line with the changed methodology of the International Monetary Fund of 2001, social security contributions paid by the state are not consolidated. Main Indicators Slovenian Economic Mirror IMAD No. 8-9/2007 p. A 13 Real growth rates, in % 2001 2002 2007 2008 2003 Autumn Forecast 2007 GDP 3.1 3.7 2.8 4.4 4.1 5.7 5.8 4.6 GDP per capita, in EUR 11,298 12,084 12,695 13,400 14,116 15,167 16,532 17,888 GDP per capita, PPS1 15,300 16,300 16,700 18,000 18,900 20,400 - - Standardised rate of unemployment (ILO) 6.4 6.4 6.7 6.3 6.5 6.0 5.0 4.9 Labour productivity (GDP per employee) 2.6 3.7 3.2 4.1 4.0 4.5 3.4 3.7 Inflation2, annual average 8.4 7.5 5.6 3.6 2.5 2.5 3.4 3.5 INTERNATIONAL TRADE - BALANCE OF PAYMENTS STATISTICS Exports of goods and services3 6.4 6.8 3.1 12.5 10.1 12.3 13.4 10.3 Exports of goods 7.0 6.4 4.4 12.8 10.3 13.4 13.1 10.6 Exports of services 3.5 8.2 -2.5 11.0 9.5 7.3 15.0 9.1 Imports of goods and services3 3.1 4.9 6.7 13.3 6.7 12.2 14.2 10.1 Imports of goods 3.2 4.4 7.3 14.6 6.8 12.7 14.3 10.1 Imports of services 2.2 8.4 2.9 5.6 5.6 8.9 13.1 10.0 Current account balance, in EUR million 38 247 -196 -720 -561 -857 -1,165 -1,118 Average exchange rate, SIT/EUR 217.2 226.2 233.7 238.9 239.6 239.6 - - Foreign exchange reserves, in EUR million 6,514 7,842 7,703 7,484 8,833 8,005 6794 - Gross external debt, in EUR million 10,386 11,524 13,225 15,343 19,614 23,895 29,8925 - DOMESTIC DEMAND - NATIONAL ACCOUNTS STATISTICS (share in GDP in %) Private consumption 56.2 55.2 55.3 54.3 54.0 53.4 52.8 52.5 Government consumption 19.7 19.5 19.4 19.2 19.4 19.2 18.8 18.9 Gross fixed capital formation 24.9 23.4 24.1 25.4 25.5 26.1 28.2 28.2 Sources of data: SORS, BS, MF, calculations, estimates and forecasts by the IMAD - Autumn Forecast 2007. Notes: 1Eurostat; 2the consumer price index; 3balance of payments statistics (exports F.O.B., imports F.O.B.), changes in exchange rates and prices in foreign markets are eliminated by calculating real rates; 4end August. From 1 January 2007 foreign exchange reserves of the Bank of Slovenia include foreign cash in convertible currencies, deposits abroad, and first class securities of issuers from outside the Euro area in foreign currency. The drop in data values is the result of Slovenia's entry to the Economic and Monetary Union; 5end June. International Comparisons / I Slovenian Economic Mirror IMAD No. 8-9/2007 p. A 14 Real GDP growth GDP per capita in PPS1 EU27=100 Inflation2 (annual average) 2003 2004 2005 2006 2003 2004 2005 2006 2003 2004 2005 2006 Slovenia 2.8 4.4 4.1 5.7 81.0 83.4 84.7 86.7 5.7 3.7 2.5 2.5 EU27 1.3 2.5 1.8 3.0 100.0 100.0 100.0 100.0 2.1 2.3 2.3 2.3 EU25 1.3 2.4 1.8 3.0 104.4 104.2 104.1 103.9 1.9 2.1 2.2 2.2 EMU 0.8 2.0 1.5 2.8 112.1 111.1 111.0 110.3 2.1 2.1 2.2 2.2 Belgium 1.0 3.0 1.1 3.2 123.5 124.4 123.0 122.3 1.5 1.9 2.5 2.3 Bulgaria 5.0 6.6 6.2 6.1 32.6 33.6 35.2 37.1 2.3 6.1 6.0 7.4 Czech Republic 3.6 4.6 6.5 6.1 73.8 76.2 77.2 79.4 -0.1 2.6 1.6 2.1 Denmark 0.4 2.1 3.1 3.5 124.7 124.5 126.3 126.7 2.0 0.9 1.7 1.9 Germany -0.2 1.1 0.8 2.9 117.1 116.1 114.6 113.7 1.0 1.8 1.9 1.8 Estonia 7.2 8.3 10.2 11.2 54.6 57.0 62.8 67.9 1.4 3.0 4.1 4.4 Greece 4.3 4.3 5.5 6.0 83.9 84.9 87.0 88.4 4.0 2.3 2.2 2.7 Spain 4.8 4.7 3.7 4.3 101.5 100.9 102.6 102.4 3.4 3.0 3.5 3.3 France 3.1 3.3 3.6 3.9 112.3 112.1 114.2 112.8 3.1 3.1 3.4 3.6 Ireland 1.1 2.5 1.7 2.0 140.7 141.5 143.7 143.8 2.2 2.3 1.9 1.9 Italy 0.0 1.2 0.1 1.9 111.2 107.6 105.4 103.7 2.8 2.3 2.2 2.2 Cyprus 1.8 4.2 3.9 3.8 89.1 91.3 93.6 93.2 4.0 1.9 2.0 2.2 Latvia 7.2 8.7 10.6 11.9 43.5 45.5 50.2 55.8 2.9 6.2 6.9 6.6 Lithuania 10.3 7.3 7.6 7.5 49.2 51.1 53.7 57.8 -1.1 1.2 2.7 3.8 Luxembourg 1.3 3.6 4.0 6.2 247.6 251.3 261.9 278.3 2.5 3.2 3.8 3.0 Hungary 4.2 4.8 4.1 3.9 63.6 63.9 64.8 65.3 4.7 6.8 3.5 4.0 Malta -0.3 0.1 3.1 3.2 78.7 75.9 76.0 75.5 1.9 2.7 2.5 2.6 Netherlands 0.3 2.2 1.5 3.0 130.0 130.3 131.9 132.2 2.2 1.4 1.5 1.7 Austria 1.2 2.3 2.0 3.3 129.1 128.8 128.6 128.8 1.3 2.0 2.1 1.7 Poland 3.9 5.3 3.6 6.1 49.1 50.8 51.0 53.0 0.7 3.6 2.2 1.3 Portugal -0.7 1.5 0.5 1.3 77.0 75.2 75.4 74.5 3.3 2.5 2.1 3.0 Romania 5.2 8.5 4.1 7.7 31.5 33.6 34.4 37.7 15.3 11.9 9.1 6.6 Slovakia 4.2 5.4 6.0 8.3 55.3 56.7 59.8 62.7 8.4 7.5 2.8 4.3 Finland 1.8 3.7 2.9 5.5 113.5 115.9 114.5 116.4 1.3 0.1 0.8 1.3 Sweden 1.7 4.1 2.9 4.2 120.5 120.4 119.1 120.3 2.3 1.0 0.8 1.5 United Kingdom 2.8 3.3 1.8 2.8 120.1 121.8 119.6 118.9 1.4 1.3 2.1 2.3 USA 2.5 3.6 3.1 2.9 152.4 153.5 155.4 154.6 2.3 2.7 3.4 3.2 Sources of data: SORS; Eurostat. Notes: 1PPS - Purchasing Power Standard. 2 Harmonised Index of Consumer Prices for EU countries and Consumer Price Index for the USA. International Comparisons / II Slovenian Economic Mirror IMAD No. 8-9/2007 p. A 15 Survey Unemployment Rate Current account balance1, % GDP General Government Balance, % GDP General Government Gross Debt, % GDP 2003 2004 2005 2006 2003 2004 2005 2006* 2003 2004 2005 2006 2003 2004 2005 2006 Slovenia 6.7 6.3 6.5 6.0 -0.8 -2.7 -2.0 -2.7 -2.8 -2.3 -1.5 -1.4 28.6 28.9 28.4 27.8 EU27 9.0 9.0 8.7 7.9 0.1 0.2 -0.5 -0.7 -3.1 -2.8 -2.4 -1.7 61.8 62.2 62.9 61.7 EU25 9.0 9.0 8.7 7.9 0.0 -0.1 -0.6 n.p. -3.1 -2.8 -2.4 -1.7 62.1 62.5 63.3 62.2 EMU 8.7 8.8 8.6 7.9 0.4 0.7 -0.1 -0.1 -3.1 -2.8 -2.5 -1.6 69.3 69.8 70.6 69.1 Belgium 8.2 8.4 8.4 8.2 4.1 3.5 2.5 2.3 0.0 -0.1 0.0 0.1 98.6 94.3 93.2 89.1 Bulgaria 13.7 12.0 10.1 9.0 -8.5 -5.8 -11.8 -15.8 -0.9 2.2 1.9 3.3 45.9 37.9 29.2 22.8 Czech Republic 7.8 8.3 7.9 7.1 -6.2 -6.1 -2.1 -4.1 -6.6 -2.9 -3.5 -2.9 30.1 30.7 30.4 30.4 Denmark 5.4 5.5 4.8 3.9 3.4 2.4 2.9 2.5 -0.1 1.9 4.6 4.2 45.8 44.0 36.3 30.2 Germany 9.0 9.5 9.4 8.4 1.9 3.7 4.1 4.7 -4.0 -3.8 -3.4 -1.6 63.9 65.7 67.9 67.9 Estonia 10.0 9.7 7.9 5.9 -11.6 -12.5 -10.5 -14.2 2.0 2.3 2.3 3.8 5.7 5.2 4.4 4.1 Greece 4.7 4.5 4.3 4.4 -7.1 -6.2 -7.7 -11.4 0.4 1.4 1.0 2.9 31.2 29.7 27.4 24.9 Spain 9.7 10.5 9.8 8.9 -3.5 -5.3 -7.4 -8.5 -6.3 -7.8 -5.7 -2.9 107.8 108.5 107.5 104.6 France 11.1 10.6 9.2 8.5 0.4 -0.3 -1.6 -2.0 0.0 -0.2 1.1 1.8 48.8 46.2 43.2 39.9 Ireland 9.5 9.6 9.7 9.5 0.0 -0.6 -2.6 -3.3 -4.1 -3.6 -3.0 -2.6 62.4 64.3 66.2 63.9 Italy 8.4 8.0 7.7 6.8 -1.3 -0.9 -1.6 -2.0 -3.5 -3.5 -4.4 -4.5 104.3 103.8 106.2 106.8 Cyprus 4.1 4.6 5.2 4.6 -2.3 -5.0 -5.6 -5.9 -6.3 -4.1 -2.3 -1.5 69.1 70.3 69.2 65.3 Latvia 10.5 10.4 8.9 6.8 -8.2 -13.0 -12.7 -21.1 -1.6 -1.0 -0.2 0.4 14.4 14.5 12.0 10.0 Lithuania 12.4 11.4 8.3 5.6 -6.8 -7.7 -7.2 -10.7 -1.3 -1.5 -0.5 -0.3 21.2 19.4 18.6 18.2 Luxembourg 3.7 5.1 4.5 4.7 7.5 11.8 11.8 8.6 0.4 -1.2 -0.3 0.1 6.3 6.6 6.1 6.8 Hungary 5.9 6.1 7.2 7.5 -8.0 -8.4 -6.8 -5.9 -7.2 -6.4 -7.8 -9.2 58.0 59.4 61.7 66.0 Malta 7.6 7.4 7.3 7.3 -4.7 -8.0 -10.5 -6.3 -9.8 -4.9 -3.0 -2.4 70.4 73.9 72.4 66.5 Netherlands 3.7 4.6 4.7 3.9 5.5 8.5 7.7 9.9 -3.1 -1.8 -0.3 0.5 52.0 52.6 52.7 48.7 Austria 4.3 4.8 5.2 4.7 -0.2 0.5 1.3 3.7 -1.8 -1.3 -1.7 -1.2 64.6 63.9 63.5 62.2 Poland 19.6 19.0 17.7 13.8 -2.1 -4.2 -1.7 -2.3 -6.3 -5.7 -4.3 -3.9 47.1 45.7 47.1 47.8 Portugal 6.3 6.7 7.6 7.7 -5.9 -7.2 -9.2 -9.8 -2.9 -3.3 -5.9 -3.9 56.8 58.2 63.6 64.7 Romania 7.0 8.1 7.2 7.3 -5.5 -8.4 -8.7 -10.3 -1.5 -1.5 -1.4 -1.9 21.5 18.8 15.8 12.4 Slovakia 17.6 18.2 16.3 13.4 -0.9 -3.4 -8.5 -7.7 -2.8 -2.4 -2.8 -3.4 42.4 41.5 34.5 30.7 Finland 9.0 8.8 8.4 7.7 6.4 7.8 4.9 5.9 2.3 2.1 2.5 3.7 44.3 44.1 41.4 39.1 Sweden 5.6 6.3 7.4 7.1 7.3 6.8 6.2 7.0 -1.1 0.6 1.8 2.1 53.5 52.4 52.2 46.9 United Kingdom 4.9 4.7 4.8 5.3 -1.3 -1.7 -2.2 -3.4 -3.5 -3.4 -3.3 -2.9 38.8 40.3 42.2 43.5 USA 6.0 5.5 5.1 4.6 -4.8 -5.7 -6.4 -6.1 -4.8 -4.6 -3.7 -2.6 62.5 63.4 N/A N/A Sources of data: SORS; Eurostat. Notes: 1EU25 and euro area aggregates are adjusted for reporting errors concerning intra-EU trade; N/A - data not available. *European Commission Spring Forecasts. Graphs Slovenian Economic Mirror IMAD No. 8-9/2007 p. A 16 INDUSTRY indices: average 2000=100 trend indices by the TRAMO-SEATS method REAL INDICES OF CONSTRUCTION PUT IN PLACE indices: average 2000=100; trend indices by the TRAMO-SEATS method J[ i £v Pfcr K Wv \ V • ORIGINAL INDICES-TREND INDICES T3 sp 15 sp FREIGHT TRANSPORT BY ROAD AND RAIL (mio tonne km) 2004 QII QIII QIV 2005 QII QIII QIV 2006 QII QIII QIV 2007 QI QI QI QI GOODS TRADE FOB, EXCL. INTERCURRENCY CHANGES 12-month cummulatives in EUR, bn : BALANCE (right) -BUILDINGS ■ CIVIL ENGINEERING ■ y. ; ■ : 1 PL' \ i- * / » 3 3 OVERNIGHT STAYS TOTAL indices average 1992=100; trend indices by the TRAMO-SEATS method EMPLOYMENT AND UNEMPLOYMENT 95 500 0 15.0 21 4 19 3 13.0 17 2 11.0 15 13 0 9.0 11 7.0 9 Graphs Slovenian Economic Mirror IMAD No.8-9/2007 p. A 17 NET WAGES AND OTHER REMUNERATION, in EUR million ^ajyoKS-^roo. PAYMENTS FOR INVESTMENT in EUR million, constant 2000 prices « I £ » u_ s < ^ 5 S- ü g 8 S < m ° 2: o ° -SB J^ u_ s < EFFECTIVE EXCHANGE RATE IN REAL TERMS indices: average 2001 = 100 HOUSEHOLDS' DEPOSITS in EUR million FOREIGN CURRENCIES DOMESTIC CURRENCY 8a> (0^(0 u £ ° (Do u coœ GROWTH IN SELECTED PRICE INDICATORS INDICES:2005=100 A - / PRICE CONTROL » CONSUMER PRICE INDICES —O—PRODUCER PRICE INDICES (DOMESTIC MARKET) ^ O 13 < 13 O —) CT 13 < EURO EXCHANGE RATES indices: average 2001 = 100 1.5 1.4 1.3 1.2 1.1 1.0 0.9 0.8 0.7 0.6 700 13500 12000 600 10500 500 9000 400 7500 6000 300 4500 200 3000 100 1500 0 0 115 150 95 The IMAD's Other Publications Slovenian Economic Mirror IMAD No. 8-9/2007 Social Overview 2006, 2007 Forecast of Economic Trends Spring Forecast of Economic Trends Slovenia's Development Strategy (SDS 2006-2013), 2005 Spring Report 2006 Analysis, Research and Development Autumn Report 2006 Human Development Report Slovenia 2002-2003 Development Report 2007 Slovenia - On the Way to the Information Society • No. 6/2007. Innovation Cooperation and Innovation Activity of Slovenian Enterprises, Jaklič, Andreja, Jože P. Damijan, Matija Rojec • No. 11/2006. Firm of Private Value: What is Behind the Creation of Multiple Blockholder Structure?, A. Brezigar Masten, A. Gregorič, K. Zajc • No. 2/2006. Does Exporting Boost Capital Investments? The Evidence from Slovenian Manufacturing Firms' Balance Sheets, A. Burger, M. Ferjančič Working papers • No. 5/2004. On the possibility of negative effects of EU entry on output, employment, wages and inflation in Slovenia, A. Brezigar • 4/2004. Future GDP growth in Slovenia: Looking for room for improvement, E. L. W. Jongen • 3/2004. An analysis of past and future GDP growth in Slovenia, E. L. W. Jongen • 1/2004. Productivity growth and functional upgrading in foreign subsidiaries in the slovenian manufacturing sector, M. Rojec, B. Majcen, A. Jaklič, S. Radošević More Working papers are available in Slovene. 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