.^'IMAD O fü Q) £ u E o O Ü) o u 0) o fN fO Slovenian Economic Mirror ISSN 1318-3826 No. 5 / Vol. XX / 2014 Publisher: IMAD, Ljubljana, Gregorčičeva 27 Responsible Person: Boštjan Vasle, MSc, Director Editor in Chief: Matevž Hribernik Authors of Current Economic Trends (listed alphabetically): Jure Brložnik, Urška Brodar, Gonzalo Caprirolo, MSc, Janez Dodič, Marjan Hafner, MSc, Matevž Hribernik, Slavica Jurančič, Mojca Koprivnikar Šušteršič, Janez Kušar, Jože Markič, PhD, Tina Nenadič, MSc, Mitja Perko, MSc, Jure Povšnar, Ana T. Selan, MSc, Dragica Šuc, MSc Authors of Selected Topic: Valerija Korošec. PhD (OECD well-being indicators - Better Life Index 2014); Matevž Hribernik (Slovenia's competitiveness according to the IMD World Competitiveness Yearbook 2014); Rotija Kmet Zupančič, MSc, Janez Kušar (Business results of companies in 2013) Editorial Board: Marijana Bednaš, MSc, Lejla Fajič , Alenka Kajzer, PhD, Rotija Kmet Zupančič, MSc, Janez Kušar, Boštjan Vasle, MSc Translator: Marija Kavčič Data Preparation and Graphs: Bibijana Cirman Naglič, Marjeta Žigman Concept and Design: Katja Korinšek, Pristop DTP: Bibijana Cirman Naglič Print: SURS Circulation: 80 copies © The contents of this publication may be reproduced in whole or in part provided that the source is acknowledged. Contents In the spotlight................................................................................................................................................................3 Current economic trends..............................................................................................................................................5 International environment...............................................................................................................................................7 Economic developments in Slovenia.............................................................................................................................9 Labour market..................................................................................................................................................................14 Prices..................................................................................................................................................................................16 Balance of payments.......................................................................................................................................................18 Financial markets.............................................................................................................................................................20 Public finance....................................................................................................................................................................22 Boxes Box 1: General government balance and government gross debt in EU Member States....................................8 Box 2: Gross domestic product, Q1 2014..........................................................................................................................10 Box 3: Concentration in the retail sale in non-specialised stores with food predominating............................13 Selected topic OECD well-being indicators - Better Life Index 2014...............................................................................................27 Slovenia's competitiveness according to the IMD World Competitiveness Yearbook 2014..............................29 Business results of companies in 2013.........................................................................................................................30 Statistical appendix.....................................................................................................................................................35 The Economic Mirror is prepared based on statistical data available by 4 June 2014. On January 2008, the new classification of activities of business entities NACE Rev.2, which replaced NACE Rev. 1.1, came into force in all EU Member States. In the Republic of Slovenia, the national version of the standard classification, SKD 2008, which includes the entire European classification of activities but also adds some national subclasses, came into force on the mentioned date. In the Slovenian Economic Mirror, all analyses are based on the SKD 2008, except when the previous SKD 2002 classification is explicitly referred to. More general information about the introduction of the new classification is available on the SURS website http://www.stat.si/eng/ skd nace 2008.asp. All seasonally adjusted data in the Economic Mirror are calculations by IMAD. In the spotlight The strengthening of economic activity in the euro area continued in the first quarter (0.2%), GDP being up 0.9% year-on-year. The continuation of GDP growth was underpinned particularly by strong growth in Germany, as the recovery in several other euro area countries slowed. Foreign trade continues to make a significant contribution to growth, with domestic demand also becoming a more and more important factor, which is in line with the expectations of international institutions. The values of confidence indicators in the euro area indicate a continuation of the recovery in the second quarter. In Slovenia GDP was up 1.9% year-on-year in the first quarter amid stronger growth in exports and further signs of stabilisation in the domestic environment. Relative to the previous quarter, GDP declined (-0.3%, seasonally adjusted), but in our estimation mainly due to the negative contribution of changes in inventories. Amid further recovery in the international environment, year-on-year growth in goods exports picked up and, given the slower growth of imports, net exports made a relatively significant contribution to the year-on-year change in GDP (2.0% percentage points). Further improvement was also seen in some segments of domestic consumption. Investment consumption was up year-on-year for the second quarter in a row (2.4%), due to the continuation of strong growth in civil-engineering investment co-financed by EU funds. Private consumption persisted at the level seen in the final quarter of last year, but it was up year-on-year for the first time since the end of 2011 (0.6%). On the other hand, government consumption was down relative to the same period last year (-2.0%) and a negative contribution to growth (-0.7 percentage points) also came from changes in inventories. The situation on the labour market showed the first signs of stabilisation in the past two months, but remains tight. The number of people in employment rose slightly in the first quarter, the most in market services and slightly in public services. The pronounced increase in registered unemployment seen particularly at the end of last year and the beginning of 2014 came to a halt in the past two months (seasonally adjusted). At the end of April, 123,636 persons were unemployed, an increase of 2,304 (1.9%) over the same month of last year. In the first four months of 2014 the share of young people under 29 years old among all unemployed was much higher than in the same period last year. In the first quarter the average gross earnings per employee rose further (seasonally adjusted), again mainly due to growth in private sector earnings, which have been strengthening steadily in the last year again after the stagnation in 2012. Year-on-year inflation remained low in May. Consumer prices rose by 0.6% in May, mainly due to higher prices of tobacco products and public utility services, in addition to seasonal factors (higher prices of fruit and clothing). Weak year-on-year growth (0.7%) continues to be marked by sluggish economic activity and the absence of inflationary pressures from the domestic and international environments. The decline in the volume of loans to domestic non-banking sectors at domestic banks continued to slow gradually in April, while the share of non-performing loans increases further. In April the volume of loans declined less than in previous months, while the decline in the first quarter was around 40% smaller relative to the same period last year, primarily as a result of slower corporate and NFI deleveraging. Banks continued to make debt repayments abroad and reduce their liabilities to the ECB. In March the share of bad claims strengthened again, by 0.6 percentage points, to 14.5% of the banking system's total exposure. The creation of additional provisions and impairments also increased substantially. The general government deficit (EUR 658 m) in the first quarter of this year was lower year-on-year due to a larger increase in revenue (6.2%) than expenditure (3.7%). The higher revenue (year-on-year) was a result of improvement in all main revenue categories, with the exception of EU funds, which remained approximately at the same level as in 2013. The year-on-year increase in expenditure is explained mainly by the increase in interest payments (18.0%) and, to a lesser extent, higher expenditure on investment, other current domestic transfers and, to some extent, higher expenditure on the wage bill. Social transfers were down year-on-year in most categories, with the exception of pensions and social security. Slovenia remains among the bottom-ranked countries on this year's international competitiveness scale. According to the IMD World Competitiveness Yearbook 2014, Slovenia slipped to 55'h place this year (among 60 countries), which is three places lower than last year and 23 places lower than in 2008. The key factor of this year's deterioration was macroeconomic data for 2013. Although the surveys among managers have ceased to deteriorate, the respondents remain dissatisfied with government efficiency and the possibilities for doing business in Slovenia. The survey finds Slovenia's key competitive advantages in its well-educated workforce and reliable infrastructure, while its international competitiveness is hindered by an inefficient legal and regulatory framework, policy instability and ineffective government and public institutions. According to the OECD well-being indicators, Slovenia ranks in the middle of the countries analysed. In terms of the OECD Better Life Index 2014, Slovenia is placed 19th (among 36 countries), which is somewhat better than last year. It scores highest regarding civic engagement and education, and lowest in life satisfaction. ■o £ Ol E o £ 0 u 01 £ 01 3 U International environment The strengthening of economic activity in the euro area continued in the first quarter. According to Eurostat's estimate, GDP rose by 0.2% (seasonally adjusted) and was 0.9% higher year-on-year. The greatest contribution to GDP growth in the euro area was made by Germany (0.8%), where GDP was up due to domestic consumption, particularly gross fixed capital formation, while the contribution of net exports was negative. In the first quarter GDP also increased in Austria (0.3%), while it fell in Italy (-0.1%) and remained at the same level as in the final quarter of last year in France. The values of confidence indicators in the euro area indicate a continuation of the recovery in the second quarter. After April's decline, the Economic Sentiment Indicator (ESI) for the euro area strengthened again as a result of higher confidence among consumers, in industry and in construction. The Eurozone Composite Purchasing Managers Index (PMI) continues to indicate positive Figure 2: Economic sentiment in the euro area -is 10 -10 -20 -30 -40 100 JE ro > <5 90 .55 TD 1= -D (U 80 '■TD 70 60 Source: European Commission. Figure 1: GDP growth in Q1 and comparison with the EC forecasts Q2 13 ■Q3 13 ■Q4 13 ■Q1 14 -Q1 14 EC forecast 2.0 Figure 3: Yield to maturity of ten-year government bonds -Slovenia -Portugal -Spain -Italy -----Ireland .........Germany .................Austria 16 H 12 Source: Eurostat, EC forecast (May 2014). Table 1: Money market interest rates and the exchange rates of national currencies against the EUR L^ T L_ T Source: Bloomberg. Interest rates average, in % change, in b. p. 2013 V 13 IV 14 V 14 V 14/IV 14 V 14/V 13 3-month EURIBOR rate 0.220 0.201 0.330 0.325 -0.5 12.4 3-month USD LIBOR rate 0.268 0.274 0.228 0.226 -0.2 -4.8 3-month CHF LIBOR rate 0.021 0.019 0.017 0.016 -0.1 -0.3 Exchange rates average change, in % 2013 V 13 IV 14 V 14 V 14/IV 14 V 14/V 13 EUR/USD 1.328 1.298 1.381 1.373 -0.6 5.7 EUR/CHF 1.231 1.242 1.219 1.221 0.1 -1.7 EUR/GBP 0.849 0.849 0.825 0.815 -1.2 -4.0 EUR/JPY 129.66 131.13 141.62 139.66 -1.4 6.5 20 120 110 0 10 8 o 6 4 2 0 Box 1: General government balance and government gross debt in EU Member States In most EU countries, general government deficits have declined substantially since 2010, when they were highest, and they are also expected to gradually decline in the next two years. Last year the general government deficit in the euro area fell to 3.0% GDP and in the EU to 3.3%, which is almost half less than in 2010. Since 2010 general government deficits have declined in most EU countries, with the exception of Slovenia, Greece and Cyprus, the countries with significant public finance problems, and in Sweden and Estonia, where the deficits are still minimal. In its spring forecast for this year, the European Commission predicts a deficit reduction to below the upper ceiling of 3% of GDP for the euro area and the EU for the first time since 2008, though in some countries the deficits will remain higher.1 Growth in general government debt in the euro area and the EU as a whole is projected to reach its peak this year. Since 2008, general government debt in the euro has risen by 22.5 percentage points and in the EU as a whole by 24.9 percentage points, which can be mainly explained by the snow ball effect,2 particularly the effect of interest payments, which were otherwise slightly lower than in previous years, and of the stock-flow adjustment on debt growth. Since the beginning of the financial crisis, indebtedness within the EU rose most notably in Ireland, Cyprus, Portugal, Greece, Spain and Slovenia. According to the Commission's forecast, general government debt in the euro area and the EU will continue to grow this year, reaching its peak at 96% of GDP or 89.5% of GDP, respectively, before starting to decline next year for the first time since 2008. Figure 4: Change in general government deficits in the period of 2010-2013, as a % of GDP Deficit increase 2010-2013 Deficit reduction 2010-2013 Deficit in 2013 -3% of GDP 10 5 0 -5 CL C^ -10 u as -15 rti ^^-20 -25 -30 -35 J 3 U I CL U- CL Figure 5: Consolidated gross general government debt in 2008-2015, as a % of GDP 60 20 j EC forecast Source: Eurostat. 2008 2009 2010 2011 2012 2013 2014 2015 Source: Eurostat,EC Spring EconomicForecast 2014. 1 The deficit is expected to remain above the threshold of 3% of GDP in eight EU Member States: Cyprus, Spain, Ireland, Slovenia, Portugal, France, Croatia, the United Kingdom. 2 An increase in debt due to a positive differential between the nominal interest rate and the nominal growth rate of GDP. Table 2: Oil and non-energy commodity prices Oil average change, in % 2013 V 13 IV 14 V 14 V 14/IV 14 V 14/V 13 Brent USD 108.56 102.56 107.76 109.52 1.6 6.8 Brent EUR 81.66 79.25 78.18 79.42 1.6 0.2 Commodities change, in % 2013/2012 III 14/IV 14 IV 14/IV 13 Non-energy commoditites -1.2 1.4 1.3 Food 1.1 1.2 3.0 Agricultural raw materials 1.4 0.0 7.7 Metals -4.2 2.7 -7.7 100 80 40 0 trends, but it dropped slightly in May, primarily due to a lower value of the manufacturing index while the value of the services index was the highest in the last three years. The Ifo Economic Climate Index for the euro area for the second quarter reached the highest value since 2007. The key interest rates of the ECB and the interbank interest rates remain unchanged. The European Central Bank kept its key interest rate at 0.25% in May. On the monetary market, interest rates with a shorter maturity otherwise decreased slightly at the beginning of the month, but remained similar to the previous month. Between the end of January 2013 and the beginning of May, banks repaid slightly more than half of liabilities (EUR 536.7 bn) of the total EUR 1.019 bn, obtained in both LTROs with a maturity at the beginning of 2015. Figure 6: Prices of Brent crude oil and the USD/EUR exchange rate -Price in EUR (left axis) -Price in USD (left axis) -USD/EUR exchange rate (right axis) 140 120 40 1.8 1.6 0.8 0.6 o o ^ Source: ECB, EIA; calculations by IMAD. Figure 7: Non-energy commodity prices in dollars Food - Industrial inputs -Non-fuel commodities -----Agricultural raw materials -----Metals 260 240 220 200 180 u^ C3 160 X (U 140 120 100 80 60 Economic developments in Slovenia Real growth in merchandise exports continued in the first quarter of this year, while real merchandise imports declined after two quarters of growth (seasonally adjusted).1 With the continuation of growth in exports to the EU and stronger growth outside the EU, total real merchandise exports rose by 1.7% relative to the final quarter of 2013. Broken down by the most important products, exports of transport vehicles, electrical equipment and some chemical products rose in particular, according to our estimate.2 Less favourable trends were recorded in exports of pharmaceutical products and re-exports of imported Table 3: Selected monthly indicators of economic activity in Slovenia in % 2013 III 14/ II 14 III 14/ III 13 I-III 14/ I-III 13 Exports1 2.7 14.6 3.4 4.3 -goods 2.2 11.9 5.1 5.8 -services 5.0 28.3 -3.5 -2.1 Imports1 -0.8 5.0 2.1 3.0 -goods -1.2 4.2 1.6 2.1 -services 1.6 11.1 5.7 9.9 Industrial production -0.6 2.02 4.23 1.73 -manufacturing -1.2 1.62 4.63 2.13 Construction -value of construction put in place -2.6 8.92 44.73 37.23 Real turnover in retail trade -3.7 0.12 -0.43 -1.03 Nominal turnover in market services (without trade) -0.1 2.62 5.73 2.83 Sources: BS, Eurostat, SURS; calculations by IMAD. Notes: 1balance of payments statistics, ^seasonally adjusted, 3working-day adjusted data. Figure 8: Merchandise trade - real 110 105 85 Jb 80 75 O O O O O Source: SURS; calcualtions by IMAD. Source: IMF. 1 According to the National Accounts Statistics. 2 An estimate based on the available data on the structure of merchandise trade according to the external trade statistics for the first two months of this year. 1.4 80 1.2 60 1.0 20 100 95 1= 90 70 Box2: Gross domestic product, Q1 2014 In the first quarter GDP was up 1.9% year-on-year amid stronger growth in exports and further signs of stabilisation in the domestic environment. Relative to the previous quarter, it declined (-0.3%, seasonally adjusted), but in our estimation mainly due to the negative contribution of changes in inventories. Year-on-year growth in merchandise exports picked up amid further recovery in the international environment, and, with slower growth in imports, net exports made a relatively significant contribution to the year-on-year change in GDP (2.0 percentage points). Further improvement was also seen in some segments of domestic consumption. Gross fixed capital formation was up year-on-year for the second quarter in a row (2.4%), due to a continuation of strong growth in civil-engineering investments (38.4%)1 co-financed by EU funds. Investment in machinery and equipment was much lower year-on-year (-15.3%), amid a further quarterly decline, and also as a result of the base effect.2 Private consumption persisted at the level seen in the final quarter of last year, but it was up year-on-year for the first time since the end of 2011 (0.6%). Consumption of both durable and other goods was also higher, which had already been indicated by short-term indicators (the wage bill, turnover in food and non-food products, consumer confidence indicator). On the other hand, government consumption (-2.0%) was down again relative to the same period of last year, which was related to a further decline in expenditure on intermediate consumption and compensation of employees. In contrast to the last quarter of 2013, changes in inventories made a negative contribution to year-on-year GDP growth (-0.7 percentage points). Figure 9: GDP level in Slovenia and its main trading partners —•—Slovenia -Germany ---------France ----Italy -Austria ---------Croatia 106 104 o 102 o ;;§ 100 c^ 98 96 ■s 94 ro J^ 92 ro C o 90 tin 88 86 Figure 10: Expenditure structure of the year-on-year change in GDP, Slovenia a Private consumption ■ Gross fixed capital formation ■ Exports of goods and services -Real GDP growth (right axis) 20 ^ 10 Government consumption Ch.in inventories and valuables ■ Imports of goods and services 8 r-20 ■i^-25 ;-30 o o o o o Source: Eurostat; calculations by IMAD. 0 Is -10 -12 a a a Source: SURS. 1 For the second consecutive quarter, they recorded more than 10% quarterly growth according to seasonally adjusted data. 2 In the first quarter of 2013 it was up 17.7% quarter-on-quarter (seasonally adjusted) due to larger purchases of investment equipment for an energy facility. oil and oil derivatives, the main factors of export growth in 2013. The decline in real imports (-0.9%) relative to the last quarter of 2013 was, in our estimation, attributable to lower imports of intermediate goods, which account for almost two thirds of total merchandise imports, while imports of investment and consumer goods increased. According to original data, real merchandise exports were up 6.7% year-on-year; imports were also slightly higher than in the same period of last year (1.5%). consequence of lower exports of other business services, while exports of transport services recorded stronger growth and exports4 of other services increased. Imports continued to rise in real terms (1.9%) due to higher imports of other business and transport services, while imports of travel services declined. According to original data, real exports of services were down 3.6% year-on-year, while real imports were up 8.6%. Real exports of services declined again in the first quarter, while real growth in imports of services continued (seasonally adjusted).3 Exports fell (-0.5%) as a 3 According to the National Accounts Statistics. The source of data by category of services is the balance of payments statistics. 4 When adjusting data for seasonal effects, we placed communication, construction, financial, computer and information activities, personal service activities, arts, entertainment and recreation activities, government services, insurances and licences, patents and copyrights into the group of other services. Together, they account for almost a fifth of services exports and nearly a third of services imports. 6 4 iS 5 2 -- 0 -5 -4 -15 Figure TT:Services trade - real -Exports 1,400 1,300 -Imports 1,200 1,100 1,000 900 800 a a a a a Source: BS; calcualtions by IMAD. Production volume in manufacturing rose slightly again in the first quarter. Production in industries of higher technology intensity increased further and reached the level in 2008. Production also rose in medium-low-technology industries, where it has been steadily rising since the end of 2012, while it remained similar to the end of the year in low-technology industries, which lag most notably behind the levels in 2008. Manufacturing production volume in the first quarter was 2.0% higher than in the same period of 2013 (working-day adjusted), being up in all medium-low- and most low- (with the exception of the textile industry) and medium-high- and high-technology industries. Figure 12: Production volume in manufacturing industries by technology intensity - Low-technology industries - Medium-low-technology industries -----Medium-high-and high-technology industries - Manufacturing, total c^ r- r^ r^ cy cy cy cy cy Source: SURS; calculations by IMAD. Modest activity in low-technology industries is the main reason for a wider gap with the production levels in 2008 of the manufacturing sector in Slovenia compared with the EU. Low-technology industries in the EU have been increasing production since the beginning of last year, reaching, on average, almost 90% of the level seen in 2008. The gap in Slovenia is wider, primarily on account of the furniture, leather and textile industries, where production volume is almost 50% lower than in 2008.5 Wider gaps than in most industries (on average, the manufacturing industries have reached around 86% of the production level in 2008) are also recorded in the medium-low-technology rubber industry and in the manufacture of non-metallic mineral products. On the other hand, similar to the EU, the 2008 levels are exceeded by some industries of higher technology intensity (alongside the chemical and pharmaceutical industries, the manufacturing of ICT and electrical equipment). Figure 13: Production volume in manufacturing in Slovenia and in the EU-28 in Q1 of 2014 120 110 =2 100 II 90 C3 80 lU ■Jä 70 60 50 40 I EU-28, seasonally adjusted I Slovenia, original index S ^ .c Low-tech industries Source: Eurostat, SU Medium-low-tech industries RS; calculations by ^ ^ -I S Medium-high and high-tech indust. MAD. Construction activity picked up considerably in Q1 2014. The value of construction put in place rose by 5.5% in Q1 (seasonally adjusted). After increasing for the fourth consecutive quarter, activity was as much as 37.3% higher than in the same period last year. It was up in the construction of civil-engineering structures, while dropping slightly in the construction of buildings. The favourable developments in civil engineering are related to the construction of municipal infrastructure co-financed by EU funds, but they were also a consequence of ice damage repair. At the end of March the stock of contracts in the construction sector was lower than at the end of last year. 5 The number of people employed in the furniture industry (C31, the manufacture of furniture) and textile industry has also dropped by half since the beginning of the crisis. In the first quarter it declined again, being more than a tenth lower than in the same period of last year. 700 Figure 14: Value of construction output, seasonally adjusted 140 120 60 40 20 - Construction ■ Residential buildings ■ Civil-engineering works Non-residental buildings - ^ .....1 r......................... "" ~ ' s/ 'V'V O O O O c^ C^ Source: SURS; calculations by IMAD. Figure 15: Total floor area of buildings for which building permits were issued in the last four quarters 2,800,000 2,400,000 2,000,000 1,600,000 1,200,000 800,000 400,000 Non-residential buildings Residential buildings a a Source: SURS. After rising strongly last year (up 35.5%), the stock of contracts in construction declined 10.5% this year. In civil-engineering, the stock of contracts remained unchanged this year, while it declined in residential and non-residential construction, where it was also lower than in the same period last year. Data on issued building permits indicate unfavourable trends: in both the final quarter of last year and the first quarter of this year, the total floor area for buildings planned by issued building permits was significantly lower than in the same period one year earlier. The decline in turnover in retail trade came to a halt in the last two quarters, while turnover in wholesale trade and in the sale of motor vehicles remained relatively high (seasonally adjusted). In the first quarter, turnover in retail trade remained similar to that in the previous two quarters (seasonally adjusted) and lower than in the same period a year earlier. Turnover in the sale and repair of motor vehicles declined slightly after strong growth in the final quarter of 2013, but remained much higher year-on-year. Turnover in wholesale trade was also considerably higher than in the same period of the previous year. Figure 16: Turnover in trade sectors 105 95 85 - Retail trade, real of which automotive fuels, real ■ Sale, repair of motor vehicles, real -Wholesale trade, nom. 70 a a a a a a Source: SORS; calculations by IMAD. In the first quarter turnover in retail trade increased in all sectors other than the sale of automotive fuels (seasonally adjusted). Turnover from the sale of non-food products rose in the first quarter, being up year-on-year for the first time in three years. Its year-on-year growth was largely Figure 17: Turnover from the sale of non-food products -Sale of medical and cosmetic products -Sale of textiles, clothing and footwear -----Sale of furniture, construction material -----Sale of computer, telecom. equipment, books and sports equip. 120 110 o 100 90 C 80 70 60 50 -L. -L. Crt CD rs r^o ^^ CJ c? c? c? c? Source: SORS; calculations by IMAD. 100 80 0 90 80 75 0 Box3: Concentration in the retail sale in non-specialised stores with food predominating The market concentration in stores with food predominating, which is typically high in Slovenia, has been decreasing since 2006 due to increased sales in discount stores. The market concentration in non-specialised stores, which mainly sell food (hypermarkets, markets, discount stores, etc.),1 has increased since 2000, given that many smaller companies went out of business, merged, or were taken over by larger companies. The concentration ratio in this sector as measured by the Hirschman-Herfindahl Index/HHI exceeded the upper limit (1,800) in 2005, reaching the highest level in 2006. After declining in the following six years, it remained at the 2012 level in 2013. Despite the decline, it still indicates a high degree of concentration in all these years. The decline in the concentration level over the past six years is mainly attributable to increased sales in foreign discount stores that entered the Slovenian market in 2005 and 2007. By broadening their business network and changing the buying behaviour of Slovenian consumers during the economic crisis, the foreign discount stores combined generated 17.9% of total sales revenues in this sector in 2013 (6.5% in 2007 and 16.4% in 2012. In contrast, the share of the largest three companies in total sales revenues in this sector declined. Figure 18: Concentration indices for the retail sale in non-specialised stores with food predominating -HH (left axis) ■ Share of the largest three companies in net sales generated on the domestic market (right axis) 4500 4000 3500 3000 2500 2000 1500 1000 500 0 Source: AJPES; calculations by IMAD. Note: HHI -Hirschman-Herfindahl concentration index. 1 Companies registered under SCA 47.110. attributable to higher sales in specialised stores selling furniture, household appliances, construction material and audio and video recordings, which were still more than a third lower than before the crisis. Turnover from the sale of food, beverages and tobacco products also rose slightly after last year's decline, but remained down year-on-year. After increasing significantly at the end of last year, turnover in the sale of automotive fuels declined, but was still higher than in the same period of last year. The decline in the sales of energy products for heating was impacted by the mild winter, while the sales of gasoline and automotive fuels increased relative to the same time a year earlier. After a small decline at the end of last year, nominal turnover in market services (excluding trade)^ rose significantly again in the first quarter (seasonally adjusted), being up year-on-year in most services. The largest increase was recorded for turnover in transport services (3.9%), the only turnover in main services to be higher than before the crisis.7 In the first quarter turnover was also up significantly in information and communication services, where it was also higher year-on-year. The year-on-year growth was also contributed by telecommunication services,8 in addition to computer programming. Turnover in administrative and support service activities remained unchanged in the first quarter, with turnover in employment services standing out, being a fifth higher than on average in 2008. Turnover in accommodation and food service activities also stagnated after last year's growth, but remained higher than a year earlier. In the first quarter, turnover in professional and technical services decreased (-3.7%), mainly due to a further decline in engineering services. Figure 19: Nominal turnover in market services (other than trade) - Total -Transportation and storage (H) Communication activ. (J) Professional-technical activ. (M) Administrative and support service activ.(N) c=105 , 95 80 75 a a a a Source: SURS; calculations by IMAD. 6 Activities from H to N (SCA 2008) subject to the Council Regulation (EC) No. 1165/98 concerning short-term statistics. 7 Turnover in transport services was 7.4% higher year-on-year, but some other indicators are also rising at a rapid pace. Exports of transport services thus increased by 7.6% year-on-year, the number of trucks passing through toll stations in Slovenia by 4.9% (according to the Bank of Slovenia and DARS). 8 Telekom Slovenije, the largest telecommunication services provider, reported 3.9% year-on-year growth in operating revenues; all other providers together recorded even higher growth, which indicates further improvement in this sector's competitiveness (total revenue growth in telecommunications was 6.8%). 90 85 Economic sentiment continued to improve in May. Confidence increased in all activities, notably in retail trade and construction. Consumer confidence is also improving steadily. Figure 20: Business trends 40 (u ^ 30 :> 20 10 0 !E -10 -20 -30 II -40 -50 -60 C o -70 - Economic sentiment • Retail trade - Construction -Manufacturing - Service activ. Consumers Source: SURS; calculations by IMAD. Labour market The number of persons in employment rose slightly in the first quarter. The decline in the number of persons in employment, which started at the end of 2008, came to a halt in the first half of last year. According to the Statistical Register of Employment (SRE),9 the number has been Figure 21: Employed according to SRE and registered unemployed -Employed according to SRE (left axis) — Registered unemployed (right axis) 860 840 740 720 700 680 660 240 ^ iy 220 200 ro C o 180 !S 120 ^ 100 80 60 40 Source: SURS, ESS; calculations by IMAD. growing slightly since the second quarter last year (in the first quarter of this year by 0.1%, seasonally adjusted). In has risen the most in market services, but a slight increase has also been seen in public services. The Labour Force Survey (LFS) also indicates an increase in the number of employed persons in the first quarter (by 0.4%, seasonally adjusted), according to our estimate, mainly due to a higher number of self-employed people and unpaid family workers. Employment also increased slightly (0.1%, seasonally adjusted) according to the national accounts statistics. Table 4: Indicators of labour market trends in % 2013 III 14/ II 14 III 14/ III 13 I-III 14/ I-III 13 Labour force -0.7 0.1 0.2 0.0 Persons in formal employment -2.0 0.2' -0.3 -0.6 Employed in enterprises and organisations and by those self-employed -2.6 0.6 0.0 -0.3 Registered unemployed 8.8 -0.1' 3.3 4.1 Average nominal gross wage -0.2 0.0^ 0.4 0.9 - private sector 0.6 -0.1' 1.2 1.8 - public sector -1.3 -0.3^ -0.6 -0.3 -of which general government -2.5 0.1' -0.7 -1.0 2013 III 13 II 14 III 14 Rate of registered unemployment (in %), seasonally adjusted 13.1 13.1 13.5 13.5 Average nominal gross wage (in EUR) 1,523.18 1,520.08 1,520.88 1,526.41 Private sector (in EUR) 1,404.40 1,400.93 1,406.47 1,418.26 Public sector (in EUR) 1,740.78 1,736.33 1,730.63 1,725.71 -of which general government (in EUR) 1,716.48 1,721.15 1,701.42 1,708.70 9 The Statistical Register of Employment: these are employed and self-employed persons excluding self-employed farmers. Sources: ESS. SURS; calculations by IMAD. Note: 1seasonally adjusted. The increase in the number of registered unemployed came to a halt in the last two months (seasonally adjusted), but the share of young people under 29 years old among all unemployed increased. Their number, having risen more strongly at the end of last year and early this year, did not change in March; in April it declined slightly (seasonally adjusted) but was still higher than a year earlier. A total of 123,636 persons were registered as unemployed at the end of April. The seasonally adjusted decline in April was mainly attributable to a higher outflow from unemployment, mainly into employment, while the inflow into unemployment was as usual at this time of the year. In the first four months slightly fewer people registered as unemployed than in the same period of 2013, mainly as fewer persons lost work, but there were more firsttime jobseekers. The total outflow from unemployment was larger, particularly the outflow into employment. With the increase in the number of unemployed at the beginning of the year, the registered unemployment rate rose in the first quarter to the highest level since 1999 (to 13.5%, seasonally adjusted). The Labour Force Survey 820 800 780 160 760 140 -n Table 5: Employed persons by activity Number in '000 Change in Number 2013 III 13 XII 13 III 14 2013/ 2012 III 14/ II 14 III 14/ III 13 I-III 14/ I-III 13 Manufacturing 177.7 177.9 177.0 177.5 -5,235 57 -364 -505 Construction 54.3 52.4 52.0 52.6 -5,541 1,917 290 -559 Market services 333.1 332.2 333.5 334.7 -5,260 2,126 2,528 1,080 -of which: Wholesale and retail trade, repair of motor vehicles and motorcycles 104.2 105.5 103.8 103.2 -3,656 28 -2,308 -2,387 Public services 170.1 170.2 170.2 170.9 -1,489 466 735 417 Public administration and defence, compulsory social security 49.1 49.2 48.9 48.9 -1,559 120 -364 -518 Education 65.4 65.7 65.6 66.3 -71 239 609 488 Human health and social work activities 55.6 55.3 55.7 55.8 141 107 490 448 Other 58.4 57.4 58.6 51.8 1,121 -188 -5,607 -5,484 Source: SURS; calculations by IMAD. Table 6: Unemployment flows I-XII 13 I-IV 13 I-IV 14 IV 14 INFLOW OF UNEMPLOYED - TOTAL 108,344 39,081 37,319 7,159 First-time jobseekers 19,071 4,772 5,240 1,015 Jobseekers who lost work 88,710 34,245 32,025 6,138 Bankruptcy of the company 3,732 1,339 1,090 137 Business reasons or compulsory settlement 17,896 6,564 6,155 1,333 Termination of fixed-term contracts 54,004 21,559 20,069 3,565 Other reasons 13,078 4,783 4,711 1,103 Other (transitions between records) 563 64 54 6 OUTFLOW OF UNEMPLOYED - TOTAL 102,390 35,810 37,698 10,253 Unemployed who found work 65,054 23,509 27,956 7,272 Public works 5,423 2,865 3,797 485 Self-employment 5,789 1,565 1,206 352 Transitions into inactivity 13,295 3,700 3,536 748 Retirement 8,511 2,397 1,980 450 Breaches of regulations 14,772 5,315 3,131 1,146 Other (transfer to other registers, other) 9,269 3,286 3,075 1,087 Figure 22: Employed persons by activity ■ Q1 2013 Q2 2013 103 2013 104 2013 101 2014 1.0 0.5 0.0 ■ -0.5 1^-1.0 ==^-1.5 ro i^-2.0 J=-2.5 iä iS-3.5 -4.0 -4.5 Manufacturing Construction Market Public services services Source: SURS; calculations by IMAD. figures also show a stronger increase in unemployment in the first quarter (seasonally adjusted), again particularly among the young. The average gross earnings per employee rose further in the first quarter (seasonally adjusted). The increase was again mainly a result of higher private sector earnings,10 which have been rising gradually again in the last year after the stagnation in 2012.11 The average earnings in the government sector, which have been declining since mid-2011, dropped slightly again, while the average earnings in the public sector as a whole rose due to growth in 10 As of June 2012, we only comment on data on wages in the private sector and public sector (within the latter, particularly in the general government), and only exceptionally on wages in activities of the private sector and in public service activities; for more see SEM 06/12, Selected Topics - Monitoring the movements of wages and wage earners in the public and private sector. 11 The growth rates in 2009, 2010 and 2011 were highly influenced by changes in employment structure and, in the last two years, particularly the increase in the minimum wage. Source: ESS. g-3.0 Table 7: Earnings by activity Gross wage per employee, in EUR Change, in % 2013 III 2014 2013/ 2012 III 14/ II 14 III 14/ III 13 I-III 14/ I-III 13 Private sector activities (A-N; R-S) 1,473.47 1,481.31 0.7 0.3 0.9 1.7 Industry (B-E) 1,482.76 1,498.85 2.6 -2.1 2.1 3.7 - of which manufacturing 1,436.53 1,452.93 2.8 -2.0 2.4 3.9 Construction 1,188.38 1,178.29 -1.4 0.7 0.6 -0.1 Traditional services (G-I) 1,355.65 1,368.49 0.1 3.0 1.7 1.2 Other market services (J-N;R-S) 1,691.40 1,681.53 -1.3 1.1 -1.4 -0.4 Public service activities (O-Q) 1,670.91 1,660.09 -2.3 0.5 -0.9 -1.1 - Public administration and defence, compulsory social security 1,727.19 1,709.96 -1.4 -0.1 -0.3 -0.9 - Education 1,621.86 1,618.25 -3.3 0.7 -1.2 -1.2 - Human health and social work activities 1,677.78 1,664.60 -2.0 0.9 -1.0 -1.2 Source: SURS; calculations by IMAD. public corporations.12 Earnings in public corporations rose noticeably this time, the increase compensating for almost the entire decline in the final quarter of 2013. In year-on-year terms, growth in the average earnings in public corporations rose somewhat13 (1.4%), similar to growth in the private sector (1.8%), while in the government sector the year-on-year decline continued to decrease (-1.0%). Looking at individual activities, stronger year-on-year growth was also recorded by earnings in industry and traditional market services, while earnings in other market services remained lower than in the same period last year. Figure 23: Average gross earnings per employee -Total ■ Private sector -Public sector 1,900 1,800 1,700 1,600 1,500 1,400 1,300 1,200 ---- - of which, general government sector -of which, public corporations a a a a a a a Source: SURS; calculations by IMAD. 12 Public corporations are corporations controlled by units of the general government sector, the basic criterion for determining control being majority ownership (owning more than half of the voting shares). They include companies, banks, insurance corporations, old people's homes, pharmacies, etc. 13 Of which only in public non-financial corporations (1.4%); in public financial corporations it was down year-on-year (-0.2%). Prices Year-on-year inflation, which remained low in May (0.7%), continues to be marked by sluggish economic activity and the absence of inflationary pressures from the domestic and international environments. In addition to the absence of global commodity price shocks, which was mainly reflected in a smaller contribution of food and energy prices (together 0.2 percentage points), modest price growth is thus also due to the continuation of weak domestic demand, which shows particularly in the year-on-year decline in prices of durables (-0.1 percentage points) whose purchases have declined in view of the uncertainty during the recession. Amid the aforementioned disinflationary pressures, price growth has been, for quite a while, mainly driven by prices of services. This year, their contribution to year-on-year growth (0.6 percentage points) strengthened under the impact of some one-off factors in services related to Figure 24: Headline and core inflation in Slovenia and in the euro area 4 ^^ 2 1 Slovenia HICP Slovenia HICP -core inflation Euro area HICP Euro area HICP -core inflation .....t" CrtcrtCDCD^-^-r^rNr^m Source: Eurostat 8 7 6 5 0 -1 Table 8: Breakdown of the HICP into sub-groups - March 2014 Slovenia Euro area Cum. % Weight % Contribution in p.p. Cum. % Weight % Contribution in p.p. Total HICP 0.6 100.0 0.6 0.3 100.0 0.3 Goods 0.1 64.8 0.1 0.2 57.2 0.1 Processed food, alcohol and tobacco -0.4 16.1 -0.1 0.5 12.3 0.1 Non-processed food 2.3 7.5 0.2 -0.5 7.5 0.0 Non-energy industrial goods 0.2 26.4 0.1 0.4 26.7 0.1 Durables 0.4 8.7 0.0 -0.1 8.4 0.0 Non-durables 0.0 8.5 0.0 0.2 8.1 0.0 Semi-durables 0.9 9.2 0.1 1.9 10.2 0.2 Energy -0.6 14.7 -0.1 -0.3 10.8 0.0 Electricity for households -2.9 2.8 -0.1 1.0 2.7 0.0 Natural gas 0.5 1.1 0.0 -1.0 1.8 0.0 Liquid fuels for heating -0.5 1.3 0.0 -2.9 0.9 0.0 Solid fuels -0.5 1.0 0.0 -0.8 0.1 0.0 District heating -1.7 0.8 0.0 -0.3 0.6 0.0 Fuels and lubricants 0.2 7.6 0.0 -0.4 4.8 0.0 Services 1.6 35.2 0.6 0.4 42.8 0.2 Services - dwellings 0.3 3.2 0.0 1.0 10.5 0.1 Services - transport 3.5 6.2 0.2 1.6 7.3 0.1 Services - communications -0.2 3.6 0.0 -1.4 3.1 0.0 Services - recreation, repairs, personal care 1.1 14.3 0.2 -0.2 14.7 0.0 Services - other services 2.4 8.0 0.2 1.1 7.2 0.1 HICP excluding energy and non-processed food 0.7 77.8 0.5 0.4 81.7 0.3 Source: Eurostat; calculations by IMAD. Note: ECB classification transport, and higher prices of public utility and other services. Commodity prices and weak domestic demand have also marked inflation in the euro area, which, according to Eurostat's flash estimate, dropped to 0.5% relative to the previous month (after March this year, the lowest level in the last four years). Figure 25: Breakdown of year-on-year inflation 8 5 ? 4 (D ^^ 3 o 2 (D 1 d O " 0 Amid the current level of food and energy prices, core inflation is hovering above actual inflation and remains moderate and marked by weak demand. The absence of price pressures is also reflected in the movement of industrial producer prices, which declined again on the domestic and foreign markets. The decline in prices on the domestic market remained at the previous month's level (-1.5%). The main factors in the decline were lower prices in the manufacture of food products (-1.3%) and metals (-3.1%). Alongside lower prices in the manufacture of ICT and electrical equipment (-2.1%), the latter also contributed to the year-on-year decline on foreign markets, which deepened slightly relative to March (-1.2%). Prices of imported products were down again year-on-year in April (-1.9%). The smaller decline relative to the previous month was largely a result of lower prices in the manufacture of metals (-6.3%) and ICT and electrical equipment (-1.6%). Source: SURS; calculations by IMAD. 7 6 -1 Figure 26: Movements of domestic producer prices on the domestic and foreign markets -PPI (domestic market) -----Mfr.of basic metals,fabric.metal prod.,ex. mach.,equip.(domestic) ---------Mfr. of food products; beverages; tobacco products (domestic) -PPI (foreign market) 16 12 ! 8 ^ 4 ^ 0 " -4 -8 -12 ................... fs ............i........f. V-'' /\ 1 i 1 i ; ............ '...........T..... J "T...........^ . ' = ^ , .... .....,............ ............r............ ^ rf \ ^ ........r...........: ^.....r..... I"............: ........i...........i.......\..x..j..j............i........ .............! ............i............ i........... ■ ■ 1 1 C^^ C^^ C^^ C^^ C^^ C^^ C Source: SURS. Slovenia remains in the group of euro area countries14 with relatively smaller losses in the price competitiveness of the economy. The real effective exchange rate as measured by the relative HICP15 was up year-on-year in March (by 1.1%). Growth in the nominal exchange rate of the euro picked up, while the decline in relative prices slowed. The year-on-year deterioration in price competitiveness seen since January 2013 (with the exception of February this year) has been steadily easing since September 2013. A smaller group of euro area countries recorded improvement in price competitiveness in this period.16 Figure 27: Real effective exchange rate deflated by the HICP 5 4 3 # 2 i^t 1 0 -1 -2 Source: ECB; calculations by IMAD. 14 In March it was ranked 12th in terms of the year-on-year-deterioration; in the first quarter 11th; in the final quarter of last year 13th. 15 In Slovenia, in comparison with its trading partners. 16 In two in the final quarter of 2013, and in three in the first quarter of this year. Balance of payments The surplus of the current account remained high at the beginning of this year. In the first quarter, it was otherwise down in year-on-year terms despite a higher surplus in external trade, which was due to a higher surplus in merchandise trade, while the surplus in services trade declined. Owing to the accelerated borrowing of the government sector, the deficit in the balance of factor income widened substantially. The balance of current transfers also deteriorated slightly. Figure 28: Components of the current account of the balance of payments Merchandise trade Services trade Factor income Current transfers 1000 -Current account 800 600 400 200 E 0 LU ^^-200 -400 -600 -800 -1000 a a Source: BS. In the first quarter of this year, the surplus in external trade widened again due to a higher surplus in merchandise trade. Amid the otherwise modest growth in imports, the year-on-year increase in the surplus of merchandise trade was mainly underpinned by stronger nominal growth in exports to the EU,17 while exports to the markets outside the EU continued to fall. The higher surplus in merchandise trade was mainly attributable to volume factors,18 though it also reflected better terms of trade.19 Export prices declined, particularly in the manufacturing sector, but prices of imported goods were falling even faster. The surplus of trade in services narrowed year-on-year, primarily on account of the group other business services. Among these, the trade surplus of intermediation services and services related to trade declined,20 while the trade deficits of administrative and support service activities and professional, scientific and technical activities increased.21 17 The growth of exports to EU countries has been increasing year-on-year for the fourth quarter in a row. In our estimation, more than a fifth of the increase was accounted for by growth in exports to Croatia. 18 Real growth in exports was much higher than growth in imports. 19 Import prices declined more (-2.9%) than export prices (-0.9%) 20 All payments related to monetary intermediation, commission for other financial intermediation services and other costs. 21 Due to the increased payments related to the review of the bank asset quality and stress tests: accounting, book-keeping and auditing activities, tax consultancy. 20 -16 NEER-20 -3 -4 Figure 29: Breakdown of changes in the nominal merchandise balance ^■Terms of trade ^«Volume effect Other -Change in nominal balance 800 - 600 -200 -400 a a a a a a a Source: BS; calculations by IMAD. The substantially higher deficit (year-on-year) in the balance of factor income in the first quarter was mainly a consequence of a larger outflow of income from capital. The wider deficit in factor income in the first quarter was mainly underpinned by higher net payments of interest on external debt related to the increased government sector borrowing. Commercial banks continued to make repayments abroad,22 and their interest receipts exceeded their interest payments abroad. Net interest payments of other sectors and affiliated companies were higher. Despite the low interest rate, the Bank of Slovenia reported stable, positive, net interest income. The total net payments of interest abroad stood at EUR 178.5 m in the first quarter of the year (at EUR 104.1 m in the same period of 2013). Figure 30: Net interest income by sector IBank of Slovenia ■ Private sector Government sector Total '-100 -200 The somewhat higher deficit in current transfers was mainly due to a higher deficit of the general government sector. The deficit in private sector transfers narrowed year-on-year due to lower net payments of non-life insurance premiums and claims, and a decline in other transfers. International financial transactions23 recorded a substantial net inflow from portfolio investment and a high net outflow from other investment. Foreign direct investment flows remain modest. In the first quarter, financial transactions recorded a net outflow of EUR 572.6 m. Portfolio investment posted a net inflow of EUR 2.962.4 m. In February the government issued 5- and 10-year bonds in the total amount of USD 3.5 bn (EUR 2.7 bn). Other investment registered a net outflow of EUR 3.390.8 m. The net outflow was mainly attributable to an increase in currency and deposits of the banking sector and, to some extent, deposits of other sectors. Furthermore, short-term trade credits increased as a result of export growth, and banks continued to deleverage abroad. The flows of direct investment remained weak, but this time there was a net inflow in the amount of EUR 40.0 m. In outward FDI, inter-company loans prevailed, with an increase in net claims of Slovenian investors against the affiliated companies abroad. The bulk of foreign investment in Slovenia was in equity. Figure 31: Financial transactions 3,500 3,000 2,500 2,000 1,500 1,000 500 0 -500 -1,000 -1,500 -2,000 -2,500 -3,000 -3,500 -4,000 I Direct investment I Financial derivatives -Net financial flow ■ Portfolio investment Other investment O O O O Source: BS; calculations by IMAD. O O O O Source: BS; calculations by IMAD. 22 Between the deepening of the financial crisis in September 2008 and the end of March 2014, Slovenia's gross external debt rose by EUR 15.4 bn to EUR 19.2 bn. The external debt of commercial banks declined by EUR 11.3 bn in the same period, to EUR 7.2 bn. 23 Excluding international monetary reserves and statistical errors. 400 5 200 0 50 0 -50 -150 At the end of March, Slovenia's net external debt amounted to EUR 13.2 bn (37.0% of the estimated GDP), and was EUR 0.7 bn higher relative to December 2013. The increase was a result of the accelerated borrowing of the government sector, while the net external debt of the private sector continues to decline. The increase in the net claims of the Bank of Slovenia against the rest of the world is a consequence of the changed Target position. Slovenia's gross external debt totalled EUR 42.0 bn at the end of March (117.8 % of estimated GDP) and was EUR 2.4 bn higher than in December 2013. The increase was the result of general government borrowing by selling bonds. The external debt of the private sector declined, with commercial banks repaying foreign loans and non-residents withdrawing deposits from Slovenian banks. Moreover, the Bank of Slovenia's liabilities to the Eurosystem declined substantially (short-term deposits).24 Gross claims in debt instruments totalled EUR 28.8 bn at the end of March (80.8% of estimated GDP), EUR 1.7 bn more than at the end of last year. The increase was mainly due to higher financial assets of the Bank of Slovenia and commercial banks' assets in the form of deposits in accounts abroad. The volume of short-term trade credits also increased, which is related to stronger exports of goods and services. Table 9: Balance of payments Figure 32: Slovenia's net external debt General government ^^ Private sector IBank of Slovenia -Net external debt III 14, in EUR m Inflows Outflows Balance1 Balance, III 13 Current account 7,406.5 6,936.9 469.6 484.2 - Trade balance (FOB) 5,701.1 5,370.9 330.2 131.2 - Services 1,183.7 776.3 407.4 503.3 - Income 199.1 380.0 -180.9 -71.7 Current transfers 322.6 409.6 -87.1 -78.6 Capital and financial account 3,135.3 -3,865.6 -730.3 -879.3 - Capital account 83.1 -83.4 -0.3 -5.3 - Capital transfers 60.6 -66.8 -6.2 -15.7 - Non-produced, non-financial assets 22.6 -16.6 5.9 10.4 - Financial account 3,052.2 -3,782.2 -730.0 -874.0 - Direct investment 78.2 -38.3 40.0 -62.1 - Portfolio investment 2,870.5 92.0 2,962.4 131.1 - Financial derivates -8.5 -175.6 -184.2 23.4 - Other investment 112.0 -3,502.8 -3,390.8 -1,033.4 - Assets 65.5 -1,797.3 -1,731.8 -1,284.0 - Liabilities 46.5 -1,705.6 -1,659.0 250.6 - Reserve assets 0.0 -157.5 -157.5 66.9 Net errors and omissions 260.6 0.0 260.6 395.1 Source: BS. Note: 1a minus sign (-) in the balance indicates a surplus of imports over exports in the current account and a rise in assets in the capital and financial account and the central bank's international reserves. 20,000 17,500 15,000 12,500 10,000 7,500 ^^ 5,000 2,500 0 -2,500 -5,000 -7,500 24 The Slovenian central bank recorded only EUR 0.2 bn in foreign liabilities at the end of March. a a a a a a a Source: BS. Note: positive (negative) value means net external debt (net external claims). Financial markets The decline in the volume of loans to domestic non-banking sectors at domestic banks continued to ease gradually in April. The decline, at EUR 62.1 m, was largely the result of further corporate and NFI deleveraging. Household and government deleveraging was low. Loans to domestic non-banking sectors fell by EUR 337.2 m in the first four months of this year, which is approximately 40% less than in the same period last year, the main factor being slower corporate and NFI deleveraging. Banks continued to make debt repayments abroad and reduce their liabilities to the ECB. Household deposits also declined, while government deposits increased due to new borrowing. After a modest increase in March, the volume of household loans fell slightly in April, but the decline (EUR 3.7 m) was much smaller than in previous months. A slight increase (by EUR 4.2 m) was recorded only in housing loans, while both consumer loans and loans for other purposes declined by a similar amount. Household net repayments at domestic banks totalled EUR 67.8 m in the first four months of 2014, largely as a result of deleveraging in the first two months. The volume of corporate and NFI loans fell again in April, similar to previous months. Both corporate and NFI loans were down this time. The latter accounted for approximately a third of the total decline. In the first four months of the year, the volume of corporate and NFI loans dropped by EUR 262.8 m, of which by EUR 56.8 m in April. In March enterprises and NFIs increased net repayments abroad; the gaps between domestic and foreign interest rates remain relatively high. Net repayments totalled almost EUR 140 m, which is the highest monthly amount in the last four years and almost solely the result of net repayments of long-term loans. Net repayments of short-term loans (around EUR 10 m) were much smaller. Table 10: Financial market indicator Domestic bank loans to nonbanking sector and household savings Nominal amounts, EUR bn Nominal loan growth, % 31. XII 13 30. IV 14 30. IV 14/31. III 14 30. IV 14/31. XII 13 30. IV 14/30. IV 13 Loans total 26,176.0 25,838.8 -0.2 -1.3 -16.2 Enterprises and NFI 15,594.8 15,332.0 -0.4 -1.7 -23.1 Government 1,664.0 1,657.4 -0.1 -0.4 -4.6 Households 8,917.3 8,849.5 0.0 -0.8 -3.2 Consumer credits 2,213.4 2,199.2 -0.2 -0.6 -8.6 Lending for house purchase 5,306.5 5,293.7 0.1 -0.2 1.1 Other lending 1,397.3 1,356.6 -0.3 -2.9 -9.3 Bank deposits total 14,588.1 14,845.2 -0.1 1.8 0.3 Overnight deposits 6,446.6 6,640.9 -0.2 3.0 4.0 Short-term deposits 3,681.9 3,627.9 -0.6 -1.5 -6.8 Long-term deposits 4,456.1 4,572.6 0.2 2.6 1.3 Deposits redeemable at notice 3.5 3.8 6.4 8.2 -49.2 Mutual funds 1,854.6 1,889.2 0.9 1.9 1.8 Government bank deposits, total 1,284.1 1,938.7 33.2 51.0 -28.2 Overnight deposits 22.9 429.1 499.2 1,774.9 -17.4 Short-term deposits 512.8 1,077.9 37.8 110.2 34.9 Long-term deposits 738.5 402.9 -31.4 -45.4 -70.6 Deposits redeemable at notice 9.8 28.7 99.2 191.6 170.5 Sources: Monthly Bulletin of the BS, SMA (Securities Market Agency); calculations by IMAD. Corporate net repayments abroad thus amounted to EUR 122.5 m in the first three months, being nearly two fifths lower than corporate net repayments at domestic banks. The differences between domestic and foreign interest rates25 remained relatively significant in March. They have not narrowed much since the beginning of the banking system stabilisation, while the rapid decline in interest rates on long-term deposits26 continued. Figure 33: Increase in household, corporate and NFI and government loans Households Corporate and NFI^ ^MGovernment -Total Figure 34: Differences between domestic and foreign interest rates Source: BS; calculations by IMAD. -Loans Deposits 350 300 250 200 1= cp 150 jz 100 50 0 Source: BS; calculations by IMAD. Bank deleveraging abroad is slowing. Net repayments in March totalled just over EUR 50 m, while net repayments in the first quarter of the year amounted to more than EUR 200 m. Net repayments were fairly evenly split between loans and deposits. The difference in the maturity structure of loans is more visible, given that net repayments were only recorded for long-term loans and banks were borrowing short-term from abroad in March. 25 Interest rates on loans over EUR 1 m, with a variable, or up to one year, with a fixed interest rate. 26 With a maturity over two years. -50 Figure 35: Net repayments of foreign liabilities of Slovenian banks 2,000 - 1,500 1,000 Bonds Deposits Short-term loans Long-term loans Total -1,000 -1,500 Source: BS; calculations by IMAD. Household deposits declined in April, while government deposits increased due to the new borrowing. The volume of household deposits at banks declined by EUR 21.7 m. Short-term deposits and overnight deposits declined, while long-term deposits rose by a solid EUR 9 m. Given the high inflows early this year, household deposits at domestic banks rose by EUR 257.1 m in the first four months. Government deposits rose by almost EUR 500 m in April. In contrast to household deposits, particularly overnight and short-term deposits were up (around EUR 360 m and EUR 300 m, respectively), while long-term deposits declined. Such an increase in government deposits is attributable to the issue of two new bonds in the total amount of EUR 2 bn, most of which (EUR 1.5 bn) was used to repay maturing debt. In the first four months government deposits rose by more than EUR 650 m. In March the share of non-performing claims in the Slovenian banking system rose again and the creation of additional impairments and provisions increased significantly. The increase amounted to EUR 58.2 m, the highest figure this year. In the first quarter of this year their volume rose by almost EUR 90 m, which is nearly 15% less than in the comparable period last year. The share of non-performing claims rose to 14.5% and totalled EUR 6.0 bn, approximately EUR 0.5 bn more than at the end of last year. In May the yield to maturity of the Slovenian 10-year euro bond and the spread with respect to the German bond remained at a similar level as in April. The yield averaged 3.44% in May, 8 basis points less than in April, while the spread vis-a-vis the German bond was 214 basis points. At the end of May the yield of the Slovenian 10-year euro bond dropped to 3.3%, the lowest value since these bonds were first issued. Figure 36: Creation of impairments and provisions and the proportion of arrears of more than 90 days in the Slovenian banking system ^■Impairments and provisions -Proportion of arrears of more than 90 days (right axis) 500 450 400 350 300 ^^ 250 u m 200 150 100 50 0 -50 22 20 18 16 14 12 8 6 4 2 0 C r= cr^ cr^ cr= cr^ Source: BS; calculations by IMAD. Figure 37: 10-year government bond yield spread vis-avis German bond -Slovenia -Portugal -Spain -Italy -----Ireland ----France ■t ■t ■'T ■t Id D Sourcer: Bloomberg. Public finance The general government deficit in the first quarter of 2014 compared with one year earlier was lower due to a higher increase in revenue than expenditure.2^ It totalled EUR 658 m, which is 8.4% less than in the same period of 2013. Revenue was 6.2% higher, while expenditure was 3.7% higher, mainly due to the increase in interest payments. 27 According to the consolidated balance on a cash basis. 500 0 -500 6 5 2 0 Table 13: Taxes and social security contributions EUR m Growth, % Structure, % I-III 2014 III 2014/III 2013 I-III 2014/I-III 2013 I-III 2013 I-III 2014 General government revenue - total 3,632.8 10.2 6.2 100.0 100.0 Corporate income tax 103.3 -0.7 4.4 2.9 2.8 Personal income tax 493.5 4.8 3.3 14.0 13.6 Value added tax 710.1 35.8 13.6 18.3 19.5 Excise duties 320.2 23.4 6.8 8.8 8.8 Social security contributions 1303.9 1.7 3.1 37.0 35.9 Other general government revenues 701.7 10.1 7.5 19.1 19.3 Source: PPA - Report on Payments of All Public Revenues; calculations by IMAD. Figure 38: Consolidated general government revenue and expenditure 17.5 -General government revenue, total -General government expenditure, total ■f--'...... 14.0 Source: MF; calculations by IMAD. The higher revenue in the first quarter of 2014 (year-on-year) is explained by revenue improvement in all main revenue categories with the exception of EU funds, which remained approximately at the same level as in 2013. The largest contribution to positive revenue performance came from tax revenue (6.8%, year-on-year), followed by non-tax revenue (10%, year-on-year) and social security contributions (3.1%, year-on-year). Social security contributions increased for the second consecutive quarter after a long period of decline. Revenue across all main tax categories increased in the first quarter compared to the same quarter one year earlier. The largest contributor to the increase was VAT revenue28 (by EUR 85 m or 13.6%, year-on-year) and higher revenue from excise duties (by EUR 20.2 m or 6.8%, year-on-year), which was also the result of the increase in excise duty rates for diesel and fuel oil in the second half of March. The year-on-year increase in tax revenue was also due to higher revenue from personal income tax (3.3%) and corporate income tax (4.4%), which registered positive quarterly growth for the first time since the first quarter of 2012. Revenue from corporate income tax has been affected by the economic slowdown as well as by changes in the tax system that took place in 2012 (the lowering of the tax rate and the tax base). The increase in expenditure in the first quarter of 2014 (year-on-year) is explained mainly by higher interest payments (18% or EUR 132 m). Total expenditure without considering interest payments (i.e. primary expenditure) increased only by 0.5% or EUR 20 m year-on-year. The increase in total expenditure was also attributable to higher expenditure in other categories, namely, a sizable increase in expenditure on investment29 and other current domestic transfers. The quarterly growth of the wage bill (1.3%) was positive again in the first quarter, which is related to the wage settlement based on the Supreme Court decision, according to which public sector employees had to be paid half of the third quarter of funds earmarked to eliminate disparities in basic wages among public sector employees.30 On the other hand, there was a decline in expenditure in goods and services (-5.1% or EUR 36 m) and transfers to individuals and households (-0.9%).The year-on-year reduction in social transfers took place in most categories with the exception of pensions and social security. The most important reductions in social transfers concerned family benefits, unemployment, sick benefits and scholarships.31 The increase in pension expenditure was smaller than on average in the previous year, which was the result of changes in pension legislation and compulsory retirement due to fiscal consolidation measures. Social security transfers increased in the first quarter (6%) for the first time since the final quarter of 2011. In April Slovenia's net budgetary position was positive again, as Slovenia received EUR 96.5 m from and paid EUR 32.7 m into the EU budget. The bulk of receipts were funds under the Common Agricultural and Fisheries Policies (EUR 67.1 m); receipts from Structural Funds and the Cohesion Fund amounted to EUR 11.1 m32 and EUR 17.0 m, 28 The VAT revenue improvement also reflects the effect of VAT rate increases that took place in July 2013. 29 Expenditure on investment rose by EUR 46.4 m (32.8%, year-on-year), while investment transfers declined by EUR 11.0 m (-26.0%). 30 Payment of the third quarter of disparities in basic wages for the period from 1 October 2010 to 31 May 2012 31 Since May 2013 expenditure on scholarships has been covered from direct government funds or from reserves. 32 Of which, 65.7% from the European Regional Development Fund and 34.3% from the European Social Fund. Table 12: Consolidated general government revenue and expenditure 2013 2014 EUR m % of GDP Growth, % I-III 14 v mio EUR I-III 14/I-III 13 Revenue - total 14,725.1 41.7 -1.8 3,632.8 6.2 - Tax revenues 12,647.9 35.9 -3.6 3,147.0 6.8 - Taxes on income and profit 2,137.4 6.1 -19.5 595.6 3.2 - Social security contributions 5,127.2 14.5 -2.2 1,303.9 3.1 - Domestic taxes on goods and servises 5,027.3 14.3 3.1 1,170.9 12.7 - Receipts from the EU budget 938.2 2.7 11.0 209.8 -0.7 Expenditure - total 16,282.7 46.2 1.0 4,290.4 3.7 - Wages and other personnel expenditure 3,617.0 10.3 -3.0 920.5 1.3 - Purchases of goods and services 2,237.4 6.3 -5.7 530.7 -5.1 -Domestic and foreign interest payments 840.1 2.4 29.7 451.8 41.6 - Transfers to individuals and households 6,343.0 18.0 -0.6 1,562.2 -0.9 - Capital expenditure 1,030.8 2.9 12.7 188.0 32.8 - Capital transfers 319.0 0.9 -0.3 31.5 -25.9 - Payment to the EU budget 425.5 1.2 9.0 162.7 0.5 Deficit -1,557.6 -4.4 38.3 -657.6 -8.4 Source: MF, Public Finance Bulletin. Figure 39: Receipts from the EU budget in 2013 and 2014 ■ Total receipts in 2014 (January -April) ■ Total receipts in 2013 (January-December) Other Common Agricultur al Policy 0 50 100 150 200 250 300 350 400 450 In EUR m Source: MF; calculations by IMAD. respectively, other receipts to EUR 0.5 m. In the first four months as a whole Slovenia received EUR 304.9 m from the EU budget, 25.4% of the level envisaged in the budget for 2014, and paid EUR 195.1 m into the EU budget, 47.2% of the total amount planned. Its net budgetary position against the EU budget in the first four months of this year was positive in the amount of EUR 109.4 m (EUR 88.9 m in the same period of last year). Almost half (55.6%) of all receipts were funds under the Common Agricultural and Fisheries Policies, which recorded the highest absorption compared with the plan (61.5%). A total of 26.7% of all received funds came from the Structural Funds (16.0% absorption with regard to the budget for 2014), and 16.6% from the Cohesion Fund (12.3% absorption). Figure 40: Planned and absorbed EU funds, 2013 and 2014 ■ Absorption rate with regard to the revised state budget for 2014 ■ Absorption rate with regard to the revised state budget for 2013 Other 0 10 20 30 40 50 60 70 80 90 100 110 120 In % Source: MF; calculations by IMAD. %J a o ■Ö U 'S V) OECD well-being indicators - Better Life Index 2014 In 2014 Slovenia ranks in the middle of the countries according to the OECD Better Life Index (BLI). The well-being indicators were first presented at the 50th anniversary of the OECD in 2011, when Slovenia was ranked 21st among the 34 countries surveyed. This year Slovenia is 19'h among the 36 countries;33 12th among the EU countries that are also members of the OECD. As last year, Australia ranks the highest of all, while Sweden is the top-ranking country in the EU. The lowest ranking country is Turkey and, among the EU countries, Greece. The Better Life Index, which makes it possible to monitor well-being preferences by country, shows that the users from Slovenia attribute the greatest significance to education, safety and life satisfaction. The composite index is divided into two dimensions, material living conditions and quality of life. Together, they comprise 11 components on the basis of 24 indicators.34 Most indicators are based on statistical data, while some are obtained using opinion polls. The OECD Better Life Index is an online interactive platform that allows users to assign their own weight to individual components, which is then monitored and analysed by the OECD. The online results show that life satisfaction, health and education matter most to the BLI users around the world, while in Slovenia education, safety and life satisfaction are at the top of the list. Together with Germany, Slovenia also stands out in significance attributed to the environmental quality component. In terms of the OECD well-being indicators, in 2014 Slovenia scores highest regarding civil engagement35 and lowest in life satisfaction. However, it should be noted that changes in a country's ranking do not necessarily indicate its progress/deterioration in a certain area as they can also be a result of faster/slower progress in other countries. The improvement in the civil engagement component, where Slovenia is placed highest, is thus a result of a slight deterioration in other countries in the last year, rather than a change of indicators. The deterioration in education, where Slovenia ranked highest in 2013, is mainly due to the slightly lower scores achieved by Slovenian pupils in the PISA survey, amid a concurrent improvement in the educational attainment indicator. Slovenia improved both its ranking and the actual situation in two above-average components (social connections and personal security), as well as in the components of income and housing, where it is below the OECD average. On the other hand, the work-life balance and life satisfaction components, where Slovenia ranks lowest, deteriorated from both aspects, while Slovenia's rankings in other components remained unchanged. Table 13: Performance of men and women according to OECD indicators, 2014 Slovenia OECD Wome^ Men Wome^ Men HEALTH STATUS Life expectancy 83 77 83 77 Share of people in good/very good self-reported health conditions (%) 58 64 67 72 EDUCATION AND SKILLS Tertiary degrees awarded (all fields) (%) 65 35 58 42 JOBS AND EARNING Employment rates (tertiary educated individuals) (%) 86 90 79 88 Share of poor poor single-adult households (%) 56 37 37 30 WORK-LIFE BALANCE Number of hours dedicated to household tasks (per week) 33 27 32 21 CIVIC ENGAGEMENT AND GOVERNANCE Share of seats in national parliament (%) 32 68 27 73 PERSONAL SECURITY Share of people feeling safe when walking alone at night 79 92 61 79 LIFE SATISFACTION Levels of life satisfaction on a 0 to 10 scale 5.9 6.1 6.7 6.6 Source: http://www.oecdbetterlifeindex.org/ 33 Alongside the 34 OECD countries, the OECD included Brazil and Russia in the 2013 ranking. In the next few years it is also going to add other key partners of the OECD (China, India, Indonesia and South Africa). 34 The composite index consists of two dimensions: material living conditions (or economic well-being), determined by three components (income and wealth, job and earnings and housing), which are described by nine indicators; the quality of life dimension, which comprises eight components (health status, work and life balance, education and skills, social connections, civic engagement and governance, environmental quality, personal security and subjective well-being) described by 15 indicators. The composite index is calculated as an un-weighted average of all 24 well-being indicators. For more on the methodology, see: OECD Better Life Initiative; Compendium of OECD Well-Being Indicators. See also SEM, May 2011, No. 5, vol. XVI, IMAD and SEM, July/August 2013, No. 7, vol. XIX, IMAD. 35 The civic engagement component includes two indicators, consultation on rule-making and voter turnout. Table 14: Rankings of OECD countries, Brazil and Russia, according to the BLI and 11 components, 2014 Country OQ d nI ^ g in 'Irt 3 o X d n a u duE no e g ic d s n ial tion onc nal yrit m nn to ^ k al tal E C 10 ovinrqua E s tu al e X n io tifac Is Li Australia 1 12 6 4 11 1 10 5 30 2 2 11 Norway 2 15 2 3 17 8 11 17 5 7 14 2 Sweden 3 10 13 14 6 2 17 27 6 1 6 7 Denmark 4 16 9 17 9 5 3 20 1 6 21 3 Canada 5 0 10 2 12 13 8 4 25 10 4 4 Switzerland 6 0 1 13 15 32 6 21 19 14 3 1 United States 7 0 11 1 19 16 20 14 29 17 10 17 Finland 8 18 17 15 1 12 9 9 14 5 20 9 Netherlands 9 8 3 7 8 20 15 24 4 25 12 10 New Zealand 10 25 16 9 16 4 1 8 24 4 1 12 Iceland 11 18 4 19 18 19 2 11 27 8 7 5 United Kingdom 12 13 15 18 23 6 7 3 23 3 11 19 Belgium 13 0 18 6 14 14 19 30 3 22 18 16 Germany 14 7 8 12 5 29 12 15 7 9 22 18 Ireland 15 20 25 5 20 11 4 7 9 13 8 20 Austria 16 9 5 22 22 15 5 13 26 20 19 6 Luxembourg 17 0 7 16 31 7 27 25 10 16 15 14 France 18 11 21 11 27 25 18 26 12 11 16 22 SLOVENIA 19 24 22 21 13 10 13 16 22 23 23 27 Japan 20 0 12 24 7 27 21 1 31 24 32 28 Spain 21 21 35 8 29 21 14 22 2 27 9 24 Italy 22 14 28 23 30 23 16 23 13 26 17 26 Czech Republic 23 27 23 25 10 30 29 10 18 19 26 21 Israel 24 17 20 28 28 34 24 31 33 29 5 15 Korea 25 23 14 20 4 3 34 6 34 30 31 25 Slovak Republic 26 28 32 29 24 31 26 12 16 15 27 29 Poland 27 29 30 34 2 17 23 2 28 31 29 30 Estonia 28 33 29 26 3 35 25 32 15 12 34 32 Portugal 29 22 33 10 32 33 30 28 20 18 24 33 Hungary 30 30 31 31 21 22 28 18 11 21 35 34 Chile 31 32 26 32 33 26 31 33 32 35 25 23 Brazil 32 36 27 27 35 24 22 35 21 28 33 13 Russian Federation 33 31 19 35 26 36 32 34 8 34 36 31 Greece 34 26 36 30 25 28 36 19 17 32 13 36 Mexico 35 34 24 33 36 18 35 36 35 33 30 8 Turkey 36 35 34 36 34 9 33 29 36 36 28 35 Source: http://www.oecdbetterlifeindex.org/ The Better Life Index is part of a larger OECD Better Life Initiative36 and the "beyond GDP"paradigm, which, among other things, provides insight into the distribution of well-being according to different criteria. The OECD selected a set of indicators that are focussed on the well-being of individuals and households, and on well-being 36 For more information see the OECD website Better life initiative; http://www.oecd.org/statistics/betterlifeinitiativemeasuringwell-beingandprogress.htm outcomes, rather than macroeconomic aggregates. The distribution of well-being by gender is thus measured by nine indicators. In Slovenia, men score higher than women on seven indicators. Women score higher than men on two, life expectancy and the share of tertiary degrees awarded, while in the OECD, women score higher than men in life expectancy and life satisfaction. The share of those satisfied with life is also one of the three indicators (together with the number of hours per week spent on domestic chores and the share of poor singleadult households) where the results for women across the OECD are better than for women in Slovenia. Men in Slovenia are better off than men across the OECD when it comes to personal security and the employment rate of those with tertiary education, while they score lower on the other six indicators and the same on life expectancy. Slovenia's competitiveness according to the IMD World Competitiveness Yearbook 2014 Slovenia's ranking according to the IMD World Competitiveness Yearbook 2014 declined again this year and Slovenia remains at the bottom of the scale. This year's survey monitors 262 indicators,37 among which statistical data represent a weight of slightly more than one half. The rest are data from the surveys. As in previous years, the US, Switzerland, and highly developed Asian economies (Singapore, Hong Kong) top the list, and among EU countries, Sweden, Germany and Denmark. Among the 60 countries included in the survey, Slovenia slipped to 55'h place, which is 3 ranks lower than last year and 23 ranks lower than in 2008.38 Only Bulgaria, Greece and Croatia fare worse than Slovenia among the EU countries analysed. This year's report shows deterioration in the overall ranking in most of the countries surveyed, among them also in 20 of 26 countries in the EU. Figure 41: Comparison of Slovenia's and EU countries competitiveness according to the IMD World Competitiveness Yearbook - overall ranking 80 70 50 1^40 20 10 0 u—IQ-L^Q-I^ ccn; miJIC Source: IMD. Note: The value of the IMD world competitivensess indicator is between 0 and 100. A higher value is better. Government efficiency and business efficiency remain the key weaknesses of Slovenia's international competitiveness, but the indicators based on surveys have improved slightly for the first time since the beginning of the crisis. I n this year's report, Slovenia fell again in economic performance and government efficiency, while it remained at the bottom of the analysed countries in business efficiency. This year's deterioration was mainly attributable to the less favourable statistical data, as the results of the surveys did not change significantly, or were even slightly better. The report finds Slovenia's key competitive advantages in its well-educated workforce and reliable infrastructure, while its international competitiveness is hindered by an inefficient legal and regulatory framework and inefficient government and public administration. Economic performance in Slovenia has deteriorated again in the last year compared with other countries. The deterioration in both the rank and the indicator value, also relative to other countries, is mainly attributable to the strong worsening of some key macroeconomic indicators. In the last year Slovenia has fallen particularly in the category of employment, which is linked to the further tightening of labour market conditions. Its ranking also remains low on the indicators of domestic economy, where Slovenia has slipped as much as 36 places since the beginning of the crisis.39 In the area of international investments, direct investment flows (inward) remain modest. However, the managers surveyed are less pessimistic when it comes to moving production, services and research abroad, the values of these indicators being the highest in the last three years. The ranking in international trade improved substantially, which can be attributed to the higher values of export competitiveness indicators (world market share, unit labour costs) and the increased current account surplus. Government efficiency, which is essential for the proper functioning of the economy, declined in comparison with other countries. The deterioration is mainly linked to the tightened public finance situation (by 13 places in the last year) as a result of the increase in public debt and the general government deficit, which was the highest thus far in 2013, amid one-off high expenditure due to bank recapitalisations. The managers surveyed expressed dissatisfaction with the 2013 increase in the VAT rate, which showed in Slovenia slipping by 3 ranks in the area of fiscal policy. Slovenia continues to score very low in institutional competitiveness, as the managers remain dissatisfied with institutions (the government and the central bank), the low adaptability of government policies to changes in the economy, bureaucracy and the level of corruption. Although the values remain low, the surveys show that the managers' confidence has stopped deteriorating in most of these areas. Higher confidence 37 Among 355 indicators listed in the IMD report, 262 were used in calculating the world competitiveness index; 144 of them are statistical indicators, while 118 are indicators based on surveys. Statistical data are largely based on data for 2013. 38 In 2008, 55 countries were analysed. 39 The pre-crisis benchmark is the IMD survey from 2008, which is based on the statistical data from 2007 and the survey data from the first half of 2008; it has to be noted that, due to this time lag, certain macroeconomic indicators also improved in the survey from 2009. 100 90 (u 60 30 Table 15: IMD world competitiveness indicators by main categories 2008 2009 2010 2011 2012 2013 2014 Rank Rank Rank Rank Rank Rank Rank Overall competitiveness 32 32 o 52 - 51 + 51 o 52 - 55 - Economic performance 25 21 + 42 - 43 - 43 o 51 - 52 - Domestic economy 22 16 + 52 50 + 56 58 58 o International trade 10 19 29 41 26 + 37 17 + International investment 54 53 + 55 58 - 57 + 60 - 59 + Employment 39 29 + 36 46 49 47 + 51 Prices 8 12 - 15 8 + 2 + 7 - 10 - Government efficiency 43 38 + 53 53 o 53 o 53 o 56 - Public finance 21 14 + 44 42 + 56 - 47 + 60 - Fiscal policy 51 49 + 53 53 o 51 + 49 + 51 Institutional framework 33 30 + 46 53 52 + 54 54 o Business legislation 47 39 + 49 50 - 47 + 48 - 45 + Social framework 37 30 + 46 34 + 42 37 + 31 + Business efficiency 32 39 - 57 56 + 57 - 58 - 58 o Productivity & efficiency 18 21 50 37 + 40 45 43 + Labour market 39 40 - 54 54 o 51 + 54 - 58 - Financial markets 28 41 53 56 57 58 59 Management practices 30 39 54 57 56 + 58 59 Attitudes and values 46 47 - 57 57 o 56 + 59 - 59 O Infrastructure 29 27 + 34 31 + 33 - 33 O 32 + Basic infrastructure 33 35 - 40 40 o 38 + 39 - 41 - Technological infrastructure 28 31 36 37 40 42 42 O Scientific infrastructure 32 30 + 38 37 + 35 + 32 + 31 + Health and environment 30 25 + 30 29 + 29 o 29 o 29 O Education 27 23 + 25 26 26 o 30 29 + Source: IMD World Competitiveness Yearbooks between 2008 and 2014. Note: Rank means Slovenia's ranking among 55 countries in 2008, 57 countries in 2009, 58 countries in 2010 and 59 countries in 2011 and 2012 and 60 countries in 2013 and 2014; "+" means a rise in Slovenia's ranking relative to the previous year, while incicates a fall. "o" that there was no change. is also reflected in a slight improvement of Slovenia's ranking in business legislation and societal framework, but the managers nevertheless cited undeclared work and labour market legislation as significant obstacles to their business operations. Slovenia retained its place in business efficiency, remaining at the bottom of the countries covered in the survey on this indicator. Its low rank is related to the lack of corporate values and basic ethical practices, as well as the deficiencies related to business finance and labour market regulation. Slovenia continues to be at the bottom of the scale in corporate governance, particularly regarding the effectiveness of corporate boards, credibility of managers and political interference in the management of public companies, as well as in terms of employment opportunities for promising workforce. Despite the beginning of the banking system stabilisation at the end of last year, the managers continue to estimate financial risks as high, among the highest in all countries analysed. The main barriers in the category of business finance are poor banking and financial services, banking and financial regulation and high corporate debt, which has been pointed out as a serious imbalance of Slovenia by international institutions for several years. Slovenia continues to score best in infrastructure (32nd), where its ranking has even improved slightly in the last year.The report highlights education, health, environment and scientific infrastructure among Slovenia's strengths in this category. Slovenia has increased the volume of R&D investment significantly in recent years, as well as the number of researchers and the share of population with a tertiary education, but this has not yet yielded sufficient results. Slovenia thus lags behind other countries in the category of technological development, particularly with regard to the efficiency of regulation and knowledge transfer to the business sector. Business results of companies in 2013 In 2013 commercial companies' performance deteriorated further due to slightly higher loss from financial operations. The overall net business result otherwise remained positive, but was, at EUR 169.2 m, the lowest since the beginning of the crisis, with the exception of 2010 when it was negative. Last year's deterioration reflected an increase in financial loss, after it had already started to decline in the previous two years. The result from extraordinary activities also declined, but this is a relatively less important component of the overall performance than financial and operating items. The positive business result was thus mainly due to the operating profit, which has not increased much since 2009 when it declined by approximately four tenths. The comparison of the overall business results over time is also significantly impacted by the results of failed companies. Companies that ceased their business operations last year had generated approximately EUR 400 m in losses in the previous year, which is less than in the preceding two years. Figure 42: Net profit/loss of companies and its main components ■ Net financial profit/loss Net operating profit/loss ♦ Net profit/loss in the accounting period -;-;-;-;-;-;- 5,000 4,000 3,000 2,000 1,000 0 -1,000 -2,000 -3,000 T-;-;-r- SiiiiiU- M M ™ ♦ i: J rN rN rN rN rN rN rN Source: AJPES; calculations by IMAD. The increase in the operating profit in 2013 was, as in the entire period since 2009, mainly underpinned by activities of the tradable sector. After deteriorating in 2012, business results improved in most major activities in the tradable sector40 (transportation, industry, trade and accommodation and food service activities). The operating profit in the non-tradable sector declined further, in the last two years mainly on account of companies in financial activities (excluding banks and other financial intermediaries41) and real estate. For the first time in three years, the construction sector recorded operating profit last year (although it accounted for only slightly more than a tenth of that in 2008). With improved operating efficiency, value added in the tradable sector also rose again last year, after a one-year break (in nominal terms by 1.5%, in all companies by 0.5%), while value added in the non-tradable sector continues to decline. 40 The tradable sector includes: A agriculture, forestry and fishing; B-E industry excluding construction; G-I trade, transportation, accommodation and food service activities; J information and communication (European Commission, Quarterly report on the euro area, Volume 12 N. 2, 2013). 41 Banks and other financial intermediaries are not included in the AJPES database of statistical data on companies' performance. Figure 43: Operating profit of companies -----Tradable sector -Non-tradable sector -Manufacturing 3,000 2,500 2,000 1,500 1,000 500 2008 2009 2010 2011 2012 Source: AJPES; calculations by IMAD. 2013 In 2013 companies' performance continued to be favourably impacted by the rising export revenues. Among the operating revenue components, net revenues from sales on the foreign market continued to increase (albeit at a slower pace than in previous years), while net sales revenues on the domestic market declined further. Having been rising since 2009, in 2013 the sales on the foreign market thus exceeded the 2008 level by slightly more than a tenth in nominal terms, while the sales on the domestic market, where no visible improvement has yet been seen since the beginning of the crisis, lagged 15% behind. In the circumstances of subdued domestic demand, the sales on the foreign market increase in both tradable and non-tradable sector activities. Figure 44: Revenues from sales on the domestic and foreign markets -Revenues from sales on the foreign market 28 26 24 -Revenues from sales on the domestic market (right axis) S 22 20 18 16 .............. / \................. ; ; X : 58 56 54 52 50 48 46 2008 2009 2010 201 1 2012 2013 Source: AJPES; calculations by IMAD. 0 The negative impact of cost pressures on profitability has also been declining in the recent period. Since the beginning of the crisis, the profitability of companies was, in addition to weak demand, also negatively impacted by cost pressures. Until 2010 they were mainly a consequence of the rising unit labour costs. These have declined in the last three years, but remain higher than in 2008. Owing to the growth of commodity prices and the depreciation of the euro, the terms of trade also deteriorated significantly in 2010-2012, as did, in turn, the ratio of costs of goods, material and services to operating revenues, which improved slightly only in 2013. Figure 45: Unit labour costs and the costs of goods, material and services per operating revenue -Costs of goods, material and services/operating revenue -Labour costs/VA (right axis) 2008 2009 2010 2011 2012 2013 Source: AJPES; calculations by IMAD. In the structure of the overall business result, financial loss continues to account for a relatively significant share. At EUR 1.72 bn, it was otherwise around a fifth lower than in 2010, when it had deepened substantially, but still exceeded the level in the initial period of the crisis (2008-2009) when the first signs of deterioration had already been seen.42 The substantial financial loss is also accounted for by the persistently high level of financial expenses and falling financial revenues, which in 2013 were already half lower than in 2008. Among financial expenses, write-offs and impairment are relatively high, in particular, while expenses from financial liabilities declined notably in the last two years. Expenses related to impairment and write-offs accounted for half, and expenses from financial liabilities (especially bank loans) for around 40% of all financial expenses. Both categories of expenses increased substantially during the crisis. Impairment and write-offs, having reached the highest level in 2010, started to rise again in 2013 and were only 5% lower than their peak in 2010. In the last two years impairment and write-offs increased primarily in the tradable sector (most notably in activities of manufacturing and trade). In the non-tradable sector they decreased, largely due to the decline in companies in financial activities43 (excluding the banks and other financial intermediaries). Since 2008 (when they were highest), expenses from financial liabilities have mainly been falling. Expenses attributable to bank loans, accounting for the largest share, have almost halved since the beginning of the crisis. They declined the most in the last two years, reaching EUR 760 m in 2013, which is a sign of intense deleveraging processes in the Slovenian corporate sector. Figure 46: Breakdown of financial expenses and financial revenues Other financial expenses Financial expenses related to impairment and write-offs Financial expenses from financial liabilities -Financial revenues 4,500 4,000 3,500 3,000 E 2,500 cc ZD 2,000 1,500 1,000 500 0 2008 2009 2010 2011 2012 2013 Source: AJPES; calculations by IMAD. Figure 47: Deleveraging of companies at banks ■ Change in liabilities to banks of surviving companies 1.0 0.5 0.0 -0.5 JŠ -1.0 cc ZD -2.0 -2.5 -3.0 ■ Business closure 2009 2010 2011 2012 2013 Source: AJPES; calculations by IMAD. 42 The financial loss in 2008 was mainly due to the deterioration in the values of stocks, companies' shares and other financial assets as a consequence of the international financial crisis. 43 Impairments and write-offs in this sector declined by half relative to the peak in 2010, but were in 2013 still at a similar level as in manufacturing and trade. 64.0 63.5 62.5 75.5 61.5 61.0 74.5 60.5 In 2013 companies continued to deleverage. The ratio of debt to total liabilities declined further in 2013 (to 60.0%, by 5.2 percentage points in five years). Given the extremely unfavourable situation in the banking system, financial liabilities to banks, in particular, declined substantially in 2012 and 2013. The surviving companies were also deleveraging strongly in these two years. Until and including 2011, the indebtedness of companies at banks declined due to the closures of failing companies, while the surviving companies continued to increase their exposure to banks, in contrast to 2012 and, even more, 2013, when they were reducing their liabilities to banks. X "ö C O a a (O "iS u (O (O MAIN INDICATORS 2009 2010 2011 2012 2013 2014 2015 2016 Spring forecast 2014 GDP (real growth rates, in %) -7.9 1.3 0.7 -2.5 -1.1 0.5 0.7 1.3 GDP in EUR million (current prices) 35,420 35,485 36,150 35,319 35,275 35,634 36,255 37,219 GDP per capita, in EUR (current prices) 17,349 17,320 17,610 17,172 17,128 17,270 17,551 18,001 GDP per capita (PPS)1 20,200 20,600 21,200 21,400 GDP per capita (PPS EU27=100)' 86 84 84 84 Gross national income (current prices and current fixed exchange rate) 34,823 35,028 35,759 34,931 35,069 34,916 35,353 36,253 Gross national disposable income (current prices and current fixed exchange rate) 34,519 34,875 35,680 34,721 34,796 35,004 35,396 36,149 Rate of registered unemployment 9.1 10.7 11.8 12.0 13.1 13.6 13.5 13.1 Standardised rate of unemployment (ILO) 5.9 7.3 8.2 8.9 10.1 10.2 10.0 9.7 Labour productivity (GDP per employee) -6.2 3.5 2.4 -1.7 0.9 0.9 0.7 0.8 Inflation,2 year average 0.9 1.8 1.8 2.6 1.8 0.3 1.1 1.5 Inflation,2 end of the year 1.8 1.9 2.0 2.7 0.7 0.8 1.4 1.6 INTERNATIONAL TRADE - BALANCE OF PAYMENTS STATISTICS Exports of goods and services3 (real growth rates, in %) -16.1 10.2 7.0 0.6 2.9 4.2 4.8 5.2 Exports of goods -16.6 12.0 8.2 -0.1 2.9 4.6 5.2 5.5 Exports of services -14.0 3.5 1.9 3.7 2.6 2.6 3.3 4.2 Imports of goods and services3 (real growth rates, in %) -19.2 7.4 5.6 -4.7 1.3 3.5 5.2 5.3 Imports of goods -20.2 8.3 6.6 -5.1 1.5 3.6 5.5 5.6 Imports of services -12.4 2.6 -0.6 -2.2 -0.4 2.9 3.2 3.6 Current account balance, in EUR million -173 -50 146 1,159 2,279 2,442 2,338 2,328 As a per cent share relative to GDP -0.5 -0.1 0.4 3.3 6.5 6.9 6.4 6.3 Gross external debt, in EUR million 40,318 40,723 40,100 40,849 39,566 41.966* As a per cent share relative to GDP 113.8 114.8 110.9 115.7 112.2 Ratio of USD to EUR 1.393 1.327 1.392 1.286 1.328 1.365 1.366 1.366 DOMESTIC DEMAND - NATIONAL ACCOUNTS STATISTICS Private consumption (real growth rates, in %) -0.1 1.5 0.8 -4.8 -2.7 -0.4 0.7 1.8 As a % of GDP4 54.8 56.4 56.8 56.3 56.0 55.2 55.1 55.3 Government consumption (real growth rates, in %) 2.5 1.3 -1.6 -1.3 -2.0 -1.5 -0.9 -0.9 As a % of GDP4 20.2 20.8 20.8 20.8 20.2 19.9 19.5 19.1 Gross fixed capital formation (real growth rates, in %) -23.8 -15.3 -5.5 -8.2 0.2 -0.5 1.0 0.0 As a % of GDP4 23.1 19.7 18.6 17.8 17.9 17.7 17.8 17.7 Sources of data: SURS, BS, Eurostat, calculations and forecasts by IMAD (Spring Forecast, March 2014). Notes: 1Measured in purchasing power standard. ^Consumer price index. 3Balance of payments statistics (exports F.O.B., imports F.O.B.); real growth rates are adjusted for inter currency changes and changes in prices on foreign markets. 4Shares GDP are calculated for GDP in current prices at fixed exchange rate (EUR=239.64). 5End March 2014. PRODUCTION 2011 2012 2013 2012 2013 2014 2012 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 4 5 6 7 INDUSTRIAL PRODUCTION, y-o-y growth rates, % Industry B+C+D 1.3 -1.1 -0.7 -0.2 -1.6 -0.4 -2.3 -2.3 -1.4 -0.8 1.8 2.4 2.2 -3.9 -2.6 3.6 B Mining and quarrying -7.9 -7.4 1.3 -10.2 -2.3 -3.5 -13.3 6.7 -9.6 -7.1 16.8 -2.7 -8.2 9.8 -7.0 -5.7 C Manufacturing 1.1 -2.3 -1.3 -1.0 -3.0 -2.1 -3.1 -3.6 -1.7 -1.1 1.4 2.8 1.9 -5.5 -4.9 1.8 D Electricity, gas & steam supply1 5.0 10.5 3.9 8.3 12.7 16.1 6.1 7.0 1.9 3.2 3.1 0.1 5.6 9.4 24.0 22.6 CONSTRUCTION,2 real indices of construction put in place, y-o-y growth rates, % Construction, total -24.8 -16.8 -2.6 -15.3 -16.7 -13.2 -21.6 -24.5 -10.5 -3.4 22.4 37.2 -13.5 -23.8 -11.7 -19.6 Buildings -39.7 -17.3 -20.4 -13.0 -6.7 -18.1 -30.0 -40.9 -25.1 -16.6 5.1 4.0 -7.2 -15.6 4.4 -23.9 Civil engineering -15.3 -16.6 6.2 -21.2 -20.9 -10.1 -16.2 -8.5 -2.6 1.7 26.6 54.6 -18.6 -26.5 -17.0 -17.1 TRANSPORT, tonne-km in m, y-o-y growth rates, % Tonne-km in road transport 3.2 -3.4 0.1 6.0 -5.3 -5.9 -7.8 -2.9 -1.8 3.9 1.8 Tonne-km in rail transport 9.7 -7.5 9.5 -8.7 -8.0 -5.8 -7.5 -0.1 0.4 13.4 24.9 Distributive trades, y-o-y growth rates, % Total real turnover* 3.3 -3.6 -1.0 0.6 -4.3 -4.9 -5.6 -7.1 2.1 -2.2 3.2 2.5 -4.0 -5.2 -3.7 -0.6 Real turnover in retail trade 1.5 -2.2 -3.7 2.5 -2.7 -2.7 -5.8 -7.0 -2.6 -4.6 -0.8 -0.9 -3.5 -3.1 -1.6 -0.6 Real turnover in the sale and maintenance of motor vehicles 7.0 -6.3 4.7 -2.8 -7.2 -10.1 -5.3 -7.2 11.1 3.4 11.6 8.7 -5.0 -8.8 -7.7 -0.6 Nominal turnover in wholesale trade & commission trade 6.0 0.8 -0.2 3.8 -0.6 1.4 -1.3 -5.1 1.1 -1.4 4.7 6.2 0.0 0.4 -2.2 7.2 TOURISM, y-o-y growth rates, %, new methodology from 2009 onwards Total, overnight stays 5.3 1.2 0.3 0.7 1.2 1.2 1.9 -3.4 -1.5 2.9 0.6 -2.0 -0.9 7.9 -1.9 1.3 Domestic tourists, overnight stays 0.5 -4.9 -3.4 -0.5 -4.6 -7.5 -5.2 -6.1 -5.3 -2.4 0.5 -3.4 -14.3 -1.6 0.9 -9.9 Foreign tourists, overnight stays 9.1 5.6 2.8 2.0 5.1 6.3 8.1 -0.6 0.9 5.6 0.7 -0.6 9.4 14.1 -3.7 8.4 Nominal turnover market services (without distributive trades) 3.7 -1.1 -1.4 -0.6 0.5 -0.4 -3.7 -6.1 -3.0 0.5 2.9 3.2 -0.9 2.6 -0.1 1.1 AGRICULTURE, y-o-y growth rates, % Purchase of agricultural products, SIT bn, since 2007 in EUR m 478.9 480.4 478.4 108.4 110.4 128.4 134.5 104.4 111.1 123.2 139.6 113.6 37.0 38.3 35.1 47.2 BUSSINES TENDENCY (indicator values**) Sentiment indicator -7 -17 -13 -12 -16 -19 -20 -15 -14 -13 -12 -8 -16 -15 -18 -18 Confidence indicator - in manufacturing -1 -11 -5 -6 -11 -14 -13 -9 -6 -4 -3 -1 -10 -10 -13 -12 - in construction -46 -41 -22 -41 -44 -40 -39 -30 -22 -18 -18 -14 -43 -45 -44 -41 - in services 1 -12 -12 -8 -9 -14 -17 -12 -13 -11 -11 -4 -8 -7 -11 -12 - in retail trade 8 2 1 5 4 1 -4 -3 1 6 2 5 9 -1 4 -2 Consumer confidence indicator -25 -35 -33 -27 -36 -39 -36 -29 -34 -34 -35 -29 -39 -33 -37 -36 Source of data: SURS. Note: 1Only companies with activity of electricity supply are included. 2The survey covers all larger construction enterprises and some other enterprises that perform construction work. *Total real turnover in retail trade, the sale and repair of motor wehicles, and retail sale of automotive fuels. **Seasonally adjusted data. 2012 2013 2014 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 3.1 -6.7 5.2 -4.9 -7.5 0.2 -0.4 -6.1 3.1 -2.2 -4.9 1.4 -5.4 1.0 -1.3 -0.1 8.1 1.3 0.2 5.4 - 1.4 -5.8 1.2 -17.9 -24.9 -11.6 9.9 23.2 -4.0 -11.0 -13.7 2.4 -1.1 -21.7 -8.0 74.1 31.1 -0.3 -30.7 1.6 -8.4 4.7 -5.5 -9.1 -1.0 -0.6 -8.3 2.9 -2.5 -5.2 1.4 -6.4 0.8 -1.9 -0.1 7.8 1.8 0.4 5.9 16.2 9.8 11.8 2.3 4.9 11.3 0.0 10.2 6.1 0.7 -0.9 1.9 1.7 6.2 5.1 -1.3 5.5 -4.8 -0.9 6.3 - -14.4 -6.4 -22.5 -26.1 -14.8 -23.2 -14.0 -31.7 -18.7 -11.6 -2.0 1.8 -5.3 -5.9 28.2 31.4 5.6 35.2 29.2 44.7 -11.9 -18.6 -34.6 -19.4 -35.4 -38.2 -28.0 -50.1 -36.2 -24.2 -14.1 -19.1 -19.6 -11.4 10.8 3.0 0.7 6.4 3.4 2.8 -15.7 1.2 -15.0 -27.2 -2.1 -8.6 -0.6 -13.6 -6.3 -5.9 3.5 11.0 2.2 -5.5 31.8 41.5 4.8 50.2 42.6 66.5 - - - - - - - - - - -3.7 -10.3 -3.4 -5.4 -7.9 -4.9 -8.6 -7.7 2.7 1.2 2.5 -4.3 -3.4 1.4 2.2 2.7 4.7 2.4 1.9 3.1 - -0.8 -6.6 -4.1 -5.8 -7.4 -4.4 -9.4 -7.2 -1.8 -2.0 -4.0 -5.2 -4.6 -4.0 -1.0 -1.4 0.0 -1.0 -0.9 -0.7 -10.8 -17.9 -2.1 -4.5 -9.2 -5.7 -7.4 -8.5 11.3 6.8 15.4 -2.7 -0.2 14.0 8.4 10.4 16.3 8.8 7.0 10.1 2.8 -5.4 4.9 -2.1 -6.5 1.6 -5.6 -10.9 5.8 -0.9 -1.3 0.7 -4.6 -0.2 2.3 1.8 10.2 5.1 5.7 7.8 2.5 -1.4 -3.5 9.3 2.2 -10.5 0.2 0.6 -11.6 9.2 -2.4 3.4 2.2 3.2 4.0 -3.2 0.1 -0.4 -3.4 -2.1 - -4.1 -9.8 -6.6 -8.1 -0.7 -10.0 -1.3 -8.2 -6.0 2.0 -10.0 0.7 -4.6 -3.5 4.3 -2.3 -0.9 -6.9 -5.7 2.4 6.3 3.1 -1.3 28.2 4.9 -10.8 2.5 9.3 -15.0 13.3 2.6 4.8 5.8 6.4 3.8 -4.0 1.1 4.3 -0.2 -5.8 0.6 -2.9 -4.2 -0.3 -6.6 -7.4 -3.5 -7.3 -2.7 -3.1 -3.3 0.9 -0.6 1.3 4.0 0.7 4.1 1.6 2.4 5.7 37.9 43.3 47.1 41.0 46.3 33.9 32.2 38.4 37.5 38.7 34.9 45.1 37.1 41.0 49.3 41.7 48.5 38.4 36.0 39.2 - - -19 -21 -22 -20 -17 -16 -15 -13 -14 -15 -14 -14 -12 -12 -13 -11 -12 -9 -9 -6 -5 0 -15 -16 -15 -14 -10 -11 -8 -8 -9 -5 -3 -4 -4 -4 -5 -2 -2 -3 0 1 1 3 -38 -41 -42 -40 -35 -30 -30 -31 -25 -22 -20 -22 -16 -16 -17 -17 -19 -16 -17 -8 -14 -3 -14 -16 -19 -18 -14 -13 -13 -11 -9 -15 -14 -11 -9 -13 -12 -9 -11 -5 -6 -2 4 9 -2 8 -7 -5 0 2 -9 -2 -5 -8 15 16 0 3 13 -6 -2 10 2 3 3 17 -36 -45 -38 -37 -34 -31 -31 -26 -27 -38 -38 -37 -33 -31 -35 -35 -34 -30 -30 -27 -29 -25 LABOUR MARKET 2011 2012 2013 2012 2013 2014 2012 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 4 5 6 FORMAL LABOUR FORCE (A=B+E) 934.7 920.2 913.4 926.6 923.7 915.2 915.2 912.9 913.8 910.5 916.5 912.9 926.0 923.7 921.3 PERSONS IN FORMAL EMPLOYMENT (B=C+D)' 824.0 810.0 793.6 812.7 816.5 809.1 801.7 789.2 795.0 794.4 795.8 784.2 816.9 816.9 815.7 In agriculture, forestry, fishing 38.8 37.0 38.2 35.2 37.8 37.4 37.4 37.4 38.9 38.1 38.4 31.7 37.7 37.8 37.9 In industry, construction 272.9 263.1 252.2 265.4 266.3 263.1 257.5 249.9 252.5 253.5 252.9 249.0 266.6 266.6 265.7 Of which: in manufacturing 184.8 182.9 177.7 184.6 184.1 182.5 180.4 177.8 177.6 177.5 177.8 177.3 184.4 184.2 183.8 in construction 67.8 59.8 54.3 60.5 61.6 60.1 56.9 52.0 54.6 55.7 54.6 51.5 61.7 61.8 61.4 In services 512.3 510.0 503.2 512.1 512.4 508.6 506.8 502.0 503.6 502.8 504.6 503.5 512.6 512.5 512.1 Of which: in public administration 51.4 50.7 49.1 50.9 51.2 50.8 50.0 49.3 49.3 49.1 48.9 48.7 51.1 51.2 51.2 in education, health-services, social work 118.8 120.9 121.0 120.7 121.6 120.3 121.0 120.7 121.1 120.5 121.6 121.6 121.6 121.7 121.4 FORMALLY EMPLOYED (C)1 729.1 717.0 698.7 720.9 722.7 716.2 708.4 696.1 700.0 699.6 699.2 693.8 723.0 723.1 722.1 In enterprises and organisations 671.8 662.6 647.6 666.4 667.4 661.4 655.1 645.8 648.5 647.9 648.1 645.2 667.7 667.7 666.7 By those self-employed 57.2 54.5 51.1 54.5 55.4 54.8 53.3 50.2 51.5 51.7 51.1 48.6 55.3 55.4 55.3 SELF-EMPLOYED AND FARMERS (D) 94.9 93.0 94.9 91.8 93.8 92.9 93.3 93.1 95.0 94.7 96.6 90.4 93.9 93.8 93.6 REGISTERED UNEMPLOYMENT (E) 110.7 110.2 119.8 114.0 107.2 106.1 113.5 123.7 118.8 116.1 120.7 128.8 109.1 106.8 105.6 Female 52.1 52.2 57.4 53.2 51.0 50.9 53.8 57.0 56.7 57.0 58.9 61.2 51.7 50.9 50.5 By age: under 26 12.9 11.9 13.8 12.7 10.8 10.1 14.0 14.2 13.0 12.3 15.6 16.1 11.4 10.7 10.3 aged over 50 39.0 38.2 38.9 39.2 38.1 37.4 38.1 40.7 39.3 38.1 37.3 39.0 38.5 38.1 37.7 Osnovnošolska izobrazba ali manj 34.1 33.3 34.2 35.2 32.9 31.8 33.2 36.5 34.1 32.6 33.6 36.4 33.6 32.8 32.3 For more than 1 year 50.2 55.2 54.9 57.2 55.1 54.5 53.9 54.4 54.3 55.0 57.7 60.7 55.4 55.0 54.7 Those receiving benefits 36.3 33.9 33.0 37.8 33.2 31.5 33.0 39.3 33.7 30.3 28.7 32.7 34.2 33.4 31.9 RATE OF REGISTERED UNEMPLOYMENT, E/A, in % 11.8 12.0 13.1 12.3 11.6 11.6 12.4 13.5 13.0 12.8 13.2 14.1 11.8 11.6 11.5 Male 11.4 11.5 12.5 11.9 11.1 11.0 11.9 13.4 12.5 11.9 12.4 13.5 11.3 11.0 10.9 Female 12.4 12.6 13.8 12.7 12.3 12.3 13.0 13.8 13.7 13.8 14.1 14.8 12.4 12.2 12.2 FLOWS OF FORMAL LABOUR FORCE 2.7 5.3 6.0 -1.9 -5.2 -0.2 12.6 4.6 -6.0 -1.9 9.3 2.7 -1.8 -2.3 -1.2 New unemployed first-job seekers 14.4 16.3 19.1 2.4 1.9 3.0 9.0 3.7 2.6 3.4 9.4 4.2 0.7 0.6 0.6 Redundancies 82.2 90.3 88.7 22.6 17.9 20.9 28.9 27.1 18.5 19.6 23.5 25.9 6.5 5.8 5.6 Registered unemployed who found employment 61.0 58.3 65.1 17.3 14.0 13.5 13.5 17.2 18.1 15.8 14.1 20.7 5.5 4.7 3.9 Other outflows from unemployment (net) 32.8 43.1 37.3 9.6 11.1 10.7 11.8 9.2 9.1 9.2 9.9 6.8 3.5 4.1 3.5 WORK PERMITS FOR FOREIGNERS 35.6 33.9 30.5 34.2 34.4 33.9 33.2 32.6 31.7 29.8 27.8 26.3 34.7 34.4 34.1 As % of labour force 3.8 3.7 3.3 3.7 3.7 3.7 3.6 3.6 3.5 3.3 3.0 2.9 3.7 3.7 3.7 Source of data: SURS, PDII, ESS. Note: 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. ^According to ESS. 2012 2013 2014 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 917.4 914.5 913.8 918.0 916.5 911.0 913.0 912.9 912.7 914.3 914.0 913.1 911.5 909.8 910.2 916.7 917.5 915.3 911.4 913.0 914.4 810.5 808.4 808.3 807.1 805.0 792.9 788.7 788.9 790.1 793.0 795.4 796.5 794.4 793.2 795.5 798.0 798.2 791.3 781.6 783.3 787.7 37.2 37.4 37.6 37.5 37.4 37.4 37.5 37.3 37.4 38.7 39.0 39.1 38.1 38.1 38.1 38.5 38.4 38.4 31.6 31.7 32.0 264.0 263.2 262.2 261.1 259.5 251.9 249.8 249.5 250.3 251.6 252.6 253.1 253.4 253.1 254.0 254.8 254.6 249.3 248.3 248.5 250.0 182.9 182.5 182.1 181.8 181.2 178.4 177.8 177.8 177.9 177.5 177.7 177.7 177.6 177.3 177.6 178.1 178.3 177.0 177.1 177.4 177.5 60.5 60.2 59.6 59.0 58.1 53.5 52.0 51.8 52.4 54.0 54.8 55.2 55.5 55.5 56.0 56.1 55.8 52.0 51.1 50.7 52.6 509.3 507.9 508.5 508.5 508.1 503.7 501.4 502.1 502.4 502.6 503.8 504.3 502.9 502.0 503.4 504.7 505.3 503.7 501.7 503.1 505.7 50.8 50.8 50.7 50.2 50.2 49.6 49.2 49.4 49.2 49.3 49.3 49.4 49.1 49.2 48.9 48.8 49.0 48.9 48.6 48.7 48.9 120.3 119.8 120.8 121.1 121.3 120.6 120.4 120.8 121.0 120.9 121.2 121.3 120.3 120.0 121.2 121.6 121.8 121.3 121.1 121.7 122.1 717.7 715.6 715.2 713.7 711.6 699.9 695.5 695.8 696.9 698.2 700.3 701.5 699.8 698.6 700.5 701.7 701.5 694.4 691.5 693.0 696.9 662.8 660.9 660.5 659.2 657.7 648.3 645.3 645.8 646.4 647.0 648.7 649.7 648.0 647.0 648.6 649.7 649.9 644.8 643.1 644.8 647.8 55.0 54.7 54.7 54.5 53.9 51.6 50.3 50.0 50.5 51.1 51.5 51.8 51.8 51.6 51.9 52.0 51.7 49.6 48.5 48.2 49.1 92.8 92.8 93.1 93.4 93.4 93.1 93.2 93.0 93.2 94.8 95.1 95.0 94.6 94.6 95.0 96.3 96.7 97.0 90.1 90.3 90.7 106.9 106.1 105.4 110.9 111.5 118.1 124.3 124.1 122.6 121.3 118.6 116.6 117.1 116.6 114.7 118.7 119.3 124.0 129.8 129.8 126.7 51.2 50.9 50.5 53.3 53.3 54.9 57.2 56.9 56.9 57.3 56.7 56.2 57.3 57.4 56.5 58.5 58.7 59.4 61.4 61.2 61.0 10.2 10.1 10.1 14.2 14.0 13.8 14.4 14.4 13.8 13.1 13.1 12.6 12.5 12.2 12.1 15.3 15.6 15.9 16.2 16.3 15.8 37.9 37.4 37.1 37.0 37.1 40.2 41.2 40.9 40.1 39.5 39.5 38.9 38.6 38.3 37.5 37.0 36.8 37.9 39.2 39.1 38.8 32.1 31.7 31.5 32.2 32.5 35.0 36.7 36.8 35.9 35.1 34.0 33.2 32.9 32.7 32.3 32.7 33.0 35.2 36.5 36.9 35.7 54.6 54.6 54.3 54.3 53.6 53.8 54.7 54.4 54.2 54.6 54.4 53.9 54.7 54.5 55.7 56.6 57.1 59.4 61.0 60.6 60.5 32.1 31.4 31.2 31.5 31.9 35.6 40.3 39.2 38.4 35.8 33.9 31.4 31.0 30.5 29.4 28.2 28.0 29.9 33.8 33.0 31.3 11.7 11.6 11.5 12.1 12.2 13.0 13.6 13.6 13.4 13.3 13.0 12.8 12.9 12.8 12.6 13.0 13.0 13.5 14.2 14.2 13.9 11.0 11.0 10.9 11.4 11.6 12.7 13.4 13.5 13.2 12.8 12.4 12.1 12.0 11.9 11.7 12.1 12.1 13.0 13.7 13.7 13.2 12.4 12.4 12.3 12.9 12.9 13.3 13.8 13.8 13.7 13.8 13.6 13.5 13.8 13.9 13.6 14.0 14.1 14.2 14.9 14.8 14.7 1.3 -0.8 -0.6 5.4 0.6 6.6 6.2 -0.2 -1.4 -1.3 -2.8 -2.0 0.5 -0.5 -1.9 4.1 0.6 4.7 5.8 -0.1 -3.0 0.8 0.8 1.4 6.3 1.8 0.9 1.5 1.1 1.1 1.1 0.8 0.8 1.0 0.9 1.5 6.0 2.0 1.4 1.7 1.4 1.2 8.0 5.6 7.3 8.4 8.2 12.2 14.2 6.3 6.6 7.1 6.1 5.3 7.7 5.5 6.4 7.2 7.0 9.3 13.1 6.6 6.2 4.0 4.0 5.5 4.9 5.1 3.4 6.2 4.8 6.2 6.3 6.5 5.3 5.3 4.1 6.4 5.4 5.2 3.5 6.2 6.0 8.5 3.5 3.3 3.8 4.3 4.3 3.2 3.4 2.8 3.0 3.1 3.2 2.7 2.9 2.9 3.4 3.8 3.3 2.8 2.8 2.1 1.9 33.8 33.9 33.9 33.6 33.3 32.7 32.9 32.8 32.2 32.3 32.0 31.0 30.4 29.8 29.3 28.5 27.9 27.1 26.4 26.3 26.2 3.7 3.7 3.7 3.7 3.6 3.6 3.6 3.6 3.5 3.5 3.5 3.4 3.3 3.3 3.2 3.1 3.0 3.0 2.9 2.9 2.9 WAGES AND INDICATORS OF OVERALL COMPETITIVENESS 2011 2012 2013 2012 2013 2014 2012 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 4 5 6 GROSS WAGE PER EMPLOYEE, y-o-y growth rates, % Activity - Total 2.0 0.1 -0.2 1.6 0.3 -0.7 -1.0 -1.0 -0.5 0.3 0.6 0.9 1.0 1.3 -1.3 A Agriculture, forestry and fishing 3.1 -1.1 0.9 0.1 -1.0 -1.5 -2.0 -0.8 1.1 0.0 3.0 0.4 -0.1 -0.5 -2.5 B Mining and quarrying 3.8 3.7 -2.0 8.4 10.6 2.2 -5.2 4.1 -6.8 -2.9 -2.4 2.9 4.0 14.9 13.2 C Manufacturing 3.9 2.5 2.8 3.4 2.5 2.0 2.3 1.6 2.9 3.0 3.6 3.9 2.7 3.9 1.0 D Electricity, gas, steam and air conditioning supply 2.3 3.3 3.0 5.6 3.9 4.9 -0.5 6.2 2.8 3.6 -0.1 5.2 5.2 6.5 0.3 E Water supply sewerage, waste management and remediation activities -0.1 0.1 0.7 2.1 -0.5 0.4 -1.4 0.3 0.1 1.0 1.3 -0.2 0.4 0.7 -2.5 F Constrution 2.0 -2.5 -1.4 -0.3 -2.8 -2.8 -3.8 -2.4 -2.1 0.1 -1.4 -0.1 -1.3 -0.4 -6.6 G Wholesale and retail trade, repair of motor vehicles and motorcycles 2.8 0.8 0.4 2.1 1.6 0.0 -0.3 -0.2 0.0 0.6 1.2 1.3 2.9 1.8 0.0 H Transportation and storage 2.7 -0.4 -0.2 2.2 0.6 -1.7 -2.3 -1.1 0.2 -0.9 0.8 0.9 1.5 2.1 -1.9 I Accommodation and food service activities 2.1 -0.8 -0.4 -0.4 -0.7 -1.0 -1.1 -1.3 -0.7 -0.6 0.9 0.6 -1.4 0.5 -1.2 J Information and communication 0.9 -0.4 -1.5 0.3 1.3 -1.2 -2.0 -0.6 -2.7 -1.1 -1.4 -2.8 2.3 1.7 -0.1 K Financial and insurance activities 0.6 1.1 0.2 4.5 -1.7 2.2 -0.3 -2.1 1.2 1.2 0.3 -0.2 -0.4 -4.4 -0.2 L Real estate activities 2.9 -0.5 -0.3 1.1 -1.3 -0.6 -1.3 -1.1 0.2 -0.6 0.2 -0.8 -0.1 -1.3 -2.4 M Professional, scientific and technical activities -0.4 -1.1 -2.4 -0.5 -0.8 -1.7 -1.3 -2.2 -3.4 -1.5 -2.6 0.1 -0.7 1.0 -2.7 N Administrative and support service activities 3.5 0.6 0.0 3.0 0.3 -0.9 0.2 -2.4 0.7 0.7 0.9 3.3 -0.2 1.7 -0.6 O Public administration and defence, compulsory social security 0.3 -1.8 -1.4 -0.2 -1.5 -3.2 -2.4 -2.4 -2.1 -0.6 -0.6 -0.9 -0.7 -0.3 -3.5 P Education 0.2 -3.3 -3.3 -0.3 -2.2 -5.0 -5.6 -5.4 -4.2 -2.0 -1.3 -1.2 -1.5 -0.4 -4.6 Q Human health and social work activities -0.7 -1.3 -2.0 -0.5 -1.0 -1.7 -2.1 -2.3 -2.3 -2.2 -1.4 -1.2 -0.3 -1.0 -1.6 R Arts, entertainment and recreation -0.7 -2.8 -3.0 -0.6 -1.5 -4.4 -4.6 -5.7 -3.8 -1.4 -1.0 -0.4 -0.9 0.0 -3.5 S Other service activities 0.9 -0.9 -0.4 0.5 -0.6 -1.0 -2.4 -0.6 -0.7 -1.1 0.9 -1.4 -0.6 0.1 -1.2 INDICATORS OF OVERALL COMPETITIVENESS1, y-o-y growth rates, % Effective exchange rate,2 nominal -0.1 -1.2 1.0 -0.5 -1.3 -1.8 -1.4 0.2 0.6 1.6 1.4 0.8 -1.2 -1.2 -1.5 Real (deflator HICP) -1.0 -1.1 1.3 -0.9 -1.3 -1.2 -0.8 0.9 0.8 2.2 1.3 0.5 -1.1 -1.4 -1.4 Real (deflator ULC) -2.3 -3.0 -1.6 -2.0 -3.3 -3.7 -2.8 -2.2 -1.3 -1.0 -2.0 USD/EUR 1.3917 1.2856 1.3282 1.3110 1.3196 1.2515 1.2974 1.3204 1.3066 1.3246 1.3611 1.3602 1.3162 1.2789 1.2526 Source of data: SURS, ECB; calculations by IMAD. Note: 1 Change of the source for effective exchange rate series as of April 2012: a new source, ECB; before that, own calculations (IMAD). 2 Harmonised effective exchange rate - a group of 20 EU Member States and 17 euro area countries; an increase in value indicates appreciation of the national currency and vice versa. 2012 2013 2014 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 -0.1 -0.7 -1.2 0.4 -2.4 -0.7 -0.3 -1.7 -1.0 -0.2 -0.8 -0.4 0.8 -0.4 0.4 0.7 0.3 0.7 0.7 1.6 0.4 1.3 -1.9 -3.9 2.5 -5.9 -2.0 1.8 -4.6 0.2 0.6 1.5 1.1 2.2 -3.6 1.5 0.9 1.9 6.2 -1.7 2.3 0.9 1.4 5.4 -0.2 1.5 1.7 -18.0 10.4 0.6 1.1 -5.4 -10.3 -4.8 -1.8 -4.9 -1.8 5.1 -13.0 3.3 -8.1 19.1 -0.9 4.3 1.3 0.3 5.2 0.5 1.4 3.5 0.3 1.1 4.4 2.3 2.0 3.4 2.0 3.7 2.4 4.4 3.9 4.0 5.3 2.4 4.0 2.6 8.3 7.8 -6.6 -0.5 5.0 2.6 10.9 6.6 0.7 1.3 10.0 3.1 -2.1 7.4 -0.9 -5.9 1.8 11.9 2.3 4.0 -0.1 -2.6 2.2 -7.0 1.5 2.7 -1.1 -0.8 1.6 -0.2 -1.1 -0.5 1.7 1.7 0.9 0.8 2.2 0.2 0.5 -1.3 -1.4 -1.9 -5.1 0.2 -6.8 -4.6 -1.2 -3.0 -2.9 -2.2 -3.2 -0.9 1.1 -1.7 0.9 -1.1 -2.5 -0.5 -1.4 0.5 0.6 0.7 0.5 -1.0 0.5 -0.8 -0.6 -0.6 -0.5 0.4 -0.5 0.6 -0.1 1.1 -0.4 1.1 0.8 1.3 1.5 0.8 0.8 2.2 -6.3 -1.3 2.7 -1.1 -3.9 -1.6 -1.1 -1.4 -0.8 0.7 0.3 -0.4 1.7 0.3 -4.7 2.5 -2.7 3.0 1.3 0.8 0.5 -0.1 -1.1 -1.9 -0.9 -0.9 -1.4 -2.4 -1.3 -0.2 0.1 -0.6 -1.7 -0.7 -1.0 -0.1 0.8 -0.6 2.4 -0.1 1.4 0.5 0.8 -1.2 -3.1 0.1 -7.1 1.6 -1.1 -0.5 -0.1 -4.3 -1.9 -1.9 -0.8 -1.8 -0.6 -1.1 -2.3 -0.9 -0.8 -0.5 -6.9 1.8 1.8 3.0 3.5 -4.0 0.3 -1.0 -3.6 -1.6 0.4 3.5 -0.1 4.0 -1.4 1.0 2.7 -3.0 1.5 0.3 0.3 -1.1 0.1 -1.0 -1.1 0.1 -2.3 -1.6 -0.4 -2.1 -0.7 -0.2 0.6 0.2 -0.3 -1.4 0.0 0.5 0.4 -0.4 -1.1 -0.9 -0.5 -0.8 -1.9 -2.4 -0.9 -1.9 -1.0 -0.3 -3.5 -2.8 -3.0 -4.1 -3.0 -2.3 -2.4 0.3 -2.1 -2.6 -3.0 -1.6 -0.3 2.3 -0.1 0.0 -2.5 1.4 -1.1 0.5 -0.5 -4.3 -2.3 1.4 0.0 0.9 0.8 0.2 1.3 1.0 2.1 -0.3 3.2 3.8 2.8 -3.4 -3.3 -2.9 -2.9 -2.6 -1.6 -1.7 -2.9 -2.6 -2.2 -3.0 -1.0 -0.4 -0.8 -0.6 0.8 -1.0 -1.5 -1.5 -0.8 -0.3 -4.8 -5.0 -5.2 -5.8 -5.8 -5.3 -5.9 -5.0 -5.4 -4.2 -5.8 -2.5 -2.4 -2.2 -1.3 -1.5 -1.4 -1.1 -0.8 -1.5 -1.2 -2.2 -2.0 -1.0 -2.8 -3.0 -0.4 -2.7 -2.5 -1.6 -3.0 -2.1 -1.7 -2.2 -1.8 -2.4 -1.8 -0.4 -1.8 -1.3 -1.4 -1.1 -4.1 -3.6 -5.4 -6.3 -3.9 -3.7 -4.7 -4.7 -7.5 -4.0 -3.2 -4.2 -0.7 -2.6 -0.9 -1.4 -0.5 -1.1 -0.4 0.8 -1.6 -0.1 -2.2 -0.7 -1.2 -4.0 -1.9 -0.8 -0.1 -0.7 1.0 -1.2 -1.9 -0.8 -1.2 -1.2 0.9 -0.5 2.3 -1.6 -1.0 -1.7 -1.8 -2.1 -1.5 -1.6 -1.7 -0.9 0.1 0.4 0.1 0.2 0.4 1.1 1.6 2.0 1.3 1.3 1.5 1.5 0.9 0.7 1.3 -1.6 -1.5 -0.5 -1.0 -1.3 -0.1 0.8 1.3 0.5 0.4 0.4 1.6 2.7 2.7 1.3 1.3 1.5 1.2 0.8 0.0 1.1 1.2288 1.2400 1.2856 1.2974 1.2828 1.3119 1.3288 1.3359 1.2964 1.3026 1.2982 1.3189 1.3080 1.3310 1.3348 1.3635 1.3493 1.3704 1.361 1.3659 1.3823 PRICES 2011 2012 2013 2012 2013 2014 2012 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 4 5 6 7 CPI, y-o-y growth rates, % 1.8 2.6 1.8 2.5 2.5 2.9 2.6 2.3 1.5 2.1 1.1 0.5 2.6 2.4 2.3 2.4 Food, non-alcoholic beverages 4.4 4.1 3.6 3.9 4.2 3.9 4.4 4.4 3.6 4.1 2.3 1.0 4.7 4.3 3.7 4.1 Alcoholic beverages, tobacco 5.7 6.5 7.0 4.2 5.1 7.2 9.5 10.6 7.5 7.4 3.0 2.7 5.1 5.2 5.1 7.4 Clothing and footwear -1.5 -0.2 0.2 -2.2 1.6 0.7 -0.8 2.1 -1.2 1.0 -0.8 -0.9 0.2 3.0 1.6 0.8 Housing, water, electricity, gas 5.6 3.8 3.1 4.9 4.2 4.4 1.8 2.1 2.9 2.8 4.6 1.4 4.0 3.7 4.9 3.9 Furnishings, household equipment 2.7 0.1 -1.2 1.2 0.0 -0.1 -0.9 -1.1 -1.8 -1.2 -0.6 -0.9 0.7 0.1 -0.7 -0.3 Medical, pharmaceutical products 1.6 0.4 -0.5 -0.2 1.4 0.2 0.3 -0.2 -2.1 0.4 0.1 -0.1 1.5 1.5 1.3 0.1 Transport 1.0 3.3 0.3 2.6 3.2 3.9 3.5 1.5 -0.5 0.5 -0.4 -0.2 4.1 2.8 2.6 2.4 Communications 1.2 -2.4 -1.2 -1.2 -2.9 -3.6 -2.0 -3.8 -1.9 1.2 -0.1 -1.4 -2.6 -3.2 -2.8 -3.1 Recreation and culture -1.5 1.4 0.1 2.6 1.2 1.2 0.4 -0.3 -0.5 0.6 0.4 0.4 0.9 1.2 1.6 1.3 Education 1.7 2.9 2.6 1.1 1.3 4.3 4.8 4.6 4.6 1.4 -0.1 -0.1 1.3 1.3 1.3 1.3 Catering services -6.8 4.5 6.5 2.3 2.5 3.7 9.4 9.2 8.8 7.0 1.6 0.9 2.8 2.6 2.1 1.4 Miscellaneous goods & services 2.2 2.4 1.3 2.5 1.2 3.3 2.8 2.4 2.7 0.5 -0.5 1.8 1.9 1.1 0.6 2.5 HCPI 2.1 2.8 1.9 2.5 2.5 3.2 3.0 2.7 1.8 2.2 1.1 0.6 2.9 2.4 2.4 2.6 Core inflation (excluding fresh food and energy) 1.3 2.0 1.6 2.2 1.8 2.0 1.9 1.9 1.4 1.9 1.2 1.3 1.9 1.9 1.7 1.9 PRODUCER PRICE INDICES, y-o-y growth rates, % Total 4.5 0.9 0.0 1.3 0.8 0.6 0.6 0.8 0.2 -0.2 -0.6 -0.8 0.7 1.0 0.7 0.8 Domestic market 3.8 1.0 0.3 1.1 0.9 0.9 1.2 1.1 0.3 0.1 -0.3 -1.0 0.7 1.3 0.8 0.9 Non-domestic market 5.3 0.7 -0.2 1.6 0.7 0.4 0.1 0.4 0.2 -0.6 -0.9 -0.6 0.8 0.8 0.5 0.6 euro area 6.1 0.1 -0.4 0.8 0.2 0.1 -0.5 0.4 0.0 -0.7 -1.3 -1.4 0.0 0.4 0.1 0.5 non-euro area 3.6 2.0 0.3 3.4 2.0 1.3 1.5 0.6 0.7 -0.3 0.0 1.1 2.8 1.7 1.4 1.0 Import price indices 5.4 1.9 -0.4 1.9 1.2 1.3 3.2 0.8 -0.5 -0.3 -1.5 -2.1 2.0 1.2 0.3 0.1 PRICE CONTROL,1 y-o-y growth rates, % Energy prices 10.9 12.7 0.2 12.1 12.5 14.5 11.6 5.6 0.1 -0.7 -4.1 -4.6 14.7 11.8 10.9 10.1 Oil products 11.9 13.0 1.7 12.3 12.7 14.4 12.6 6.4 0.4 0.4 -0.4 -0.9 15.3 11.9 10.8 9.2 Transport & communications 1.1 1.6 11.3 0.7 0.0 0.0 5.7 8.6 8.6 17.3 10.9 14.6 0.0 0.0 0.0 0.0 Other controlled prices 0.0 -0.6 -1.5 -0.2 -0.3 0.1 -1.8 -3.9 -2.9 -0.8 1.5 2.2 -0.3 -0.3 -0.3 0.1 Direct control - total 2.8 9.2 1.2 7.3 9.5 11.0 8.9 4.3 0.5 1.0 -0.8 -1.0 11.1 9.0 8.5 7.9 Source of data: SURS; calculations by IMAD. Note: 1 The structure of groups varies. Data for individual years are not fully comparable to those published previously. On 1 July 2007, the electricity market was liberalised. Since July 2007, the data are not comparable. 2 After a longer period of unchanged prices, at the beginning of 2013, the Decree on the pricing of mandatory local public services in the field of environmental protection (Official Gazette of the RS, No. 87/2012) transferred the responsibility for approving price changes to local communities. 2012 2013 2014 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 2.9 3.3 2.7 2.3 2.7 2.4 2.7 2.0 1.5 1.2 1.9 2.6 2.2 1.4 1.3 1.3 0.7 0.8 0.1 0.6 0.4 3.7 4.0 4.3 4.2 4.7 5.2 4.1 3.9 3.3 3.1 4.4 4.4 4.3 3.5 2.4 2.2 2.2 1.6 0.9 0.4 0.0 7.1 7.0 9.6 9.5 9.4 11.2 10.7 10.0 7.8 7.4 7.5 7.5 7.5 7.1 3.0 3.0 3.0 2.6 2.7 2.6 2.4 1.8 -0.3 -1.5 -1.7 0.8 1.6 6.5 -1.3 0.0 -3.1 -0.5 1.1 0.1 1.7 0.3 0.1 -2.9 -2.2 -3.2 2.5 -0.6 4.2 5.2 2.7 1.5 1.3 0.7 2.8 2.9 3.3 2.8 2.5 3.4 2.7 2.1 3.9 4.8 5.2 3.6 0.4 0.1 -0.9 0.1 -0.2 -0.8 -1.2 -0.7 -0.5 -1.5 -1.1 -2.2 -1.9 -1.4 -1.3 -0.8 -1.5 -0.4 -0.4 -0.9 -1.4 -0.5 -0.7 -0.1 0.2 0.3 0.3 0.4 0.2 -0.1 0.2 -0.7 -2.0 -2.1 -2.2 0.0 0.3 0.7 0.0 0.0 0.2 -0.2 -0.4 0.4 0.7 4.5 4.7 3.9 3.3 3.4 2.0 1.9 0.6 -0.9 -0.9 0.2 2.0 0.0 -0.4 -0.6 -0.3 -0.3 0.1 -0.9 0.2 1.3 -4.4 -3.2 -1.6 -3.3 -1.1 -3.6 -4.6 -3.2 -2.2 -2.3 -1.3 0.0 2.5 1.1 1.6 -0.5 -1.5 -1.6 -1.3 -1.4 -1.2 1.2 1.2 0.1 0.9 0.2 -0.4 -0.4 -0.1 -0.4 -0.5 -0.6 0.7 0.9 0.2 0.9 0.4 -0.1 0.7 0.3 0.0 0.5 5.9 5.7 4.8 5.0 4.7 4.6 4.7 4.7 4.6 4.6 4.6 4.6 0.1 -0.5 0.1 -0.3 0.0 0.0 -0.2 -0.2 -0.2 0.9 8.9 9.1 9.7 9.3 9.3 9.2 9.0 8.6 8.6 9.1 9.6 9.9 2.0 2.0 1.5 1.4 0.6 0.9 1.3 1.4 3.7 3.7 3.1 2.9 2.4 2.4 2.5 2.4 2.1 2.9 3.1 1.2 0.2 0.1 0.7 1.0 -3.2 1.7 1.7 1.9 1.9 3.1 3.7 3.2 2.8 3.1 2.8 2.9 2.2 1.6 1.6 2.2 2.8 2.2 1.5 1.1 1.2 0.9 0.9 0.2 0.6 1.6 2.0 2.0 1.9 1.8 2.0 1.9 2.2 1.6 1.4 1.3 1.5 2.0 2.1 1.7 1.6 1.4 0.7 1.2 1.1 1.6 1.3 0.4 0.7 0.8 0.7 0.4 0.4 1.1 0.8 0.5 0.2 0.0 -0.3 0.0 -0.4 -0.5 -0.7 -0.5 -0.5 -1.0 -0.9 -1.4 0.8 0.9 1.2 1.3 1.0 1.1 1.1 1.1 0.6 0.1 0.1 0.1 0.2 0.1 -0.2 -0.4 -0.3 -0.3 -1.1 -1.5 -1.5 0.1 0.6 0.4 0.1 -0.2 -0.3 1.0 0.5 0.5 0.3 -0.2 -0.6 -0.2 -0.9 -0.9 -1.1 -0.7 -0.6 -0.9 -0.4 -1.2 -0.5 0.2 -0.1 -0.6 -0.8 -0.8 1.2 0.7 0.3 0.0 -0.4 -0.8 -0.3 -1.0 -1.0 -1.5 -1.4 -1.2 -1.8 -1.2 -2.0 1.3 1.6 1.7 1.8 1.1 1.0 0.6 0.2 0.8 1.1 0.3 -0.3 0.0 -0.6 -0.4 -0.3 0.8 0.8 1.1 1.3 0.6 1.1 2.7 2.9 3.7 3.0 2.1 0.6 -0.3 -0.6 -1.3 0.5 1.2 -0.4 -1.6 -1.5 -2.0 -0.9 -1.5 -2.0 -2.7 -1.9 14.6 18.8 14.7 10.4 9.8 7.5 6.4 2.9 -0.6 -0.7 1.8 3.8 -1.3 -4.2 -5.9 -3.8 -2.5 -3.4 -5.7 -4.6 -2.9 14.4 19.4 15.8 11.4 10.5 8.1 7.7 3.6 -0.8 -0.9 3.1 5.5 -0.3 -3.5 -2.4 -0.2 1.6 0.8 -2.5 -0.9 1.5 0.0 0.0 0.0 8.6 8.6 8.6 8.6 8.6 8.6 8.6 8.6 17.3 17.3 17.3 17.3 8.0 8.0 14.6 14.6 14.6 15.8 0.1 0.1 -3.0 -1.1 -1.1 -3.9 -3.9 -3.9 -3.8 -3.8 -1.1 -0.8 -0.8 -0.8 2.7 0.8 0.8 3.7 1.4 1.4 6.4 11.0 14.0 10.1 8.5 8.1 5.6 4.9 2.4 -0.1 -0.3 2.0 4.3 0.5 -1.6 -1.4 -1.0 -0.1 0.1 -2.0 -1.2 0.6 BALANCE OF PAYMENTS 2011 2012 2013 2012 2013 2014 2012 Q^ Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 3 4 5 6 BALANCE OF PAYMENTS, in EUR m Current account 146 1,159 2,224 96 262 320 482 484 683 616 440 470 195 89 23 150 Goods1 -957 -110 632 -149 -45 60 24 131 236 246 19 330 4 7 -31 -21 Exports 21,450 21,631 22,105 5364 5559 5283 5424 5,390 5,644 5,444 5,626 5,701 1,992 1,807 1,862 1,891 Imports 22,407 21,741 21,473 5514 5604 5223 5400 5,259 5,408 5,199 5,607 5,371 1,988 1,800 1,892 1,912 Services 1,476 1,803 2,004 418 444 528 414 503 540 572 388 407 161 148 156 140 Exports 4,842 5,166 5,422 1118 1237 1502 1310 1,209 1325 1,558 1,330 1,184 417 392 410 434 Imports 3,365 3,363 3,418 700 793 974 896 706 785 985 942 776 256 244 254 295 Income -524 -552 -435 -145 -168 -198 -42 -72 -115 -120 -128 -181 -68 -44 -99 -25 Receipts 936 699 857 131 188 174 206 225 206 214 213 199 48 54 63 72 Expenditure 1,460 1,251 1,292 276 356 372 247 296 320 334 342 380 116 98 162 97 Current transfers 151 18 23 -28 31 -70 86 -79 22 -82 161 -87 98 -23 -3 56 Receipts 1,404 1,410 1,452 348 366 285 411 333 356 294 469 323 207 97 113 156 Expenditure 1,253 1,392 1,429 377 336 355 325 412 334 375 308 410 110 120 116 100 Capital and financial account -474 -1,206 -2,979 67 -249 -540 -484 -879 -777 -847 -476 -730 -172 -168 -162 81 Capital account -85 -92 -37 -24 11 -30 -49 -5 -40 -31 39 0 -14 24 5 -18 Financial account -389 -1,114 -2,942 91 -260 -511 -434 -874 -737 -816 -515 -730 -158 -193 -167 100 Direct investment 633 166 -555 146 98 84 -162 -62 -673 -16 196 40 123 -92 144 45 Domestic abroad -85 212 -44 41 127 39 5 -110 51 -2 16 -38 36 -6 53 80 Foreign in Slovenia 718 -46 -511 105 -29 45 -167 48 -725 -14 180 78 87 -86 91 -35 Portfolio investment 1,839 -218 3,981 -923 124 -982 1564 131 2,100 -424 2,173 2,962 -324 76 133 -86 Financial derivatives -155 -203 -453 -23 -21 -31 -129 23 -224 -120 -133 -184 -31 -6 -7 -7 Other investment -2,777 -890 -5,910 851 -455 439 -1726 -1,033 -1,920 -174 -2,782 -3,391 27 -171 -435 151 Assets -1,490 -1,474 -1,907 -1466 -95 205 -118 -1,284 -633 141 -131 -1,732 -956 -383 119 169 Commercial credits -49 65 -35 -347 -35 109 339 -364 -50 91 288 -242 -176 24 -32 -27 Loans -55 -319 -20 3 -95 84 -310 25 -178 89 43 65 -147 -153 -28 86 Currency and deposits -1,341 -1,177 -1,699 -1131 11 -33 -24 -928 -332 -46 -393 -1,505 -629 -258 164 105 Other assets -46 -45 -153 10 24 45 -124 -17 -73 7 -69 -51 -4 4 15 5 Liabilities -1,287 584 -4,003 2317 -359 234 -1608 251 -1,287 -315 -2,651 -1,659 983 212 -554 -18 Commercial credits 107 265 -146 161 136 -96 63 -300 93 -200 260 -172 93 -16 -72 224 Loans -1,234 -729 441 -121 -223 -178 -208 374 602 -530 -6 -358 14 103 -213 -114 Deposits -169 1,026 -4,246 2287 -288 530 -1503 188 -1,981 429 -2,883 -1,176 904 115 -278 -126 Other liabilities 9 23 -52 -11 17 -22 39 -12 -2 -15 -23 47 -29 10 9 -2 International reserves2 72 31 -5 39 -6 -21 19 67 -19 -83 30 -157 48 0 -2 -4 Statistical error 328 47 756 -163 -13 220 2 395 94 231 36 261 -23 80 139 -231 EXPORTS AND IMPORTS BY END-USE OF PRODUCTS, in EUR m Export of investment goods 2,042 2,112 2,136 477 569 514 552 517 525 522 572 N/A 175 183 189 196 Intermediate goods 12,008 12,138 12,522 3,063 3,101 3,019 2,955 3,078 3,182 3,139 3,123 N/A 1,110 1,009 1,049 1,042 Consumer goods 6,950 6,811 6,970 1,685 1,734 1,604 1,788 1,673 1,817 1,668 1,811 N/A 657 559 572 603 Import of investment goods 2,505 2,402 2,558 562 584 570 687 645 665 562 686 N/A 228 186 201 197 Intermediate goods 14,107 14,005 13,690 3,636 3,578 3,410 3,382 3,477 3,462 3,297 3,454 N/A 1,294 1,177 1,209 1,192 Consumer goods 5,943 5,671 5,949 1,435 1,400 1,350 1,486 1,394 1,488 1,480 1,587 N/A 533 449 475 475 Source of data: BS, SURS. Note: 1Exports and imports (F.O.B.) include also the adjustment for exports and imports of goods by ITRS and duty-free shops reports. 2Reserve assets of the BS. 2012 2013 2014 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 12 3 59 61 200 196 230 56 64 80 340 298 133 252 251 161 204 168 57 216 106 21 342 48 -73 84 43 98 -117 -50 58 124 135 -21 122 139 16 91 62 -13 -29 86 50 193 1,829 1,606 1,848 1,961 1,926 1,537 1,718 1,737 1,935 1,963 1,844 1,837 1,960 1,554 1,930 2,034 1,911 1,681 1,851 1,817 2,033 1,781 1,679 1,764 1,918 1,828 1,654 1,768 1,680 1,811 1,828 1,866 1,715 1,821 1,538 1,839 1,973 1,924 1,710 1,765 1,766 1,840 147 189 192 183 145 86 170 122 212 173 186 181 199 208 165 151 124 114 117 109 181 512 512 477 467 415 427 391 354 464 433 438 455 532 537 488 456 411 463 386 349 448 366 323 285 284 270 341 221 232 253 259 251 274 333 329 324 306 287 349 269 240 267 -110 -32 -56 -8 -14 -19 -25 -24 -23 -30 -44 -41 -39 -40 -41 -44 -42 -42 -48 -59 -74 54 55 65 58 59 88 75 73 77 69 69 68 75 69 70 70 69 74 66 63 70 164 87 121 66 73 108 100 97 100 99 112 109 113 109 111 114 112 116 114 122 144 -25 -24 -21 -21 1 106 -30 -76 27 21 11 -10 -48 -23 -11 0 -11 172 -49 -79 42 112 85 88 90 109 212 86 95 152 139 115 102 101 91 102 102 88 279 78 86 159 137 109 109 112 108 106 116 171 125 118 104 112 149 114 113 102 98 107 127 166 117 -55 -243 -242 -384 -348 248 -397 -89 -393 -324 -153 -299 -232 -298 -318 -390 -98 13 -94 36 -673 9 -10 -29 -13 -40 3 -1 -5 0 0 -27 -13 4 -12 -23 10 -3 33 1 0 -2 -65 -233 -213 -372 -308 245 -397 -84 -393 -324 -127 -286 -236 -285 -295 -400 -95 -20 -95 36 -671 87 -28 25 -45 31 -149 51 25 -138 -701 -3 31 44 -4 -56 295 -68 -31 8 71 -39 13 43 -16 -6 42 -32 -8 -7 -94 -8 22 38 -4 -2 4 62 -12 -34 -35 4 -7 74 -71 41 -39 -11 -117 60 32 -45 -693 -25 -7 48 -1 -61 233 -56 3 43 68 -33 -644 -152 -187 1,674 -54 -56 -156 17 270 -143 2,589 -346 -129 -90 -204 -24 1,823 374 410 2,740 -188 -9 -3 -19 -44 -40 -44 -34 65 -8 -7 -67 -151 -84 -56 20 -59 -5 -69 9 -72 -121 541 -46 -56 -1,982 -256 512 -281 -201 -551 510 -2,671 241 15 -138 -51 -613 -1,839 -330 -460 -2,587 -343 122 147 -64 -294 -422 597 -337 -374 -574 -218 -404 -11 -3 206 -62 -444 -131 444 -499 -1,155 -78 16 158 -65 -28 37 330 -62 -86 -217 -25 55 -80 -2 182 -90 -55 19 325 -56 -105 -80 40 51 -8 17 -49 -277 4 8 13 -69 -68 -41 11 75 4 -34 -17 94 -12 29 48 36 -77 8 -132 -406 514 -274 -297 -357 -55 -396 120 -11 -59 24 -287 -85 -21 -388 -1,113 -3 30 15 0 -151 -4 31 -5 1 -13 -69 6 -10 -1 8 0 -68 -48 47 -43 34 -42 419 -193 8 -1,688 166 -85 55 172 23 728 -2,267 252 18 -344 11 -169 -1,708 -774 39 -1,432 -266 -8 -144 56 6 18 40 -234 86 -152 -5 35 64 -127 -137 64 76 136 48 -279 95 13 -83 -62 -32 14 -194 -28 34 -151 492 675 -14 -59 -372 43 -201 12 -6 -11 20 -218 -159 527 12 -9 -1,726 358 -136 274 234 -319 68 -2,299 251 524 -250 155 -259 -1,843 -780 224 -1,296 -104 -17 1 -6 18 -17 38 -18 3 2 -10 12 -4 -7 0 -8 3 5 -31 74 -12 -16 -41 -3 23 26 11 -18 22 11 33 17 25 -61 -82 3 -4 1 -6 35 -62 -116 21 -4 182 42 188 118 -304 333 9 53 26 20 47 -20 137 114 223 41 -228 -13 -57 330 172 164 179 193 191 168 156 159 202 181 176 169 200 146 176 195 194 182 166 179 N/A 1,052 935 1,032 1,116 1,062 777 1,008 988 1,082 1,109 1,054 1,019 1,116 924 1,098 1,173 1,073 877 1,089 1,031 N/A 554 460 590 610 628 550 507 554 611 633 576 609 601 448 619 626 603 583 560 569 N/A 217 163 190 219 209 259 196 195 254 218 259 188 203 154 205 221 240 225 182 197 N/A 1,175 1,096 1,140 1,244 1,160 978 1,223 1,110 1,144 1,199 1,201 1,062 1,176 988 1,132 1,243 1,209 1,002 1,127 1,068 N/A 442 447 461 530 508 448 445 467 483 491 490 506 510 440 530 552 519 516 474 522 N/A MONETARY INDICATORS AND INTEREST RATES 2011 2012 2013 2011 2012 12 1 |2|3|4|5|6|7|8|9|10 SELECTED CLAIMS OF OTHER MFI ON DOMESTIC SECTORS, end of the month, in EUR m Claims of the BS on central government 102 221 233 102 111 119 182 169 188 204 227 227 207 226 Central government (S. 1311) 4,299 5,057 6,563 4,299 4,465 4,580 4,801 4,752 4,796 4,811 4,870 4,805 4,874 5,138 Other government (S. 1312, 1313, 1314) 584 610 581 584 588 589 588 591 580 584 589 590 585 583 Households (S. 14, 15) 9,454 9,267 8,917 9,454 9,421 9,391 9,412 9,380 9,380 9,362 9,341 9,346 9,338 9,341 Non-financial corporations (S. 11) 20,876 19,470 14,902 20,876 20,976 20,896 20,933 20,922 20,843 20,693 20,561 20,488 20,398 20,294 Non-monetary financial institutions (S. 123, 124, 125) 2,229 2,135 1,763 2,229 2,210 2,234 2,323 2,320 2,300 2,291 2,247 2,244 2,210 2,204 Monetary financial institutions (S. 121, 122) 5,445 5,194 5,020 5,445 5,111 4,846 5,644 5,527 5,613 5,918 5,248 5,237 5,210 4,930 Claims on domestic sectors, TOTAL In domestic currency 35,692 34,558 29,620 35,692 35,407 35,334 36,103 35,955 35,979 36,202 35,461 35,422 35,316 35,131 In foreign currency 1,536 1,309 1,097 1,536 1,529 1,505 1,492 1,472 1,458 1,439 1,423 1,402 1,372 1,354 Securities, total 5,659 5,862 7,026 5,659 5,837 5,697 6,105 6,066 6,076 6,018 5,972 5,886 5,928 6,004 SELECTED OBLIGATIONS OF OTHER MFI ON DOMESTIC SECTORS, end of the month, in EUR m Deposits in domestic currency, total 28,420 29,582 27,051 28,420 28,359 27,926 30,197 30,165 30,208 30,322 29,703 29,591 29,354 29,460 Overnight 8,245 8,678 8,558 8,245 8,399 8,195 8,177 8,404 8,375 9,151 8,573 8,633 8,523 8,651 With agreed maturity -short-term 7,868 7,056 6,689 7,868 7,688 7,468 7,553 7,362 7,441 7,111 7,134 7,052 6,964 6,980 With agreed maturity -long-term 12,248 13,780 11,569 12,248 12,180 12,171 14,395 14,319 14,309 13,982 13,930 13,851 13,751 13,755 Short-term deposits redeemable at notice 59 68 235 59 92 92 72 80 83 78 66 55 116 74 Deposits in foreign currency, total 579 552 487 579 570 564 577 568 559 583 597 591 579 571 Overnight 386 372 324 386 391 384 384 385 381 397 410 412 397 388 With agreed maturity -short-term 133 123 91 133 117 120 132 124 116 125 125 119 124 126 With agreed maturity -long-term 59 56 72 59 61 59 60 58 61 60 61 59 57 56 Short-term deposits redeemable at notice 1 1 0 1 1 1 1 1 1 1 1 1 1 1 INTEREST RATES OF MONETARY FINANCIAL INSTITUTIONS, % New deposits in domestic currency Households Overnight deposits 0.22 0.20 0.11 0.24 0.24 0.24 0.23 0.22 0.22 0.22 0.19 0.19 0.18 0.17 Time deposits with maturity of up to one year 2.15 2.31 1.86 2.28 2.39 2.35 2.38 2.38 2.37 2.29 2.27 2.23 2.23 2.28 New loans to households in domestic currency Housing loans, 5-10 year fixed interest rate 5.46 5.48 5.40 5.27 5.37 5.40 5.46 5.36 5.45 5.42 5.37 5.41 5.62 5.53 New loans to non-financial corporations in domestic currency Loan over EUR 1 million, 1-5 year fixed interest rate 5.69 5.32 3.86 6.51 3.79 3.00 6.04 5.81 6.27 5.83 3.94 5.06 6.52 6.51 INTEREST RATES OF THE EUROPEAN CENTRAL BANK, % Main refinancing operation^ 1.2^ 0.8^ 0.5^ 1.0^ 1.0^ 1.0^ 1.0^ 1.0^ 1.0^ 1.0^ 0.7^ 0.7^ 0.7^ 0.75 INTERBANK INTEREST RATES EURIBOR 3-month rates 1.39 0.57 0.22 1.43 1.22 1.05 0.86 0.74 0.68 0.66 0.50 0.33 0.25 0.21 6-month rates 1.64 0.83 0.34 1.67 1.50 1.35 1.16 1.04 0.97 0.93 0.78 0.60 0.48 0.41 LIBOR CHF 3-month rates 0.12 0.07 0.02 0.05 0.06 0.08 0.10 0.11 0.11 0.09 0.07 0.05 0.05 0.02 6-month rates 0.18 0.15 - 0.10 0.11 0.14 0.16 0.18 0.19 0.18 0.18 0.16 0.16 0.11 Source of data: BS, BBA - British Bankers' Association. 2012 2013 2014 11 1 12 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 1 10 1 11 1 12 1 1 2 1 3 1 4 224 221 232 233 229 233 233 233 233 232 231 232 233 233 239 239 245 209 5,144 5,057 5,036 5,111 5,048 5,451 5,361 4,999 5,108 5,024 4,995 4,965 4,881 6,563 6,448 6,437 6,476 6,154 580 610 609 613 609 610 600 600 601 601 604 610 570 581 585 585 584 582 9,318 9,267 9,191 9,160 9,159 9,141 9,107 9,099 9,050 9,059 9,052 9,031 8,996 8,917 8,879 8,849 8,853 8,850 20,044 19,470 19,425 19,265 19,152 19,022 18,889 18,832 18,639 18,633 18,501 18,102 17,918 14,902 14,691 14,599 14,543 14,531 2,186 2,135 2,116 2,102 2,028 2,000 1,990 1,999 1,992 1,983 1,978 1,962 1,966 1,763 1,993 1,968 1,962 1,945 5,012 5,194 5,085 5,300 5,389 4,957 5,423 5,255 5,190 5,320 5,311 5,198 4,752 5,020 5,014 5,294 4,818 5,012 34,943 34,558 34,349 34,342 34,336 33,765 34,040 33,902 33,612 33,754 33,705 33,198 32,569 29,620 29,594 29,706 29,154 29,298 1,348 1,309 1,263 1,277 1,264 1,236 1,235 1,223 1,203 1,192 1,177 1,152 1,144 1,097 1,090 1,075 1,046 1,036 5,990 5,862 5,846 5,927 5,780 6,177 6,091 5,657 5,762 5,669 5,554 5,513 5,366 7,026 6,921 6,944 7,028 6,731 30,062 29,582 29,575 29,961 30,070 29,665 30,497 29,943 30,228 30,184 30,194 30,091 29,645 27,051 27,255 27,501 27,034 27,187 8,763 8,678 8,726 9,185 8,997 8,919 8,806 8,923 9,124 9,055 8,812 8,861 8,729 8,558 8,779 9,066 8,979 9,278 7,417 7,056 6,905 6,827 7,140 7,148 7,712 7,626 7,652 7,696 8,260 8,222 8,110 6,689 6,730 6,888 6,893 7,215 13,763 13,780 13,863 13,829 13,775 13,424 13,787 13,189 13,203 13,159 12,843 12,688 12,495 11,569 11,422 11,264 10,852 10,389 119 68 81 120 158 174 192 205 249 274 279 320 311 235 324 283 310 305 576 552 538 554 549 520 548 536 520 541 521 506 511 487 493 488 490 496 399 372 372 383 363 361 354 340 342 362 333 324 334 324 328 324 333 335 119 123 109 114 128 103 103 113 97 95 109 104 98 91 93 93 90 94 57 56 56 56 57 55 91 82 81 84 79 78 79 72 72 71 67 67 1 1 1 1 1 1 0 1 0 0 0 0 0 0 0 0 0 0 0.17 0.17 0.14 0.13 0.13 0.13 0.12 0.11 0.10 0.10 0.10 0.10 0.09 0.09 0.09 0.08 0,08 - 2.28 2.24 2.28 2.18 2.10 2.01 2.01 1.97 1.89 1.78 1.65 1.56 1.48 1.46 1.36 1.22 1,15 - 6.00 5.31 5.46 6.40 5.03 5.49 5.39 5.30 5.34 5.31 5.11 5.49 5.17 5.36 5.38 5.42 5,26 - 5.48 5.57 3.75 3.76 3.70 3.48 5.68 3.03 2.66 3.37 3.73 4.71 4.59 6.58 3.96 4,21 - 0.7^ 0.7^ 0.7^ 0.7^ 0.75 0.7^ 0.5^ 0.5^ 0.5^ 0.5^ 0.5^ 0.5^ 0.2^ 0.2^ 0.2^ 0.2^ 0,2^ 0,25 0.19 0.19 0.20 0.22 0.21 0.21 0.20 0.21 0.22 0.23 0.22 0.23 0.22 0.28 0.29 0.29 0,30 0,33 0.36 0.32 0.34 0.36 0.33 0.32 0.30 0.32 0.34 0.34 0.34 0.34 0.33 0.37 0.40 0.39 0,41 0,43 0.03 0.01 0.02 0.02 0.02 0.02 0.02 0.03 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0,02 0,02 0.12 0.07 0.08 0.08 0.09 0.08 0.08 0.08 0.08 0.08 0.08 0.08 - - - - - PUBLIC FINANCE 2011 2012 2013 2012 2013 2014 2012 qO Q2 1 Q3 1 Q4 Q1 1 Q2 1 Q3 1 Q4 Q1 8 1 9 CONSOLIDATED BALANCE OF PUBLIC FINANCING (GFS-IMF methodology), current prices, EUR m GENERAL GOVERNMENT REVENUES TOTAL REVENUES 14,982.3 14,999.1 14,725.1 3,618.4 3,712.2 3,577.2 4,091.3 3,419.9 3,495.0 3,733.1 4,077.2 3,632.8 1,234.9 1,153.5 Current revenues 14,037.9 14,030.6 13,634.7 3,410.8 3,485.9 3,367.4 3,766.5 3,184.6 3,293.1 3,510.9 3,646.1 3,408.8 1,189.9 1,057.5 Tax revenues 13,209.2 13,118.3 12,647.9 3,172.7 3,314.0 3,170.4 3,461.2 2,946.8 3,107.4 3,188.1 3,405.6 3,147.0 1,107.5 1,003.9 Taxes on income and profit 2,723.5 2,656.6 2,137.4 629.5 723.0 511.1 793.0 577.1 510.9 442.5 606.9 595.6 210.5 209.0 Social security contributions 5,267.6 5,244.1 5,127.2 1,342.5 1,332.8 1,306.4 1,262.4 1,264.9 1,283.4 1,261.3 1,317.6 1,303.9 446.0 428.2 Taxes on payroll and workforce 29.2 25.6 23.4 7.2 6.4 5.8 6.1 5.5 6.1 5.5 6.3 4.8 1.7 1.9 Taxes on property 215.2 233.9 253.5 26.6 64.8 79.4 63.1 24.2 67.8 91.3 70.3 19.2 26.4 26.6 Domestic taxes on goods and services 4,856.2 4,876.1 5,027.3 1,164.0 1,164.5 1,244.1 1,303.4 1,039.2 1,224.7 1,357.0 1,406.4 1,170.9 414.2 333.2 Taxes on international trade & transactions 100.2 82.5 77.5 22.3 21.9 17.9 20.5 19.4 22.9 18.2 17.0 19.1 5.6 6.3 Other taxes 17.2 -0.6 1.5 -19.4 0.5 5.8 12.6 16.5 -8.4 12.4 -19.0 33.5 3.0 -1.4 Non-tax revenues 828.7 912.3 986.8 238.1 171.9 197.0 305.3 237.8 185.7 322.8 240.5 261.8 82.4 53.6 Capital revenues 65.3 62.5 67.0 10.5 10.8 11.7 29.5 10.7 13.1 12.8 30.4 11.6 2.9 4.1 Grants 10.4 9.2 32.3 1.3 1.8 1.6 4.5 12.9 2.7 14.7 2.1 1.2 0.7 0.4 Transferred revenues 53.8 51.7 52.9 0.1 0.5 50.0 1.1 0.5 0.4 50.9 1.1 1.4 0.1 49.8 Receipts from the EU budget 814.9 845.1 938.2 195.6 213.2 146.6 289.7 211.2 185.6 143.8 397.5 209.8 41.3 41.6 GENERAL GOVERNMENT EXPENDITURES TOTAL EXPENDITURES 16,546.3 16,125.7 16,282.7 4,326.5 3,857.4 3,836.0 4,105.7 4,137.4 4,011.6 3,846.2 4,287.6 4,290.4 1,241.2 1,248.1 Current expenditures 6,926.7 6,813.5 6,836.4 1,995.1 1,668.7 1,553.2 1,596.6 1,842.8 1,819.0 1,496.7 1,677.8 1,923.5 507.0 516.2 Wages, salaries and other personnel expenditures 3,882.7 3,727.7 3,617.0 958.3 973.9 910.8 884.7 908.5 936.6 871.2 900.6 920.5 305.0 282.5 Expenditures on goods and services 2,443.4 2,373.0 2,237.4 589.7 599.1 551.1 633.1 559.1 565.9 526.7 585.7 530.7 195.1 157.0 Interest payments 526.7 647.9 840.1 431.8 81.5 79.4 55.3 319.1 295.2 77.8 148.0 451.8 2.2 72.1 Reserves 73.9 64.9 141.9 15.3 14.3 11.8 23.4 56.2 21.3 20.8 43.6 20.5 4.7 4.6 Current transfers 7,818.9 7,687.0 7,671.1 1,957.3 1,878.7 1,903.2 1,947.8 1,948.5 1,893.7 1,922.4 1,906.4 1,984.6 607.4 598.8 Subsidies 496.3 502.7 519.3 177.1 107.8 57.3 160.5 190.5 111.9 77.5 139.4 205.5 20.6 22.0 Current transfers to individuals and households 6,533.5 6,384.2 6,343.0 1,609.2 1,588.7 1,636.6 1,549.7 1,576.7 1,585.9 1,626.0 1,554.3 1,562.2 519.8 505.1 Current transfers to non-profit institutions, other current domestic transfers 737.2 741.0 734.4 158.0 169.6 196.7 216.8 158.1 185.2 185.7 205.5 204.5 62.3 67.0 Current transfers abroad 52.0 59.0 74.4 13.0 12.5 12.6 20.8 23.3 10.7 33.2 7.2 12.3 4.6 4.7 Capital expenditures 1,023.5 915.0 1,030.8 165.3 179.2 223.4 347.2 141.6 146.3 259.7 483.2 188.0 72.4 74.2 Capital transfers 372.1 319.9 319.0 47.0 44.3 74.3 154.3 42.5 52.0 69.3 155.1 31.5 24.5 26.3 Payments to the EU budget 405.1 390.3 425.5 161.8 86.5 82.0 59.9 161.8 100.5 98.0 65.0 162.7 29.9 32.6 SURPLUS / DEFICIT -1,564.1 -1,126.6 -1,557.6 - - - - - - - - - - - Source of data: Bulletin of Government Finance. Note: In line with the changed methodology of the International Monetary Fund of 2001, social security contributions paid by the general government are not consolidated. * Data on revenues for November 2012 include corrections in DURS records for the period January-October 2012, which were due to the rectification of technical errors in the new DURS information system. 2012 2013 2014 10 1 11M 12 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 1 10 1 11 1 12 1 1 2 1 3 1,300.4 1,304.0 1,486.9 1,183.0 1,143.6 1,093.2 1,187.0 1,133.7 1,174.3 1,290.1 1,204.9 1,238.2 1,275.2 1,201.0 1,601.0 1,231.4 1,196.3 1,205.2 1,256.4 1,228.5 1,281.6 1,130.5 1,072.7 981.5 1,107.7 1,060.8 1,124.5 1,225.5 1,159.5 1,125.9 1,210.9 1,144.3 1,290.9 1,198.9 1,139.7 1,070.2 1,188.8 1,161.5 1,111.0 1,076.5 955.1 915.2 1,046.5 997.0 1,063.9 1,061.0 1,063.1 1,064.0 1,142.4 1,067.1 1,196.1 1,135.8 994.4 1,016.8 215.7 311.1 266.3 199.9 194.1 183.1 70.9 163.5 276.6 62.6 188.7 191.2 187.8 190.0 229.1 207.0 199.3 189.3 430.0 360.0 472.3 424.7 418.9 421.4 432.4 426.3 424.7 423.0 419.4 418.9 420.1 427.8 469.7 430.5 445.0 428.5 2.0 1.6 2.5 1.9 1.8 1.8 2.1 2.0 2.0 2.2 1.6 1.6 1.9 2.0 2.5 1.7 1.4 1.6 20.0 30.5 12.7 6.1 9.0 9.0 17.3 30.4 20.1 32.1 29.3 29.8 19.9 35.7 14.8 6.8 6.6 5.9 512.5 444.9 346.1 438.3 319.3 281.6 521.1 375.5 328.1 527.3 408.0 421.6 512.7 408.8 485.0 478.9 329.6 362.4 7.6 7.5 5.4 5.3 6.3 7.9 8.3 7.6 7.0 6.6 6.3 5.3 5.8 6.1 5.1 5.0 7.2 6.9 1.0 5.9 5.7 0.3 5.7 10.5 -5.7 -8.2 5.5 7.2 9.7 -4.5 -5.8 -3.2 -10.0 6.0 5.3 22.2 67.6 67.0 170.7 54.0 117.5 66.2 61.2 63.9 60.6 164.5 96.4 61.9 68.5 77.2 94.7 63.1 145.3 53.4 3.6 5.3 20.6 4.0 3.5 3.1 4.1 4.6 4.4 5.8 2.7 4.4 4.7 5.5 20.2 3.8 4.4 3.4 0.3 1.1 3.1 0.2 12.4 0.3 0.9 0.3 1.4 10.4 0.2 4.0 0.3 0.5 1.2 0.6 0.1 0.6 0.5 0.2 0.3 0.4 0.0 0.1 0.0 0.0 0.3 0.3 0.4 50.2 0.3 0.5 0.4 0.7 0.1 0.6 39.7 68.9 181.1 47.9 55.1 108.2 74.1 67.9 43.6 48.0 42.0 53.8 59.0 50.2 288.3 27.4 52.0 130.4 1,332.7 1,352.4 1,420.6 1,460.9 1,348.6 1,327.9 1,452.2 1,260.2 1,299.3 1,373.0 1,179.8 1,293.4 1,332.4 1,367.6 1,587.6 1,439.9 1,474.7 1,375.8 563.7 530.6 502.2 664.4 568.6 609.9 727.3 519.2 572.5 503.8 460.8 532.1 532.6 565.1 580.1 624.9 672.0 626.6 294.3 314.8 275.6 327.2 269.0 312.4 294.5 280.7 361.5 295.0 290.5 285.7 285.1 295.5 320.0 299.9 345.5 275.1 215.4 209.5 208.3 197.1 155.4 206.6 197.5 194.0 174.3 198.3 161.0 167.4 173.1 183.1 229.6 176.1 183.8 170.8 48.5 2.3 4.5 133.3 101.8 83.9 227.9 38.8 28.5 3.9 1.7 72.2 66.8 78.8 2.3 141.9 135.9 173.9 5.5 4.1 13.8 6.8 42.4 7.0 7.3 5.7 8.3 6.5 7.6 6.8 7.6 7.7 28.2 7.0 6.8 6.7 611.3 662.3 674.2 683.1 639.8 625.7 637.4 633.4 622.9 731.8 582.5 608.2 617.1 628.6 660.7 697.1 652.5 635.0 27.4 68.1 65.0 94.2 60.0 36.3 33.2 44.7 34.1 28.4 21.2 27.9 34.4 48.5 56.4 119.7 65.7 20.2 524.2 511.8 513.6 526.3 521.5 529.0 534.5 525.4 526.0 610.4 503.5 512.1 516.7 513.9 523.8 514.9 524.4 522.9 56.7 70.0 90.1 57.9 41.6 58.5 67.2 57.7 60.3 67.1 53.7 64.8 63.2 63.3 79.0 56.5 57.4 90.7 3.0 12.3 5.5 4.6 16.8 1.9 2.6 5.6 2.5 25.8 4.0 3.4 2.7 2.9 1.6 6.0 5.0 1.3 86.5 95.7 165.0 49.5 50.8 41.4 38.1 50.6 57.5 80.9 83.2 95.5 122.6 125.2 235.4 68.6 59.1 60.4 43.3 41.6 69.4 12.6 11.9 17.9 16.1 23.3 12.7 23.0 21.3 25.1 41.5 29.6 84.0 1.7 9.4 20.4 27.9 22.2 9.8 51.3 77.5 33.0 33.2 33.7 33.6 33.5 32.0 32.5 18.6 19.1 27.3 47.7 81.7 33.3 - - - - - - - - - Acronyms Acronyms in the text AJPES - Agency of the Republic of Slovenia for Public Legal Records and Related Services, BAMC - Bank Asset Management Company, BLI - Better Life Index, BoE - Bank of England, BoJ - Bank of Japan, BS - Bank of Slovenia, CHF - Swiss Franc, , EC - European Comission, ECB - European Central Bank, EFSF - European Financial Stability Facility, EFSM -European Financial Stability Mechanism, EIA - Energy Information Administration, EMU - European Monetary Union, ES - European Council, ESI - Economic Sentiment Indicator, ESM - European Stability Mechanism, ESS - Employment Service of Slovenia, ESSPROS - European System of Integrated Social Protection Statistics, Euribor - Euro Interbank Offered Rate, EUROSTAT - Statistical Office of the European Union, FED - Federal Reserve System, GBP - British pound, GDP - Gross domestic product, HICP-Harmonised Index of Consumer Prices, HUF - Hungarian Forint, ifo - Institut für Wirtschaftsforschung , IMAD - Institute of Macroeconomic Analysis and Development, IMF - International Monetary Fund, JPY - Japanese yen, LFS - Labour Force Survey, Libor - London Interbank Offered Rate, LTRO - Long-term refinancing operation, MF - Ministry of Finance, MZIP - Ministry of Infrastructure and Spatial Planning, NEER - Nominal Effective Exchange Rate, NFI - Non-monetary Financial Institutions, OECD - Organization for Economic Co-operation and Development, OI - core inflation, OP RČV - Operational Programme for Human Resource Development, OP ROPI -Operational Programme of Environmental and Transport Infrastructure Development, OP RR - Operational Programme for Strengthening Regional Development Potentials, PDII - Pension and Disability Insurance Institute, PISA - Programme for International Student Assessment, PMI - Purchasing Managers Index, PRS - the Slovenian Business Register, REER -Real Effective Exchange Rate, RS - Republic of Slovenia, RULC - Relative Unit Labor Cost, SCA - Standard Classification of Activities, SRE - Statistical Register of Employment, SURS - Statistical Office of the Republic of Slovenia, Target - Trans-EuropeanAutomated Real-time Gross settlement Express Transfer system, ULC - Unit Labour Costs, USD - US Dollar, ZEW - Centre for European Economic Research, ZUJF - Fiscal Balance Act, ZZZS - The Health Insurance Institute of Slovenia. Acronyms of Standard Classification of Activities (SCA) A - Agriculture, forestry and fishing, B - Mining and quarrying, C - Manufacturing, 10 - Manufacture of food products, 11 - Manufacture of beverages, 12 - Manufacture of tobacco products, 13 - Manufacture of textiles, 14 - Manufacture of wearing apparel, 15 - Manufacture of leather and related products, 16 - Manufacture of wood and of products of wood and cork, except furniture, manufacture of articles of straw and plaiting materials, 17 - Manufacture of paper and paper products, 18 - Printing and reproduction ofrecorded media, 19- Manufacture of coke and refined petroleum products, 20 - Manufacture of chemicals and chemical products, 21 - Manufacture of basic pharmaceutical products and pharmaceutical preparations, 22 - Manufacture of rubber and plastic products, 23 - Manufacture of other non-metallic mineral products, 24 - Manufacture of basic metals, 25 - Manufacture of fabricated metal products, except machinery and equipment, 26 - Manufacture of computer, electronic and optical products, 27 - Manufacture of electrical equipment, 28 - Manufacture of machinery and equipment n.e.c., 29- Manufacture ofmotor vehicles, trailers and semi-trailers, 30- Manufacture of other transport equipment, 31 - Manufacture of furniture, 32 - Other manufacturing, 33 - Repair and installation of machinery and equipment, D-Electricity, gas, steamand air conditioning supply,E-Water supply sewerage, waste management and remediationactivities, F - Construction, G - Wholesale and retail trade, repair of motor vehicles and motorcycles, H - Transportation and storage, I - Accommodation and food service activities, J - Information and communication, K - Financial and insurance activities, L -Real estate activities, M - Professional, scientific and technical activities, N - Administrative and support service activities, O -Public administration and defence, compulsory social security, P - Education, Q - Human health and social work activities, R - Arts, entertainment and recreation, S - Other service activities, T - Activities of households as employers, undifferentiated goods- and services- producing activities of households for own use, U - Activities of extraterritorial organizations and bodies. Acronyms of Countries AT-Austria, BA-Bosnia and Herzegovina, BE-Belgium, BG-Bulgaria, BY-Belarus, CH-Switzerland, HR-Croatia, CZ-Czech Republic, CY-Cyprus, DE-Germany, DK-Denmark, ES-Spain, EE-Estonia, GR-Greece, FR-France, FI-Finland, HU-Hungary, IE-Ireland, IL-Israel, IT-Italy, JP-Japan, LU-Luxembourg, LT-Lithuania, LV-Latvia, MT-Malta, NL-Netherlands, NO-Norway, PL-Poland, PT-Portugal, RO-Romania, RS-Republic of Serbia, RU-Russia, SE-Sweden, SI-Slovenia, SK-Slovakia, TR-Turkey, UA-Ukraine, UK-United Kingdom, US-United States of America. Slovenian economic mirror May 2014, No. 5, Vol. XX