.^'IMAD O fü Q) £ u E o > o fN O Ü) o u 0) s (V _Q E cu u Slovenian Economic Mirror ISSN 1318-3826 No. 12 / Vol. XVI / 2010 Publisher: IMAD, Ljubljana, Gregorčičeva 27 Director: Boštjan Vasle, MSc Editor in Chief: Jure Brložnik, MA Slovenian Economic Mirror was prepared by: Matevž Hribernik, (International environment); Janez Kušar, Jože Markič, PhD, Tina Nenadič, MSc, Mojca Koprivnikar Šušteršič (Economic developments in Slovenia); Tomaž Kraigher, Mojca Lindič, MSc, Ana T. Selan, MSc (Labour market); Slavica Jurančič, Miha Trošt (Prices); Jože Markič, PhD (Balance of payments); Marjan Hafner (Financial markets); Gonzalo Caprirolo, MSc, Jasna Kondža, Dragica Šuc, MSc (Public finance); Jasna Kondža (Revised state budgets for 2011 and 2012); Dragica Šuc, MSc (Absorption of EU funds from 2004 to 2009) Editorial Board: Lidija Apohal Vučkovič, 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: Circulation: 90 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 activity in Slovenia..........................................................................................................................................9 Labour market..................................................................................................................................................................15 Prices..................................................................................................................................................................................17 Balance of payments.......................................................................................................................................................21 Financial markets.............................................................................................................................................................22 Public finance....................................................................................................................................................................27 Boxes Box 1: Forecast of public finance deficit and debt in EU Member States until 2012.............................................7 Box 2: Measures to stimulate new car purchases in EU countries and production of motor vehicles in Slovenia..............................................................................................................................................................................12 ......................13 ......................24 ......................26 ......................28 Box 3: Real estate market in Slovenia............................................ Box 4: Non-performing assets of the banking sector................ Box 5: Sources of finance in the Slovenian banking system..... Box 6: Financing borrowing requirements in 2010.................... Selected topics..............................................................................................................................................................31 Revised state budgets for 2011 and 2012...................................................................................................................33 Absorption of EU funds from 2004 to 2009................................................................................................................35 Statistical appendix.....................................................................................................................................................39 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 SORS 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 Growth in merchandise exports and industrial production in manufacturing slowed as expected in the autumn months and construction activity continued to decline. Growth in merchandise exports and industrial production in manufacturing eased in the autumn months. The recovery of production and exports of high- and medium-high-technology industries, which tend to be more export-oriented, is faster than the recovery of low-technology industries, which are more dependent on domestic demand. Exports of goods and industrial production in manufacturing were higher than in the same period of2009, yet still significantly below the average of the pre-crisis year2008. Construction activity continues to decline. After plummeting in September, it also fell in October and was 48.5% lower relative to its September 2008 peak. The number of persons in formal employment declined further in October and growth in the number of registered unemployed persons even accelerated in November and December. Employment shrank by 0.3% in October, seasonally adjusted. Broken down by activities, employment dropped most notably in construction, agriculture and hotels and restaurants, while it increased the most in manufacturing, education and other business activities. Growth in the number of registered unemployed persons accelerated in November and December, according to seasonally adjusted data, reaching 110,021 by the end of December, which is 13.8% more than in December 2009. In 2010, consumer price growth was relatively low (1.9%) under the impact of weak economic activity. Core inflation was also relatively low and moderate in 2010. Particularly in the first eight months of 2010, inflation was significantly impacted by tax changes. Higher taxes contributed between 0.7 p.p. and 0.8 p.p. to 1.9% inflation at the end of the year. As a result of higher food prices in the international environment, upward pressures on domestic food prices strengthened somewhat, especially in the last months of 2010. At the level of the euro area as a whole, prices increased by 2.2% in 2010 (HICP). After two years of deterioration, the cost competitiveness of Slovenia's economy improved slightly in the second and third quarters of 2010, but less than in most other countries of the euro area and EU due to relatively high wage growth in the private sector. Cost competitiveness improved in the second and third quarters of 2010 because productivity increased more than the compensation per employee, even though the latter saw relatively high growth due to high wage rises in the private sector. After Slovenia was among the countries with the greatest deterioration in cost competitiveness in 2009, due to a greater fall in productivity, the improvement in 2010 was among the smallest in the EU due to faster wage growth. The relatively worse competitive position of Slovenia's economy in the first nine months of 2010 mainly reflected the pronounced deterioration in the construction sector, where productivity dropped further and the compensation per employee increased due to higher minimum wage. Price competitiveness improved in the first ten months of 2010, but much less than in other euro area countries. Bank lending activity remained modest in November and the decline in the net flow of loans to enterprises and NFIs in the last four months was the largest since the beginning of the crisis. One of the primary reasons for low credit activity was the deterioration of the quality of banks' total assets, because of which banks created additional impairments and provisions in 2010. In the first eleven months of 2010, banks created additional impairments and provisions in the amount of EUR 600 m, which is nearly two thirds more than in the same period of the previous year. Non-performing claims increased by more than a third in that period, to nearly EUR 1.5 bn, and their share climbed to 3%. Limited sources of finance are another reason why lending activity remains low. While the government represented a significant source of bank assets in 2009, it mainly withdrew its deposits in the first eleven months of 2010, so that banks had to seek other sources of finance to discharge matured liabilities. With weak growth in household deposits and outflows of government deposits, banks will remain highly dependent on foreign sources, which may prove problematic given the relatively low tier 1 capital ratio, particularly as the capital adequacy of banks is set to decline further with the rapid acceleration of the quality of banks assets. The revised state budget for 2011 and the state budget for 2012 anticipate a slower consolidation of public finances than planned in the Stability Programme. In the Stability Programme the government undertook to cut the general government deficit to 1.6% of GDP, implementing the fiscal consolidation particularly on the expenditure side. The government also set a ceiling for state budget expenditures when preparing the current state budgets, but the deficit is still high compared to the available budgetary sources. The adopted revisions of the state budget for 2011 and the state budget for 2012 will therefore not suffice to meet the Stability Programme objectives. According to the supplementary budget, the state budget deficit even increased somewhat in 2010 relative to 2009. According to the revised budget, it is only set to decline by EUR 79 m in 2011 with regard to the supplementary budget for2010, and by a further EUR 265 in 2012. The reduction in both years combined is smaller than it should be in one year alone according to the Stability Programme consolidation plans. ■ö £ Q) E o £ O u Q) £ Q) 3 U International environment In their latest forecasts, the ECB and EC expect a slow recovery of the European economy in the next two years. In its forecast released in December, the ECB estimates that economic growth was in a range of 1.6% to 1.8% in the euro area in 2010 and predicts 0.7%-2.1% growth for 2011 and 0.6%-2.8% growth for 2012. According to the ECB, exports will still play a crucial role in the recovery in 2011, but domestic demand is also expected to increase gradually. The forecast by the ECB is thus fairly similar to the autumn forecast by the EC. Both of them expect lower economic growth for 2011 compared with 2010, mainly as a result of lower growth of the global economy and the expected fiscal consolidation in most euro area countries. The EC revised downwards its forecast for 2011 relative to the spring forecast for all demand components except investments. Given the tight labour market conditions, private consumption is set to increase by a mere 0.9% in 2011 and is not expected to become a major factor of economic recovery before 2012. Labour market conditions will also remain tight in 2011, largely due to further structural adjustments in a number of sectors, fiscal consolidation and a consequent decline in public sector employment. Investments are expected to rise by 2.2%, most notably investment in machinery and equipment, while growth will continue to be negatively impacted by corporate deleveraging. The forecast for government consumption is also lower than in the spring. Government consumption is expected to decrease by 0.1% next year, chiefly as a consequence of the announced fiscal consolidation. Global trade volume increased by 16.7% y-o-y in the first ten months of 2010, but its growth has slowed in recent months. Slower growth in global trade will impact euro area exports, which are forecast to increase by 6.1% in 2011, after enjoying strong growth in 2010 (10.7%). Box 1: Forecast of public finance deficit and debt in EU Member States until 2012 After a significant deterioration in 2009 and, in certain EU countries, also in 2010, the EC expects public finances to improve slightly in 2011 and 2012. According to EC estimates, more than half of EU countries recorded higher public finance deficits in 2010 compared with 2009, with Ireland standing out in particular. Fiscal incentives in the form of anti-crisis measures mainly expired in 2010 (amounting to approximately 1% of GDP, on average), and the year 2011 will be marked by saving, which may, particularly in the short term, unfavourably impact demand and hence economic growth. Most of the countries have adopted fiscal consolidation programmes in recent months, which is reflected in improved expectations for the public finance deficit in the EU as a whole. The deficit is projected to narrow by more than 1.5 p.p. in 2011 relative to 2010, to 5.1% of GDP (EMU: 4.6% of GDP), and to 4.2% of GDP in 2012 (EMU: 3.9% of GDP). This will, however, still be a more than 2 p.p. higher figure than in 2008. In the same period, general government debt widened by more than 17 p.p. in the EU as a whole, to nearly 80% of GDP. It is expected to increase further until 2012, to 83.3% of GDP, according to estimations, and will exceed the ceiling of 60% of GDP in more than half of EU countries. The EC and OECD emphasise that a credible fiscal consolidation supported by structural reforms is the main driver of economic growth and a key to maintaining a sustainable level of debt. Additional pressure on debt growth is associated with financial implications of population ageing, which jeopardise the long-term sustainability of public finances in most countries of the EU. The structural reforms in countries with great public finance problems will, however, have to be even deeper and more painful. Figure 1: General government balance in EU countries Figure 2: Public debt in EU countries -10 Deficit increase between 2009 and 2010 Deficit reduction between 2009 and 2010 3% GDP 120 100 ; 80 20 0 -20 ■ 2009 «Debt growth until 2012 ■f-f- i-4.....f-f-i f- '■■■■f..........M.....M-+-—..... 60% GDP III Source: EC Autumn Forecast. Source: EC Autumn Forecast. 2 0 -2 o -8 60 40 -12 -14 Figure 3: Forecast of economic growth in main trading partners —♦—EMU -Germany ---------France ---Italy -Austria 104 r 103 O o 102 101 (U -Ö 100 sz "0 99 98 97 96 95 94 -i ........4.......4........f.......f •1 ■ 1111 1 1 1 \ \ .........4......^^..if y^ >-"! K/r ..' i // i H TO'----- "-■1.......\ ^^^^ ■1........ši^ Source: EC Autumn Forecast; calculations by IMAD. The available data on short-term indicators for October confirm the expectations about a further gradual economic recovery in the euro area. According to seasonally adjusted data, the volume of industrial production in manufacturing and turnover in retail trade in the euro area increased slightly in October. The value of construction put in place also increased somewhat after several months of decline, but all three indicators still post lower values than they did in 2008 as a whole. The unemployment rate in the euro area rose marginally in October, to 10.1%, which is 2.3 p.p. more than at the beginning of the crisis in October 2008. The economic sentiment indicator (ESI) continued to improve in the euro area in December. Figure 4: Short-term indicators of economic activity in the euro area -Industrial production in manufacturing -New orders in manufacturing ---------Value of construction put in place ---------Total turnover in retail trade ■— Economic sentiment in EU 110 105 100 90 ^ 85 •Ii 80 75 !5 70 m ■i - 1 f............. — / .......1 .......'........................................................'............. The situation on financial markets also remained tight in December. Yield spreads between the 10-year government bonds of certain euro area countries (Greece, Ireland, Portugal and Spain) and Germany declined, but remained high. Ireland, which had applied for EU assistance in solving fiscal problems in November, was granted EUR 85 bn under the European Financial Stability Facility (EFSF) in December. Continuing to buy government bonds, the ECB also tried to improve financial market conditions, but the credit ratings of the most exposed countries in the euro area (Ireland, Portugal) nevertheless deteriorated significantly in December. Interbank interest rates did not change much in December. The value of the three-month EURIBOR averaged 1.023%, 34 basis points more than in January. The value of the three-month LIBOR remained approximately the same as in November. The key interest rates of main central banks also remained unchanged in December, as they had in all other months of 2010. The euro depreciated against the main world currencies in December and in 2010 as a whole. The average exchange rate of the dollar against the euro strengthened by 3.3% in December, reaching USD 1.3220 to EUR 1. The Swiss franc also gained value against the euro (4.7%, to CHF 1.2811 to EUR 1), as did the Japanese yen (2.3%, to JPY 110.11 to EUR 1) and the British pound sterling (0.8%, to GBP 0.8481 to EUR 1). In 2010, the exchange rate of the US dollar against the euro totalled USD 1.3257 to EUR 1, meaning that the dollar appreciated by 5.0% against the euro in 2010. The Japanese yen and the Swiss franc appreciated the most against the euro in 2010 (by 10.8% and 8.6%, respectively). The price of Brent crude oil surged in December, exceeding an average of USD 90 a barrel for the first time since September 2008. The average price of Brent crude oil rose by 7.1% Figure 5: Prices of Brent crude oil and the USD/EUR exchange rate -Price in USD (left axis) ---------Price in EUR (left axis) -Exchange rate of USD to EUR (right axis) ŽS ŽS ŽS 1 So u rce: Eurostat; calculations by IMAD. a to USD 91.3 a barrel (in EUR, by 10.3%, to EUR 69.6 a barrel). According to analysts, this increase has to do with higher oil demand by China and an early and cold winter in North America and Europe. The average price of Brent crude totalled USD 79.6 a barrel in 2010, which is a 28.7% higher figure than in 2009, and EUR 60.6 a barrel, which is an increase of 35.9%. Despite the significant increase, the average oil price fluctuations in 2010 were lower than in 2009. Economic activity in Slovenia The growth of short-term indicators of economic activity slowed in autumn months as expected, whereas the continuing decline in construction activity exceeds expectations. After being substantial in the first half of the year, growth in merchandise exports (in nominal terms) and growth in industrial production (in real terms), which mainly rely on foreign demand, slowed in autumn months, seasonally adjusted. In the first eleven months of 2010, they were 14.5% and 6.5% higher y-o-y, respectively, though still below the average of the pre-crisis year 2008. Turnover in retail trade, which had been fairly volatile in the first half of the year, was somewhat above the 2009 level after September's and October's growth. After growing relatively strongly in the first half of the year and declining in the summer, turnover in wholesale trade remained at the previous month's level in October, while accommodation and food service activities still enjoyed turnover growth that had started in late 2009. The value of construction put in place is still dropping. After plummeting in September, it also fell in October, being 16.4% lower y-o-y in the first ten months of 2010. Figure 6: Values of short-term indicators of economic activity - Merchandise exports (nom.) - Industrial production in manufacturing -Value of construction put in place -Turnover in trade -Turnover in wholesale (nom.) ---------Turnover in hotels and restaurants (nom.) ■jš 65 55 5= 1= C3 s C3 s S Q Merchandise exports1 increased in November, after two months of stagnation. Seasonally adjusted, merchandise exports rose by 1.5% in November. Data on exports indicate slower growth in the second half of 2010 compared with the first six months, which is expected in view of the forecast that global economic growth will slow in the second half of the year. The y-o-y growth rate of exports had remained high in the third quarter and similar to that in the second, but it declined in September and October. In the third quarter, exports increased 17.4% y-o-y , even slightly more than in the second (15.9%), due to higher growth in exports to non-EU markets (a rise from 7.5% to 13.3%). Y-o-y Figure 7: Exports of goods to main trading partners in the EU Q1 09 fifQ2 09 Q3 09 » 04 09 Q1 10 »02 10 «03 10 50 40 30 20 10 0 -20 -30 -40 -50 -60 Germany Italy France Austria Source: SORS; calculations by IMAD. Figure 8: Exports of goods to main trading partners outside the EU Q1 09 i5Q2 09 Q3 09 »04 09 Q1 10 «02 10 «03 10 50 40 30 20 i^t 10 CD c^ 0 >^-10 -20 -30 -40 -50 -60 Croatia Serbia Russia US Source: SORS; calculations by IMAD. 1 According to the external trade statistics. growth in exports to the EU remained high (a drop from 19.6% to 19.3%). Broken down by Slovenia's main trading partners in the EU, in the third quarter, only exports to Germany enjoyed higher y-o-y growth than in the second. Growth in exports to Italy maintained a similar level. Exports to Austria recorded lower growth, as did, even more so, exports to France, due to the base effect. Y-o-y growth in exports to Germany increased by quarters, but was nevertheless the lowest compared with what was recorded for the other three main partners in the EU in the first nine months. Among exports to Slovenia's main trading partners outside the EU, the third quarter saw much higher y-o-y growth in exports to the Russian Federation (36.8%) than the second, partly as a consequence of a low base. Growth in exports to the US remained high (36.8%). Slovenia also increased its exports to the former Yugoslavia, also to Croatia after a decline of more than one year. Export growth relies on high-technology industries. Broken down by activities, among highly export-oriented industries, the manufacture of metals and the manufacture of pharmaceutical raw materials and preparations increased once again their contributions to y-o-y export growth in the third quarter of 2010. Growth in exports of motor vehicles, trailers and semi-trailers, which had been highest in the first quarter of 2010, declined substantially in the second and in the third, which is related to the expiry of incentives for motor vehicle purchases in certain main trading partners (see Box 1). Among moderately export-oriented industries, in the third quarter as well as throughout the year, the greatest contribution to total y-o-y growth in exports came from chemicals and chemical products, even though this contribution declined somewhat in the third quarter. Among moderately export-oriented industries, exports of the manufacture of wood products rose y-o-y in the third quarter for the first time since the beginning Figure 9: Merchandise exports according to technological intensity High-and medium-high -technology-intensive industries Medium-low-technology-intensive industries Low-technology-intensive industries of the crisis. Exports of low-technology goods remained at the 2009 level in the first nine months. Merchandise imports2 remained at the previous month's level in November, after several months of growth. Seasonally adjusted, merchandise imports increased once again in October (1.6%) and maintained that level in November. Unlike exports, which saw lower g rowth in the second half of 2010 than in the first, imports stagnated in the middle of the year, while recording similar growth in the first and last months of the year. In the third quarter of 2010, y-o-y growth in imports was lower than in the second. Imports increased 14.4% y-o-y in the third quarter (19.3% in the second), mainly due to lower y-o-y growth in imports of goods for intermediate consumption, which reflects lower energy price rises on the global market and a more modest increase in production volume in manufacturing. Higher imports of intermediate goods made the greatest contribution to the total growth of imports in the first nine months. In the first ten months of 2010, imports of investment goods remained below the level recorded in the same period of 2009, which indicates weak investment activity. Among main consumer goods, only gasoline recorded significantly higher imports than in 2009, while imports of personal cars were significantly below the 2009 level. Exports of services declined in October, according to seasonally adjusted data. After growing for several months, exports of services thus declined for the third month in a row (1.6%, seasonally adjusted). They were at the same level as in October 2009. In the first ten months they increased by 4.7% y-o-y. Exports of transport services were 6.5% higher y-o-y in the first ten months and recorded the highest growth within services exports. Exports of road and railway transport services exceeded their 2009 levels also in October and recorded the highest y-o-y growth in exports of transport services in the first ten months. Exports of air transport services remained below the 2009 level. Exports of travel services increased 3.6% y-o-y in October, and 5.7% in the first ten months. After September's growth, exports of the group of other services declined y-o-y in October, with revenues from construction and assembly services and investment works performed by Slovenian companies abroad continuing to plunge. In the first ten months, exports of the group of other services increased 2.2% y-o-y. After increasing in September, imports of services declined in October (3.1%, seasonally adjusted). Data for the last few months indicate a standstill of growth. Imports increased by 3.0% compared with October 2009 and by 4.5% in the first ten months. Similar to exports, imports of transport services exceeded the 2009 level the most and were 10.2% higher y-o-y in the first ten months. In addition to further y-o-y growth in imports of road transport services, October saw significantly higher imports of maritime transport services y-o-y. Imports of travel services Source: SORS; calculations by IMAD. 2 According to the external trade statistics. Figure 10: Trade in services -Exports of services -Imports of services Source: BS; calculations by IMAD. increased by a mere 1.8% y-o-y in the first ten months. After growing in the previous months, imports of the group of other services dropped y-o-y in October, mainly due to lower imports of construction services. Imports of the group of other services increased 3.9% y-o-y in the first ten months. After the volume of production in manufacturing increased strongly in August, its growth came to a halt during the autumn months. After contracting in September, production remained similar in October, seasonally adjusted, and was 8.5% higher y-o-y (working-day adjusted). In the group of low-technology industries, production remained at a similar level y-o-y. In medium-low-, medium-high- and high-technology industries, it increased once again y-o-y in October. The manufacture of transport equipment recorded the most modest growth, Table 1: Selected monthly indicators of economic activity in Slovenia in % 2009 X 10/ IX 10 X 10/ X 09 I-X 10/ I-X 09 Exports1 -18.4 -5.8 8.1 11.2 -goods -19.4 -4.1 10.1 13.0 -services -14.7 -12.5 0.0 4.7 Imports1 -23.6 -0.6 13.0 12.0 -goods -25.7 1.3 14.6 13.4 -services -10.2 -12.0 3.0 4.5 Industrial production -17.4 -0.72 8.43 6.23 -manufacturing -18.7 -0.52 8.53 6.63 Construction -value of construction put in place -21.0 -1.32 -17.63 -17.33 Real turnover in retail trade -10.5 1.42 2.83 -0.43 Nominal turnover in hotels and restaurants -7.8 1.82 6.43 2.33 as expected (see Box 1). In low-technology industries, production is not picking up and their weak recovery is, according to our estimation, related to their predominant orientation towards the domestic market. The more export-oriented medium-low-, medium-high- and high-technology manufacturing industries came closer to the production volume of the pre-crisis year 2008, given that the 2010 recovery was propelled by foreign demand. In the first ten months of 2010, turnover on the foreign market increased by one tenth y-o-y, while turnover on the domestic market still lagged behind that in the same period of 2009. In the first ten months, new orders in industry also recorded much higher y-o-y growth on the foreign (17.1%) than on the domestic market (4.1%). Figure 11: Production in manufacturing according to technology intensity 20 15 10 5 0 J^' -5 ^-10 -15 >- -20 -25 HIgh-and medium-high -technology-Intensive Industries Medium-low-technology-intensive industries Low-technology-intensive industries Source: SORS; calculations by IMAD. Figure 12: Turnover and new orders Sources: BS, SORS; calculations by IMAD. Notes: 1balance of payments s ^seasonally adjusted, 3working-day adjusted data. Non-domestic Domestic Non-domestic Domestic new turnover turnover new orders orders Box2: Measures to stimulate new car purchases in EU countries and production of motor vehicles in Slovenia Measures adopted by some EU countries in early 2009 to support the car industry were reflected in the recovery of Slovenia's production of motor vehicles, trailers and semi-trailers.1 After a significant y-o-y decline in the last quarter of 2008 (by 32.0%), the production of motor vehicles, trailers and semi-trailers recovered at a faster pace than that of most other high-technology industries. This was a result of measures introduced by certain EU countries in 2009 to boost the purchase of new passenger and light commercial vehicles, which mainly encouraged the sale of small and environmentally friendly vehicles.2 The volume of motor vehicle production was otherwise still 5% lower y-o-y in 2009, but production volume in other high-technology industries was on average more than a tenth lower. At the end of the first ten months of this year, the manufacture of motor vehicles recorded 15.8% higher production than in the same period of 2009, and was, besides the manufacture of electrical appliances, the only industry to exceed the production level of 2008. Amid weaker foreign demand (particularly from the euro area) in the second half of 2010, the manufacture of motor vehicles and exports of road vehicles declined significantly.3 Modest growth is a result of weaker demand due to the phase-out of measures in most countries. In Germany and Austria, the measures expired by the end of 2009. Italy extended them to new vehicles registered up to and including March 2010, while France decided for a gradual withdrawal (up to the end of 2010).4 The measures contributed to a y-o-y increase in Slovenia's road vehicle exports to Germany and France in 2009. Road vehicle exports to Italy and Austria were lower y-o-y in 2009. After increasing strongly in the last quarter of 2009 (due to strong demand before the expiry of measures and a low base) and in the first quarter of 2010 (largely due to demand from Italy and France), y-o-y growth rates in the production of motor vehicles and road vehicle exports started to slow. In the period from July to October, the manufacture of motor vehicles was 3.9% higher y-o-y, on average. In the third quarter, road vehicle exports to the euro area were at the level of the same period in 2009. Looking at Slovenia's main trading partners, exports to France increased y-o-y.5 Figure 13: Manufacture of motor vehicles and exports of road vehicles to the euro area -Manufacture of motor vehicles -Exports of road vehicles to the euro area 80 40 -20 -60 ^^ ij ^^ is Source: SORS; calculations by IMAD. Figure 14: Road vehicle exports Italy (left axis) ^^m France (left axis) - EU (right axis) ■ Germany (left axis) ■ Austria (left axis) 40 a a Source: SORS; calculations by IMAD. 1 In addition to the manufacture of motor vehicles, trailers and semi-trailers, the car industry also comprises other manufacturing industries (e.g. from the textile, leather, metal, chemical, rubber industries, the manufacture of ICT and electrical equipment) and is related to certain services (e.g. trade and transport services). Measures to boost new car purchases thus also helped indirectly to mitigate the impact of the crisis in certain other sectors. 2 In 2009, financial assistance for new car purchases was introduced by France, Italy, the Netherlands, Portugal, Romania, Spain, Luxembourg, Cyprus, the United Kingdom (all of which also extended it to part of 2010), and Austria, Germany, Slovakia and Greece. The assistance was conditional on CO2 emissions. (ACEA, 2010). 3 According to the companies' annual accounts, in 2009, the manufacture of motor vehicles, trailers and semi-trailers generated 86.9% of turnover on foreign markets, 94.6% of which in the EU. More than half of this activity's revenues from sales on foreign markets were generated by the manufacture of motor vehicles (one third of value added in the activity) and around one third by the manufacture of parts and equipment for motor vehicles (half of value added in the activity). Since 2007, 70% of total road vehicle exports (motor vehicles, trailers, semi-trailers and equipment for motor vehicles), on average, have gone to the EU market (one third of total exports to France, one fifth to Germany and one tenth to each, Italy and Austria). 4 In 2009, the subsidy totalled EUR 1,000 in France; EUR 700 in the first half of the year and EUR 500 in the second. 5 Data by SICT are available through September. 60 20 0 Data on business trends in manufacturing show that business optimism regarding the expected future exports and total demand declined slightly at the end of the year. Lower expectations regarding demand contributed to poorer prospects for production in the next three months. Even though production volume is expected to strengthen, most of the surveyed enterprises expect further cuts in the number of employees. The first ten months of 2010, employment dropped most notably in the group of low-technology industries (-10.3%). The average decline in manufacturing industries was 6.2% (9.7% in the same period last year). After a significant decline in September, construction activity also dropped in October. According to seasonally adjusted data, the value of construction put in place declined by 1.3% in October and reached the lowest value since the beginning of the crisis. Construction activity practically dropped by half (a decline of 48.5%) from its peak recorded in September 2008 (SORS). The decline was greatest in residential construction3 (65.3%, peak value in October 2008), somewhat lower in civil engineering (51.1%, peak value in September 2008), and lowest in nonresidential construction (40.7%, peak value January 2008). Residential construction has otherwise declined the most in recent years. After increasing at the beginning of the year, non-residential construction activity is abating as well. It was civil engineering that recorded relatively the most stable activity in 2010, though it also saw a decline in the last two months. October thus recorded the lowest activity this year. The considerable increase in the value of new contracts in construction recorded at the beginning of 2010 did not Figure 15: Values of construction put in place and new contracts -Value of construction put In place -Value of new contracts Source: SORS; calculations by IMAD. Box 3: Real estate market in Slovenia According to data by the Surveying and Mapping Authority of the RS (SMARS), the number of reported market transactions declined notably in the third quarter of 2010, but the prices of both second-hand and new flats remained relatively stable. It is still premature to conclude that the decline in market transactions according to SMARS, which pertain almost exclusively to second-hand flats, indicates a new deepening of the real-estate crisis, as it may be attributable to the time lag in reporting data. A decline, even if somewhat smaller, was otherwise also recorded for transactions in houses and commercial real estate. A decline of over 25% interrupted the relatively steady level of transactions hovering in the middle between the bottom of the crisis and the pre-crisis peak for three quarters in a row. Transactions in new flats according to data by SORS, however, increased by 20% in comparison with those in the previous quarter. Prices of both pre-owned and new flats are fairly stable and persist at the pre-crisis level, only that house price indices are somewhat lower than indices for other real estate categories. The crisis has not yet translated into adjustments, which would lead to a decline in the stock of unsold flats. Figure 16: Movements of prices of second-hand and new flats and transactions in flats -PrIces-SORS, second-hand dwellings ---------Prices-SORS, new dwellings -PrIces-SMARS ---Transactions-SORS, new dwellings d transactlons-SMARS 3 In interpreting the figure on the value of residential construction put in place, it should be noted that it does not include smaller enterprises, which are mainly engaged in construction of residential buildings, by our estimates. a a a Source: SORS, SMARS; calculations by IMAD. translate into higher construction activity. The value of new contracts strengthened significantly in the first quarter of the year and was almost one quarter above the 2009 average. Construction activity nevertheless continues to drop and has not even become stagnant let alone pick up, which could be explained by the fact that if, in evaluating construction put in place, companies report revenue received, the gap may be due to non-payment to subcontractors. Data on non-payment to sub-contractors are, unfortunately, not available and the lack of payment discipline is only indicated by AJPES data on outstanding matured liabilities according to writs of execution and tax debt, which show that the amount of outstanding matured liabilities is highest (and continues to increase) in the construction sector. October saw further turnover growth in the sale of motor vehicles and retail trade, while wholesale trade remained similar to that in the previous month (seasonally adjusted). In October, further growth was reported in the sale and repair of motor vehicles, with turnover increasing since mid-2009. After a relatively strong increase in the first half of 2010 and a decline in the summer months, nominal turnover in wholesale trade remained at the previous month's level in October. After growing in previous months, turnover in retail trade rose just above the level recorded since mid-2009. Looking at turnover in retail trade, there were no major changes in the sale of food products, beverages and tobacco products, which had remained close to the 2005 average since mid-2009. Turnover in the sale of automotive fuels is more volatile. It started to increase at the end of 2009 with renewed growth in the volume of road freight transport. In the third quarter of 2010 it had declined, but increased once again in October. Turnover in the sale of non-food products has persisted at the lowest level thus far for more than a year, but with very different dynamics by activities. Turnover in stores selling furniture, household appliances and construction material, which had peaked in February 2008, had thus declined steeply until the end of 2009, stabilised at an otherwise fairly low level in the first half of 2010 and declined further in recent months. Turnover in stores selling computer and telecommunication equipment increased gradually in 2010, particularly from the spring onwards. Turnover in medicinal and cosmetic products and turnover in stores selling clothing and footwear, on the other hand, did not even decline in the time of the greatest crisis. Figure 17: Turnover in trade sectors - Retail trade • Automotive fuel • Wholesale, retail trade and repair of motor vehicles & motorcycle -Wholesale l^' 80 a t75 70 «Till : '' JJ^ : * 1 - : T ? : : iy TT f -f- f 4- ^^ Jp ^^ Ji Nominal turnover growth in accommodation and food services activities, having started at the end of 2009, continued in August. After declining since the end of 2008 and in 2009, turnover in accommodation and food service activities increased in 2010, though it still lags behind that in the pre-crisis year 2008. Its growth (1.8%, seasonally adjusted) was related to a higher number of foreign tourists visiting Slovenia, according to our estimate. The number of their overnight stays was 7.0% higher y-o-y in October and turnover in accommodation and food service activities increased by 7.2% in nominal terms. Short-term indicators at the end of the year show even lower private consumption than in the same period of the previous year, which is most noticeable in new car registrations by natural persons, which were once again significantly lower y-o-y in December, by nearly one quarter. Consumer confidence data show that households are still postponing major purchases, as the indicator of the right time for people to make major purchases (climate for major purchases) dropped by as much as 14 points. This reflects unfavourable news of increased unemployment and new bankruptcies, with the wage bill remaining at its 2009 level in real terms. Figure 18: Household consumption indicators I Turnover in retail trade (left axis) I No. of first car registrations by natural persons (left axis) - Net wage bill (left axis) • Consumer confdence indicator, original value (right axis) 20 20 10 0 -10 -20 -30 -40 -50 ii I ii JS Source: SORS, MI-IAAD. The sentiment indicator remained unchanged in December, seasonally adjusted. The consumer confidence indicator and the confidence indicator in construction declined slightly, while the confidence indicators in manufacturing, retail trade and services increased marginally. The value of the sentiment indicator improved visibly between March and July, but declined once again between August and October and remained unchanged in the last three months of the year. At the end of the year it was thus only slightly higher than in December 2009. Figure 19: Business trends -Economic sentiment -Retail trade -Service act. 30 20 IS 10 13 0 ro -10 o -20 -30 (D -40 -50 Manufacturing Consumers Construction Table2: Labour market indicators Source: SORS. Labour market The number of persons in formal employment continued to decline in October. It dropped by 687 persons from September and was 14,897 persons lower y-o-y (-1.8%). Seasonally adjusted, employment has declined almost without interruption since November 2008, by a further 0.3% in October 2010. Broken down by activity, the greatest declines relative to September were recorded in construction, agriculture4 and hotels and restaurants, and the greatest increases in manufacturing, education and other business activities. Vacancies and new hires also declined in November, for seasonal reasons, most notably in distributive trades and in manufacturing, professional, scientific and technical activities. Figure 20: Persons in formal employment by activity iAug.10 / Jul.10 iSep.10 / Aug.10 I0ct.10 / Sep.10 in % 2009/ 2008 X 10/ IX 10 X 10/ X 09 I-X 10/ I-X 09 Labour force 0.2 0.4 -0.7 -0.9 Persons in formal employment -2.4 -0.1 -1.8 -2.7 - Employed in enterprises and organisations and by those self-employed -2.8 -0.1 -1.5 -2.7 Registered unemployed 36.6 4.9 8.6 17.5 Average nominal gross wage 3.4 0.2 2.7 3.9 - private sector 1.8 0.1 3.4 5.2 - public sector 6.5 0.3 0.5 0.0 2009 X 09 IX 10 X 10 Rate of registered unemployment, in % 9,1 10,0 10,5 10,9 Average nominal gross wage (in EUR) 1,438.96 1,448.13 1,485.58 1,487.86 Private sector (in EUR) 1,338.77 1,351.77 1,396.49 1,397.67 Public sector (in EUR) 1,749.82 1,741.05 1,745.49 1,750.61 Sources: ESS, SORS; calculations by IMAD. Figure 21: Seasonally adjusted growth in formal employment and registered unemployed persons 9 8 # 7 j^h 6 5 J^ 4 n o E 3 1Ž TD ^ ° -1 -2 -3 Source: SORS; calculations by IMAD. 4 The number of employed persons in agriculture also declined due to the new estimate of the number of farmers based on the latest labour force survey. ^^ ^^ ij ^^ ^^ Source: Sors, ESS; calculations by IMAD. Growth in the number of registered unemployed persons accelerated in November and December. At the end of November, it amounted to 103,831. It rose by 1,148 relative to October (2.2%, seasonally adjusted) and was 8,385 higher y-o-y (8.8%). Altogether 10,329 persons registered as unemployed, 3,742 fewer than in the previous month. The number of first-time job-seekers declined for seasonal reasons (-4,903). There was a significant increase in the number of people who lost jobs (8,229), mainly because of bankruptcies (1,114 persons) and for business reasons, i.e., compulsory settlements (1,971 persons). The outflow from the unemployment register amounted to 9,181 persons, which is slightly less than in October. Overall 4,927 persons landed work, while among the outflows from unemployment for reasons other than employment, outflows due to retirement 0 Table 3: Persons in employment by activity Number in '000 Change in number 2009 X 09 IX 10 X10 2009/ 2008 X 10/ IX 10 X 10/ X 09 A Agriculture, forestry and fishing 37.9 37.9 34.0 33.3 -1,802 -666 -4,620 B Mining and quarrying 3.3 3.3 3.0 3.0 -269 -8 -277 C Manufacturing 199.8 192.5 188.1 188.4 -22,539 296 -4,025 D Electricity, gas, steam and air conditioning supply 7.9 8.0 8.0 8.0 226 11 -6 E Water supply sewerage, waste management and remediation activities 9.0 9.1 9.3 9.3 200 11 195 F Constrution 86.8 86.0 78.2 77.1 -1,169 -1,094 -8,854 G Wholesale and retail trade, repair of motor vehicles and motorcycles 114.6 113.7 111.3 111.2 -1,161 -95 -2,556 H Transportation and storage 49.8 49.2 47.8 47.7 -1,417 -29 -1,464 I Accommodation and food service activities 34.0 34.0 33.1 32.9 210 -278 -1,114 J Information and communication 22.5 22.5 22.6 22.8 609 186 323 K Financial and insurance activities 24.5 24.2 24.5 24.5 236 5 257 L Real estate activities 4.4 4.4 4.4 4.4 195 -2 -2 M Professional, scientific and technical activities 44.8 45.7 47.4 47.6 1,960 222 1,992 N Administrative and support service activities 25.6 25.8 26.7 27.0 -444 282 1,208 O Public administration and defence, compulsory social security 51.5 51.6 52.1 52.0 555 -36 399 P Education 61.7 62.4 64.1 64.4 1,679 285 1,924 Q Human health and social work activities 52.1 52.1 53.4 53.6 1,087 177 1,447 R Arts, entertainment and recreation 14.1 14.1 14.2 14.2 249 13 102 S Other service activities 13.3 13.4 13.5 13.6 474 42 170 T Activities of households as employers, undiferentiated goods - and services -producing activities of households for own use 0.5 0.6 0.6 0.6 35 -9 4 Source: SORS; calculations by IMAD. continued to increase whereas the number of persons included in education declined for seasonal reasons (the participation of unemployed persons in formal education otherwise remains high, though lower than in 2009). The number of registered unemployed persons continued to increase in December, totalling 110,021 at the end of the month. According to seasonally adjusted data, its growth even accelerated in December (3.7%). In October, the unemployment rate rose by 0.4 p.p. compared with September, to 10.9%, largely as the result of a seasonal increase in the number of first-time job-seekers who had finished school. Further unemployment growth in November and December indicates that the unemployment rate, which has not been as high as in October since February 2004, is even likely to increase further. Figure 22: Inflow into unemployment due to job loss, by reason -----Expiry of temporary employment contracts ---Written statement -Bankruptcy ---------Winding up of businesses -----Business reasons, compulsory settlements -<- 5,000 4,000 3,000 2,000 1,000 0 The average gross wage per employee in October remained practically unchanged for the third month in a row. In the first ten months it recorded similar y-o-y growth (3.9%) as in 2009, exclusively as a result of wage growth in the private sector. In both sectors the average gross wage increased only marginally in October. Nominal growth in the private sector (0.1%) was favourably impacted by increased payments for overtime work and payments in arrears, such as 13'h month payments and Christmas bonuses, which are usually to a smaller extent already disbursed in that month. Wage growth in the public sector (0.3%) was mainly due to higher payments for overtime work5 so that the average gross wage rose more noticeably only in health and social work. Only private sector wages rose in the first ten months of the year (by 5.2% y-o-y), substantially more than in the same period of 2009, largely as a result of the increase in minimum wage in March. Growth was thus mainly underpinned by the outstanding wage rises in manufacturing, 9.2%, Source: ESS. 5 After in September the medical personnel withdrew their consent to work beyond the scope of overtime work prescribed by law, they resumed extra overtime work in October. Table 4: Wages by activities Gross wage per employee, in EUR Growth rates, % 2009 X 2010 2009/ 2008 X 10/ IX 10 X 10/ X 09 I-X 10/ I-X 09 A Agriculture, forestry and fishing 1,198.03 1,270.19 -0.2 -0.8 5.6 5.4 B Mining and quarrying 1,831.20 1,779.85 0.9 -3.4 -0.4 2.9 C Manufacturing 1,203.38 1,301.23 0.8 0.2 5.1 9.2 D Electricity, gas, steam and air conditioning supply 2,020.95 1,978.23 3.8 -0.5 -3.4 2.8 E Water supply sewerage, waste management and remediation activities 1,413.04 1,394.22 2.0 -0.5 -1.2 2.2 F Constrution 1,160.16 1,228.42 1.0 0.1 5.6 4.3 G Wholesale and retail trade, repair of motor vehicles and motorcycles 1,277.51 1,331.92 1.9 0.7 4.2 3.7 H Transportation and storage 1,393.16 1,407.38 0.7 -4.2 2.6 1.7 I Accommodation and food service activities 1,032.97 1,079.66 1.6 1.1 5.1 4.0 J Information and communication 2,038.65 2,044.80 1.4 -0.3 1.1 2.2 K Financial and insurance activities 2,122.72 2,067.27 -0.7 0.6 -4.1 1.7 L Real estate activities 1,435.09 1,457.55 1.9 1.7 0.8 3.3 M Professional, scientific and technical activities 1,737.98 1,738.62 2.1 0.3 -0.2 1.7 N Administrative and support service activities 914.93 962.48 1.8 1.9 5.5 4.0 O Public administration and defence, compulsory social security 1,788.30 1,792.83 5.9 0.0 1.3 -0.6 P Education 1,719.27 1,725.82 3.6 -0.4 0.6 0.6 Q Human health and social work activities 1,752.78 1,742.77 12.0 1.6 0.3 -0.3 R Arts, entertainment and recreation 1,723.15 1,725.22 3.9 0.1 -2.2 0.7 S Other service activities 1,340.92 1,397.05 1.3 1.3 5.4 4.6 Source: SORS; calculations by IMAD. while it averaged 3.3% in other private sector activities. The average gross wage in the public sector stagnated in the same period due to restrictive wage policy measures, after two years of strong growth (in the same period of 2009, wage growth totalled as much as 7.9%). Figure 23: Gross wage per employee -Total -----Private sector -Public sector 1,800 1,700 cc 3 m 'S 1,600 JD 1,500 i;; 1,400 1,300 1,200 f r / /'A III \ i 'i) u:\i A. -- ■ , < V 1 » 1 V/ V r i Prices Consumer Consumer prices rose by 0.1% in December and 1.9% in the year 2010 as a whole, which is slightly more than a year earlier (1.8%). According to the preliminary data by Eurostat, prices increased by 2.2% in the euro area in 2010 (HICP). In 2010, Slovenia recorded similar measured inflation as the euro area, but much lower core inflation (excluding the prices of energy and non-processed food). Figure 24: Measured and core inflation (excluding energy and non-processed food) - HICP -HICP -Slovenia -----HICP core inflation ■ -Slovenia -HICP -Euro area .....HICP core inflation ■ -Euro area Source: SORS; calculations by IMAD. 10 8 6 4 2 0 Table 5: Breakdown of HICP into sub-groups - the first eleven months of 2010 Evro area Slovenia Cum. % Weight % Contribution in p.p. Cum. % Weight % Contribution in p.p. Total HICP 2.1 100.0 2.1 1.6 100.0 1.6 Goods 3.2 66.2 2.1 2.4 58.0 1.4 Processed food, alcohol and tobacco 3.5 14.8 0.5 1.3 11.9 0.2 Non-processed food 5.1 6.9 0.3 2.5 7.3 0.2 Non-energy industrial goods -0.4 30.7 -0.1 1.0 29.3 0.3 Durables -4.3 11.5 -0.5 0.3 9.5 0.0 Non-durables 0.5 8.8 0.0 1.1 8.3 0.1 Semi-durables 4.4 10.3 0.5 2.0 11.5 0.2 Energy 10.1 13.9 1.4 8.4 9.6 0.8 Electricity for households 5.9 2.6 0.2 2.7 2.4 0.1 Natural gas 16.4 0.8 0.1 7.5 1.5 0.1 Liquid fuels for heating 21.5 1.5 0.3 18.9 0.8 0.1 Solid fuels 1.2 1.0 0.0 1.4 0.1 0.0 District heating 11.3 0.8 0.1 0.2 0.5 0.0 Fuels and lubricants 9.9 7.2 0.7 10.7 4.2 0.5 Services -0.1 33.8 0.0 0.5 42.0 0.2 Services - dwellings 5.0 2.7 0.1 1.4 10.2 0.1 Services - transport 1.8 5.2 0.1 1.2 6.6 0.1 Services - communications 2.7 3.4 0.1 -0.9 3.3 0.0 Services - recreation, repairs, personal care -3.8 14.3 -0.5 -0.7 14.9 -0.1 Services - other services 2.6 8.1 0.2 1.4 7.1 0.1 HICP excluding energy and non-processed food 0.2 79.3 0.2 0.7 83.2 0.6 Source: Eurostat; calculations by IMAD. Note: ECB classification In the first eleven months of 2010, inflation was mainly due to energy price rises and higher taxes. Consumer prices increased 1.8% in that period. Energy price rises contributed 1.3 p.p., of which around 0.5 p.p. came from higher excise duties. In 2010, the total impact of higher taxes totalled 0.8 p.p. to 0.9 p.p., due to higher excise duties on energy, as well as tobacco and alcohol, but also as a result of changes in certain other taxes. In other price groups, price movements were relatively moderate, with the exception of prices of fresh food, which rose by 8.5%, and prices of school meals, which declined by 68.8%. Higher prices of non-energy commodities and food on international markets hardly passed through to inflation in 2010. Higher euro prices of non-energy commodities (22.9%) and food (20.7%) on global markets were not passed on to higher retail prices in the first eleven months of the year, neither in Slovenia nor in the euro area. Retail food prices6 increased by 1.2% in the euro area in the first eleven months of 2010 (in Slovenia by 2.3%). In all euro area countries but Italy and Ireland, food price growth reflected higher prices of non-processed food, particularly prices of fresh fruit and vegetables. Prices of non-processed food increased 2.3% in the euro area (4.9% in Slovenia). Prices of processed food increased less, except in some countries of the euro area (Slovakia, Malta). In Slovenia, bread prices even declined in that period, while the euro area recorded lower prices of oils and fats and some other food products. The relatively weak pass-through of higher food prices from the international environment to retail prices of processed food is related to uncertainties in the macroeconomic environment, with the food-processing industry and food sellers facing limitations in rising prices. Figure 25: Prices of processed and non-processed food in euro area members - November 2010 8 7 6 Comparisons between countries are made using the HICP. Source: Eurostat; calculations by IMAD. 6 5 e 4 3 2 0 The moderate dynamics of core inflation7 also continued in November. In November last year, core inflation measures also indicated moderate long-term inflation movements, which were related to the absence of inflationary pressures by the side of demand. Y-o-y growth rates of key core inflation indicators were at the interval between 0.0% and 1.2% in November last year. Industrial producer prices increased y-o-y in November, while the prices of business services have stagnated since the second quarter of 2009. Y-o-y growth in producer prices on the domestic market increased, after totalling 2.6% in May, and stood at 3.2% in November. Even though the y-o-y increase in domestic producer prices in November was still highly related to price dynamics in the manufacture of metals and metal products (which already showed signs of moderation and was impacted by metal price movements in the international environment), the impact of price growth in other activities was somewhat stronger. In November, relatively high y-o-y growth rates were recorded for the manufacture of chemicals and pharmaceutical preparations and the manufacture of furniture, while price growth in the manufacture of food products strengthened for the third month in a row, which could also be related to price pressures from the international environment. The available data on price growth in business services, on the other hand, indicate that prices even dropped somewhat y-o-y in the third quarter8 of 2010 (-0.2%). They have been hovering around zero since the second quarter of 2009, which corroborates the absence of major inflationary pressures from the domestic environment. Slovenia's price competitiveness deteriorated in October due to the strengthening of the exchange rate of the euro, but continued to improve y-o-y, though less noticeably than price competitiveness in most other euro area countries. The euro gained value against most currencies inside and outside the EU in October, but the loss of Slovenia's Figure 26: Industrial producer prices and prices of business services -PPI -domestic market .........PPI -import prices ----PPI - non-domestic market -Business services 10 i; 4 5 -2 -4 price competitiveness mainly reflected its appreciation against the USD and GBP. The real effective exchange rate measured by relative consumer price growth therefore increased in October (by 0.7%), after mainly declining in the first nine months of 2010, particularly under the impact of the depreciation of the euro. Price competitiveness continued to improve y-o-y in October, but less than in other euro area countries. Slovenia's relatively worse position was partly due to the structure of Slovenia's external trade,9 but also to the increase in relative prices, which were falling in most other euro area members. In the first half of 2010, price competitiveness deteriorated y-o-y10 in most of the EU countries outside the euro area, particularly under the impact of the strengthening exchange rates of other EU currencies. Table 6: Indicators of price and cost competitiveness y-o-y growth rates, % 2008 2009 q4 09 q1 10 q2 10 q3 10 Effective exchange rate* Nominal 0.5 0.4 1.8 -0.3 -1.9 -2.3 Real, deflator CPI 2.8 0.7 2.3 -0.3 -1.3 -1.7 Real, deflator PPI 0.8 2.8 1.4 -2.4 -3.3 -2.9 Real, deflator ULC 3.0 4.9 4.4 1.9 -0.5 -0.9 Unit labour costs, economy and components Nominal unit labour costs 5.9 8.5 3.3 1.5 0.6 0.9 Compensation per employee, nominal 6.9 1.6 0.9 3.4 5.0 4.4 Labour productivity, real 1.0 -6.4 -2.3 1.9 4.4 3.4 Real unit labour costs 1.8 5.1 1.3 1.2 -0.6 -0.7 Labour productivity, nominal 5.0 -3.3 -0.5 2.2 5.6 5.2 Source: SORS, ECB, EUROSTAT, OECD; calculations by IMAD. Note: ^relative to the 17 trading partners 7 Prices excluding seasonal and one-off factors. 8 The latest available data. 9 Trade with euro area countries accounts for an above-average share in the structure of Slovenia's external trade, meaning that the depreciation of the euro has a smaller impact on Slovenia's price competitiveness. 10 According to data by the EC. 8 6 2 0 -6 Source: SORS. Figure 27: Real effective exchange rates of euro area members deflated by HICP, in the first ten months of 2010 ■ Jan.- Oct. 10 / Jan.- Oct. 09 ■ Oct. 10 / Dec. 09 Figure 29: Real unit labour costs in selected EU countries11 in the first half of 2010 ■ Labour productivity «Compensation per employee ♦ RULC Source: ECB; calculations by IMAD. Source: Eurostat; calculations by IMAD. The cost competitiveness of the economy improved in the third quarter after a longer period of decline, though less than in most other euro area and EU countries due to relatively high wage growth in the private sector. After a year of a gradual easing of growth, real unit labour costs and the real effective exchange rate deflated by growth in relative unit labour costs declined y-o-y again in the third quarter of 2010 (the former by 0.7%, the latter by 0.9%, according to estimates), while stagnating at the 2009 level in the first nine months as a whole. The improvement in the second and third quarters resulted from a renewed significant increase in labour productivity due to the rebound of economic growth, amid a gradual easing of the y-o-y decline in employment. The relatively high growth in the compensation of employees per employee Figure 28: Real unit labour costs (RULC) in Slovenia and the EU average RULC Slovenia RULC EU -----Labour productivity, Slovenia -----Labour productivity, EU -Compensation per employee, Slovenia -Compensation per employee, EU 9 continued under the impact of stronger wage growth in the private sector, but was, as in the second quarter, lower than labour productivity growth. After Slovenia was in the group of euro area and EU countries with the greatest losses in cost competitiveness since mid-2008 and gradually narrowed the gap, this year's improvement was among the smallest in the euro area and the EU. Slovenia's relatively worse position in 2010 resulted from faster wage growth compared with most other Member States, and in 2009, from a greater drop in productivity. The relatively worse competitive position of Slovenia's economy in the first nine months of 2010 was mainly a result of the pronounced deterioration of cost competitiveness in Figure 30: Cost competitiveness by sector in the first nine months of 2010 ■ Compensation per employee, nominal Labour productivity, nominal ,, »RULC a a Source: Eurostat; calculations by IMAD. A,B C,D,E D F G,H,I J,K L -P Total Source: SORS; calculations by IMAD. 1 Data for the first nine months were available for 21 EU countries. 12 t; 8 L 4 0 the construction sector. The latter reflected the decline in labour productivity due to the contraction of activity in construction followed by a decline in employment with a lag. The compensation of employees per employee in construction increased at the same time, also under the impact of the increase in minimum wage. Manufacturing industries, which had recorded an outstanding deterioration in 2009, were characterised by a significant improvement in 2010. Although this year's increase in minimum wage had the greatest impact on growth in the compensation per employee in manufacturing, real unit labour costs declined significantly amid a concurrent (and even much greater) increase in labour productivity. In the first quarter, labour productivity growth was largely a result of shrinking employment, while in the second and third quarters, it was also due to a pronounced increase in value added. Balance of payments In October 2010, the deficit of the current account of the balance of payments was at a similar level as in the same month of the previous year, while it was significantly lower y-o-y in the first ten months of the year. The current account of the balance of payments recorded a deficit of EUR 61.0 m in October (EUR 54.7 m in October 2009). In the first ten months of 2010, the deficit amounted to EUR 154.5 m (EUR 529.7 m in the same period of 2009). In the first ten months of 2010, the decline in the current account deficit mainly resulted from a lower deficit in the balance of factor incomes, largely as a consequence of lower net outflows of equity capital from direct investment.12 Total net interest payments to the rest of the world had also been lower y-o-y between January and July 2010, but in the period from August to October, they already exceeded their 2009 levels, due to the maturity of payments of interest on bonds and notes. The merchandise deficit increased y-o-y in October and was also higher y-o-y in the first ten months of 2010. In the first ten months, real growth in merchandise exports exceeded real growth in imports. However, considering the deteriorating terms of trade, exports and imports recorded nearly equal growth. The surplus in the services balance in October was similar to that in the same month of 2009. In the first ten months it was higher due to a higher net inflow in trade in travel, financial and government services. The balance of current transfers recorded a surplus in October 2010 (a deficit in October 2009) and a deficit in the first ten months of 2010, which was much lower than in the same period of the previous year, largely due to increased absorption of EU funds. Figure 31: Income from capital I From securities I From loans 12 As Slovenian enterprises (Slovenian direct investors) created losses abroad in 2009, equity capital from direct investment (in reinvested earnings) recorded a high net outflow. This net outflow of reinvested earnings (which is still an estimate based on the average of the previous three years) was much lower this year. I From direct investment -Balance of income from capital Source: BS; calculations by IMAD. Slovenia recorded a net capital inflow (EUR 388.9 m) in the first ten months of 2010 (a net outflow of EUR 45.5 m in the same period of 2009), as a result of smaller corporate deleveraging amid further, albeit also slower, general government borrowing. Financial transactions with the rest of the world recorded a net inflow in the amount of EUR 50.6 m again in October, but with weaker flows in all main components of the financial account of the balance of payments (a net inflow in the amount of EUR 86.3 m in the previous October). The net capital inflows of the BS and general government exceeded the net capital outflow of the private sector in October. In the first ten months of 2010, the net capital inflow of the government sector exceeded significantly the net capital outflows of the private sector and central bank. Direct investment recorded net inflows both in October and in the first ten Figure 32: Financial transactions of the balance of payments by instrument Direct investment Portfolio investment Financial derivatives Other investment 6000 -Net financial flow 4000 cc 2000 13 -2000 -4000 0 Table 7: Balance of payments I-X 10, EUR m Inflows Outflows Balance1 Balance, I-X 09 Current account 20,544.8 20,699.3 -154.5 -529.7 - Trade balance (FOB) 15,191.0 15,772.7 -581.7 -462.4 - Services 3,776.8 2,765.0 1,011.8 959.4 - Income 735.4 1,240.9 -505.5 -733.9 Current transfers 841.7 920.7 -79.1 -292.9 Capital and financial account 3,840.7 -3,337.8 502.9 142.3 - Capital account 248.1 -182.3 65.7 33.0 - Capital transfers 246.8 -178.3 68.4 38.6 - Non-produced, non-financial assets 1.3 -4.0 -2.7 -5.6 - Financial account 3,592.6 -3,155.5 437.2 109.3 - Direct investment 281.3 -144.3 137.0 -475.1 - Portfolio investment 2,269.2 -669.3 1,599.9 4,303.9 - Financial derivates 9.4 -96.0 -86.7 2.5 - Other investment 1,032.8 -2,294.1 -1,261.3 -3,876.8 - Assets 553.1 -538.3 14.8 -248.3 - Liabilities 479.7 -1,755.8 -1,276.1 -3,628.5 - Reserve assets 0.0 48.3 48.3 154.8 Net errors and omissions 0.0 -348.4 -348.4 387.5 Sources: BS. Note: 'a 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- months of 2010, compared with net outflows in 2009. While in the first ten months of 2009, the net outflow of direct investment resulted from the net outflow of foreign direct investment exceeding that of domestic foreign investment abroad, Slovenia recorded a net inflow in the same period of 2010 due to a net inflow of foreign direct investment in the form of debt financing between affiliated companies; the net outflow of domestic direct investment abroad remained at the level of 2009. Portfolio investment recorded net inflows both in October and in the first ten months of 2010 as a whole. In the first ten months of 2009, the inflow was even much higher than in 2010 due to the issuance of bonds. Other investment recorded net outflows in October and in the first ten months, but they were much smaller than in the same period of the previous year, which was largely due to smaller repayments of foreign loans. Net external debt remained at September's level in October, totalling EUR 11.5 bn (32.3% of estimated GDP). Table 8: Gross and net external debt positions Financial markets The lending activity of domestic banks remained modest in November. Net flows of loans to domestic non-banking sectors totalled a mere EUR 16.1 m, the lowest figure in 2010. Banks only recorded net lending to households and the general government in November, while enterprises and NFIs made net repayments of loans for the second month in a row. Y-o-y growth in net flows of loans to Figure 33: Net flows and growth in the volume of domestic bank loans to domestic non-banking sectors Households (left axis) Enterprises&NFI (left axis) ^^■Government (left axis) -----Households (right axis) -Enterprises&NFI (right axis) -Total (right axis) December 2009 October 2010 Difference In EUR bn In % of GDP In EUR bn In % of GDP In EUR bn Shares in GDP in p.p.. Gross external debt 40.3 113.8 42.1 117.5 1.8 3.7 Gross external claims 29.6 83.6 30.5 85.3 0.9 1.6 Net external debt 10.7 30.2 11.5 32.3 0.9 2.1 Source: BS. Note: Nominal data as of the end of the month. Shares in GDP for 2010 calculated by IMAD based on GDP from the Autumn Forecast 2010. 0 -10 Table 9: Financial market indicators Domestic bank loans to nonbanking sector and household savings Nominal amounts, EUR bn Nominal loan growth, % 31. XII 09 30. XI 10 30. XI 10/ 31. X 10 30. XI 10/ 30. XII 09 30. XI 10/ 30. XI 09 Loans total 32,444.95 33,555.52 0.0 3.4 3.5 Enterprises and NFI 23,161.09 23,185.91 -0.5 0.1 -0.1 Government 870.95 1,144.41 4.2 31.4 34.5 Households 8,412.91 9,225.20 0.8 9.7 10.6 Consumer credits 2,899.95 2,850.48 1.5 -1.7 -1.6 Lending for house purchase 3,927.13 4,740.21 0.9 20.7 22.7 Other lending 1,585.84 1,634.51 -0.5 3.1 3.3 Bank deposits total 14,313.07 14,679.66 0.2 2.6 3.7 Overnight deposits 5,655.00 6,123.35 0.8 8.3 9.7 Short-term deposits 5,116.28 4,488.60 -1.2 -12.3 -13.8 Long-term deposits 2,874.95 4,057.44 1.0 41.1 48.4 Deposits redeemable at notice 666.84 10.28 -2.9 -98.5 -98.4 Mutual funds 1,856.30 1,990.11 0.7 7.2 10.0 Sources: Monthly Bulletin of the BS, SMA (Securities Market Agency); calculations by IMAD. domestic non-banking sectors was again somewhat stronger, but only as a result of the extremely low level of lending at the end of 2009. In the first eleven months of 2010, banks extended a net EUR 1,110.6 m in loans to domestic non-banking sectors, almost 30% more than in the comparable period of 2009. Banking system liquidity improved somewhat in November. After two months of decline, banks thus again recorded net inflows of government and household deposits while they continued to repay foreign deposits and loans. Lending activity in the euro area strengthened notably in November. Net flows of all loans amounted to EUR 163.7 bn, the highest figure in the last three years. The bulk of net flows were attributable to enterprises and NFIs, which borrowed more than EUR 90 bn net in November alone. Figure 34: Net flows and growth in the volume of bank loans to non-banking sectors in the euro area I Households (left axis) ■ Government (left axis) - Enterprises&NFI (right axis) Enterprises&NFI (left axis) Households (right axis) Total (right axis) 120 90 C 60 (D Ü^ 30 cc 3 0 -30 -60 18 250 15 200 12 150 9 Sp c (D 6 100 (D CC 3 Üü 50 0 -3 0 -6 -50 -9 -100 -12 Nearly three quarters of this amount were loans taken out by NFIs, though enterprises also recorded the highest net inflows in 2010. Among the euro area countries, besides Slovenian enterprises and NFIs, Irish and Portugal enterprises and NFIs also repaid their loans in net. In the first eleven months of 2010, net flows of loans in the euro area totalled close to EUR 500 bn, while in the same period of 2009, non-banking sectors made net repayments in the amount of EUR 13.2 bn. Household borrowing strengthened somewhat in Slovenia in November. Monthly net flows amounted to EUR 75.9 m, which is just above the monthly average in the first eleven months of 2010. Also in November, the bulk of net flows came from housing loans, which strengthened somewhat relative to October, but were still among the lowest in 2010 (EUR 43.3 m). Unlike in previous months, Figure 35: Net flows of household loans by purpose 300 lOtherlending ■ Consumer credits ■ Lending for house purchase I I I I ^ Source: BS; calculations by IMAD. net flows of consumer loans stood out significantly, being way the highest in the last three years (EUR 40.8 m). In the first eleven months of 2010, they nevertheless recorded a net outflow of close to EUR 50 m. Households borrowed a net EUR 812.3 m from domestic banks in that period, 56.9% more than in the comparable period of 2009. In November, enterprises and NFIs again net repaid their loans taken out at domestic banks. Net repayment was again only recorded for enterprises, while NFIs saw a modest net inflow for the second time in a row. After corporate borrowing started to strengthen gradually at the beginning of the year, net flows declined in the last four months, most notably since the beginning of the financial crisis. Enterprises and NFIs repaid close to EUR 350 m of loans net in that period. In the first eleven months of 2010, they borrowed a net EUR 24.8 m, more than two thirds less than in the same period of 2009. After enterprises and NFIs recording net borrowing abroad in the previous two months, they once again repaid foreign loans in net in October. Net repayments were otherwise fairly modest, EUR 3.7 m, but unlike in most previous months, when enterprises net repaid foreign loans, net repayments resulted from the repayment of long-term loans, while net flows of short-term loans reached the highest value in 2010 (EUR 8.7 m). Enterprises and NFIs repaid foreign and domestic loans in a net amount of EUR 83.8 m in the first ten months of 2010 (in the same period of 2009, they recorded net borrowing in the amount of EUR 0.5 bn). Figure 36: Net corporate and NFI borrowing abroad and differences in interest rates Loans (left axis) -Difference between domestic and foreign interest rates (right axis) 340 310 280 250 J2 !Z 220 JD 190 JS 160 130 100 0 -50 -100 -150 -200 -339.3 CO o^ o^ Source: BS; calculations by IMAD. Box 4: Non-performing assets of the banking sector Deterioration in banks' asset quality intensified in 2010 and banks created additional impairments and provisions, which is, besides strongly limited sources of finance, one of the main reasons why the growth rate of lending activity remains low. On one hand, banks financed the least risky segments in the first ten months of 2010, such as households and the government sector, but they also provided funds for riskier activities where the situation is still deteriorating at a rapid pace, which intensified the negative trend in banks' asset quality. In the first eleven months of 2010, banks thus created almost EUR 600 m of additional impairments and provisions, nearly two thirds more than in the comparable period of 2009. Figure 37: Growth in banks' claims on the most exposed sectors and the share of non-performing loans Figure 38: Creation of additional impairments and provisions in Slovenia's banking system 8 7 6 1= J2 5 .Ie O C ^ 2 JZ m 1 0 -1 Mf. of food products, ^ beverages ana tobacco products Professional, scientific and ▼ technical activities ^ Construction Manufacturing ♦ ♦ ♦ TOTAL Households ^ Education Financial, insurance ♦ activities Public admin. ^ and defence, compul. soc. sec. 105 90 75 60 ^^ 45 iE al 30 15 -15 -10 -5 0 5 10 15 Growth in claims on individual sectors, Oct. 10/Dec.09 (in % Source: BS; calculations by IMAD. 9 0 Box 4: Non-performing assets of the banking sector - continue In the first ten months of 2010 alone, the level of non-performing bank claims increased by more than one third, compared with less than 30% in the year 2009 as a whole at a much lower base. The share of non-performing claims climbed to 3% by the end of October, while their volume reached nearly EUR 1.5 bn. More than two thirds of non-performing claims are claims against financial and non-financial entities, with the manufacturing sector accounting for the greatest share, largely due to its size, as growth in non-performing claims was below average in this sector. In terms of growth, non-performing claims against the construction sector stand out the most, and increase further at a faster-than-average rate. The volume of banks' total claims against the construction sector is also growing at an above-average pace. The year 2010 also saw faster growth in non-performing claims against foreigners and households, but their share did not increase much due to a relatively high level of claims against households. The situation regarding the quality of bank assets is not yet easing, which is also evidenced by data on C-grade loans. Their volume otherwise strengthened by just over 60% in the first ten months of 2010, which is more than half less than in the same period of 2009, but the net inflow into this credit grade was more than one third higher than in the same period of 2009, despite stronger outflows to lower credit grades. Figure39: Share of non-performing claims 3.0% 2.5% as 2.0% 1.5% 1.0% 0.0% 2006 2007 2008 2009 Source: BS; calculations by IMAD. Oct-10 Figure 40: Net inflows of non-performing claims of the banking sector in the first ten months of 2009 and 2010 Source: SORS; calculations by IMAD. Foreign sources of financing of the Slovenian banking system remain fairly limited. Banks also made net repayments of foreign loans in October. A modest net inflow was only recorded for short-term loans, while long-term loans and deposits saw a net outflow. Total net repayments thus amounted to EUR 373.4 m in October. In the first ten months, banks repaid EUR 1.3 bn net of foreign deposits and loans, nearly 60% less than in the same period of 2009. Household and government deposits in banks strengthened in November. Net inflows of household deposits amounted to EUR 33.4 m, which is the average monthly level in the first eleven months of 2010. Sight deposits strengthened the most in November. Net inflows of long-term deposits were more moderate once again and thus lagged significantly behind the level recorded in the first half of the year. Net inflows of household deposits to banks totalled EUR 366.6 m in the first eleven months of 2010. This is more than one fifth less than in Figure 41: Net bank borrowing abroad ■ Deposits «Short-term «Long-term 600 400 200 0 ^ -200 (D -400 cc 0] -600 -800 -1000 -1200 -1400 J^ je ii Source: BS. 3.5% Box 5: Sources of finance in the Slovenian banking system While the government represented an important source of bank assets in 2009, amid stronger borrowing, it mainly withdrew its deposits from the banking sector in a net amount in the first eleven months of 2010. In November, the volume of deposits declined by as much as EUR 1.5 bn from its January peak (EUR 4.5 bn). In the previous year, government deposits recorded high inflows in January (close to EUR 0.5 bn), when the government issued bonds in the amount of EUR 1.5 bn, and then again in June, which is, according to our estimate, due to the transfer of government deposits from the BS account to the accounts in commercial banks. In the previous year, the government mainly withdrew short-term deposits from banks, while the volume of long-term deposits strengthened somewhat in the first eleven months. In 2010, banks thus had to seek other sources to discharge matured liabilities, which were otherwise much lower than in the previous year.1 They therefore reduced their deposits with the Eurosystem and foreign banks by a total of EUR 1.1 bn. Pressures on the liquidity of Slovenia's banking system are expected to continue, given that the share of foreign loans and deposits remains high and that a significant part of long-term government deposits will become due in 2011. With low growth rates of household deposits in banks and outflows of government deposits from the banking system, banks will remain highly dependent on foreign sources of finance. In the current situation, a bank's financial strength (which can be, among other indicators, measured by the tier 1 capital ratio) is particularly important in obtaining long-term sources of finance. Slovenia's banking system is among those with low core capital with regard to the risk-adjusted assets. On a consolidated basis, the value of the indicator was below the EU average in 2009 and even declined by the end of June 2010, while the indicator value according to the ECB data for larger bank groups even increased somewhat in the first half of 2010. The capital adequacy of Slovenia's banking system can be expected to worsen further, given the rapid deterioration in the quality of banks' total assets. It will be therefore all the more difficult and expensive to provide the much needed sources of finance, which may be reflected in even higher lending interest rates and a significant decline in bank investment. Figure 42: Inflows of government deposits to banks and issuance of government bonds 1500 1200 l^300 -900 ..........i........ I Net flows I Issuance of bonds rnr o < ^ o Source: BS; calculations by IMAD. Figure 43: Tier 1 capital ratio on a consolidated basis 22 1200^ June 2010 - EU 2009 20 18 16 14 12 10 8 6 4 2 0 ^H 2008 ---EU 2008 4-4 -i.....f "! Source: BS; calculations by IMAD. 1 In the first ten months of 2010, banks thus repaid foreign deposits and loans in a net amount of EUR 1.3 bn, which is nearly 60% less than in the same period last year. the comparable period of 2009, which is also attributable to the unfavourable labour market situation. After two months of net outflows, government deposits increased in November. Net inflows amounted to EUR 217.8 m, the highest value in the second half of the year. Short-term deposits accounted for nearly two thirds of net inflows. Despite November's net inflows, the total volume of government deposits recorded a net outflow of close to EUR 600 m in the first eleven months of 2010 (a net inflow of EUR 2.5 bn in the same period of 2009). 0 Figure 44: Net inflows of household and government deposits to banks and y-o-y change in stock Households (left axis) Government deposits (left axis) -Deposits, total (right axis) -Households (right axis) ----Government deposits (right axis) 1500 200 160 120 80 j^' H o 40 0 -40 -80 -120 Source: BS; calculations by I MAD. Public finance In the first eleven months of 2010, revenue from taxes and social security contributions13 dropped by 1.4% relative to the same period last year, with payments amounting to EUR 11.8 bn. In the first eleven months of the year, only revenues from value added tax (VAT), excise duties and social security contributions increased y-o-y, while revenues from all other main tax categories declined. Inflows of value added tax (VAT) rose by 2.5% in that period. At the beginning of the year 2010, VAT inflows shrank due to shorter deadlines for VAT refunds, and the recorded growth was due to the effect of a very low base, as VAT inflows had dropped most notably due to lower economic activity in the comparable period of 2009. Revenue from excise duties14 increased 0.9% y-o-y in the same period. The increase was due to revenue from excise duties on tobacco and tobacco products (2.0 p.p.) and alcohol and alcohol products (0.4 p.p.), while the total growth of revenue from excise duties declined by 1.4 p.p. due to lower revenue from excise duties on energy. The quantity of excise products sold declined y-o-y in the first ten months, largely as a consequence of higher excise duties.15 Revenue from social security contributions increased 1.0% y-o-y in the first eleven months. In that period, the largest y-o-y decline was recorded for revenue from corporate income tax (-38.5%), which declined as a 13 Based on the Report on Payments of All Public Revenues, January-November 2010, Public Payments Administration. 14 The figure for excise duties is corrected for the timing of excise duty payments. 15 Excise duties on beer, intermediate beverages and alcohol, tobacco and tobacco products were raised in July. Excise duties on electricity increased in August, and excise duties on petrol and gas oil several times September and October. In the first ten months, the quantity of sold alcohol and alcohol products declined by 9.6% y-o-y, the quantity of sold tobacco and tobacco products by 3.5% and the quantity of main mineral oils by 2.3%. result of refunds based on tax assessments taking into account business results for the previous year, tax relief and a lower tax rate. The new monthly prepayments are much lower than in 2009: they have been determined according to business results for 2009, but tax payers are also able to request a reduction on the basis of deteriorated business performance in the current year and a 1 percentage point lower statutory tax rate (20.0%). Revenue from personal income tax declined 3.1% y-o-y: revenue from tax on income from employment was slightly higher (0.7%), but there was a significant drop in revenues from other personal income tax sub-categories (15.8%), particularly from taxes on income from entrepreneurial profits and income from capital gains. Tax refunds based on final personal income tax assessments for 2009 were also much higher y-o-y in the first eleven months (EUR 106 m; EUR 85 m a year before). Figure 45: Taxes and social security contributions -Taxes on income and profit - Social security contributions - Domestic taxes on goods and services Total Source: PPA; calculations by IMAD. According to the consolidated balance16 of the MF, general government revenues amounted to EUR 10.4 bn and expenditure to EUR 12.1 bn in the first nine months of 2010. The deficit thus totalled EUR 1,669 m. Revenue increased 0.5% y-o-y (in the same period of 2009, it declined by 7.5%), while expenditure recorded 3.4% y-o-y growth (8.3% last year). In terms of economic structure of expenditure, all categories of general government expenditure were up y-o-y in that period, except expenditure on capital transfers (6.6%), which declined by 6.6%. Interest payments recorded the highest growth (49.5%). Transfers to individuals and households were 4.2% higher y-o-y (5.2% excluding pensions); expenditure on transfers to the unemployed increased the most (30.4%), given the deteriorated situation on the labour market. Strong growth was also recorded for expenditure on sickness 16 The consolidated balance (according to the cash flow methodology) includes revenues and expenditures of the state and local government budgets, as well as revenues and expenditures of the pension and health funds. Figure 46: Consolidated general government revenue and expenditure -General government revenues — General government expenditures 1,400 Source: MF; calculations by IM AD. Box 6: Financing borrowing requirements in 2010 benefits (11.5%). Cumulative y-o-y growth in expenditure on pensions slowed towards the end of 2009, but has been stable since February 2010. Expenditure on pensions was thus 3.6% higher y-o-y in the first nine months. This period also saw increased expenditure on subsidies (2.3%) and higher capital expenditure (2.3%). Expenditure on wages and other personnel expenditures increased by 0.2%, while expenditure on goods and services was at the same level as a year earlier. The state budget deficit climbed to EUR 1.6 bn in the first nine months of 2010. With expenditure increasing by 3.2%, the total balance of local government budgets also recorded a deficit in that period (EUR 50 m). The deficit of the health fund stood at EUR 29.3 m. The transfer from the state budget into the pension fund amounted to EUR 1,131. m in the first nine months (7.5% more than a year earlier). The available data on the borrowing requirement and financing needs for 2011 in a sample of EU countries for which information is available indicate that the ratio of Slovenia's government borrowing requirement (central government) to the size of debt (both as a percentage of GDP) is similar to that in most other countries. Slovenia has both relatively low debt ratio (2010) and low borrowing requirement (2011). The borrowing requirement is primarily explained by budget deficits and maturing debt in a given year, but there are other operations ("below the line operations") that can also generate debt, such as debt assumption, capitalisation, etc. For 2011 Slovenia exhibits one of the lowest borrowing requirements in the EU. This is explained primarily by the budget deficit (two thirds of borrowing requirements) and to a lesser extent by maturing debt (34%). The relatively low size of maturing debt is a result of the debt strategy followed in previous years and is reflected in the debt maturity profile. In Slovenia, the debt maturity profile is flat and spread out without major concentrations of debt maturing in a single year. From the point of view of refinancing, such a debt strategy (prioritizing issuance of long-dated debt instruments) seems also appropriate for the future as this disperses the refinancing risk evenly in a decade in which debt issuance in the EU market will be bulky. Figure 47: Government debt and financing needs 2011 Figure 48: Repayment of principal 20 Q i-Sl 15 10 ^ 5 1,600 1,400 1,200 1,000 'SE cr ui 800 400 200 20 40 60 80 100 120 140 160 Debt in % of GDP Source: EC, IMF, MF; calculations by IMAD. C3 rNm^unv-Oi-^ooc^o«— CN 25 Table 10: Consolidated general government revenue and expenditure 2009 2010 EUR m % of GDP Growth, % I-IX 2010 v mio EUR IX 10/ IX 09 I-IX 10/ I-IX 09 Revenues - total 14,404.0 40.7 -6.1 10,437.2 8.2 0.5 - Tax revenues 12,955.3 36.6 -7.0 9,358.6 5.9 -1.5 - Taxes on income and profit 2,805.1 7.9 -18.5 1,784.3 1.4 -13.4 - Social security contributions 5,161.3 14.6 1.3 3,871.6 3.1 1.2 - Domestic taxes on goods and servises 4,660.1 13.2 -3.0 3,454.8 9.5 2.3 - Receipts from the EU budget 596.5 1.7 63.3 382.4 325.6 21.4 Expenditure - total 16,365.4 46.3 6.0 12,105.8 9.6 3.4 - Wages and other personnel expenditure 3,912.3 11.1 9.3 2,932.9 2.4 0.2 - Purchases of goods and services 2,506.8 7.1 -0.8 1,769.3 0.2 0.0 - Transfers to individuals and households 6,024.1 17.0 7.3 4,714.8 3.6 4.2 - Capital expenditure 1,293.3 3.7 3.3 726.1 4.7 2.3 - Capital transfers 495.2 1.4 8.1 219.3 -2.3 -6.6 - Payment to the EU budget 439.3 1.2 2.7 315.7 52.6 0.8 Slovenia received EUR 63.7 m from the EU budget in November. In December, the absorption strengthened, as expected, according to the preliminary data of the MF, and Slovenia closed the year 2010 with a positive net budgetary position relative to the EU budget.17 Slovenia paid EUR 13 m into the EU budget in November, which is approximately one third of its payments in October. Its positive net budgetary position amounted to EUR 50.6 m in November (compared with EUR 11 m in October), which was the highest monthly amount in 2010. In the first eleven months as a whole, Slovenia received just below EUR 492 m from the EU budget, which was 47.4% of funds envisaged in the supplementary budget for 2010. Almost half of all funds (48.8%) came from structural funds, though only 45.2% of what had been planned for structural funds in the supplementary budget for 2010. Funds for the implementation of the common agricultural and fisheries policies represented 35% of all receipts in the first eleven months of 2010, and 67% of the level planned. Funds under the cohesion policies were again low (EUR 5.4 m). Similar to the monthly level, receipts for the cohesion policy were also low in the first eleven months (below EUR 57 m), only 28% of what had been envisaged for 2010. By the end of November, Slovenia paid EUR 363.7 m into the EU budget, which was 88.1% of what it was expected to pay in 2010. Slovenia's net budgetary position against the EU budget was thus again positive in the first eleven months of 2010 (EUR 128 m). Figure 49: Planned and absorbed EU funds Common Agricultural Policy Cohesion policy Internal policies Other Pre-accession EU funds I Funds planned by the state budget for 2010 I Funds planned by the state budget for 2009 I Total funds received in 2010 (Jan-Nov) I Total funds received in 2009 (Jan-Dec) 100 200 300 400 EUR million Source: MF; calculations by IMAD. 500 600 17 The data for December are provisional and will therefore be analysed in detail in the next issue of the SEM. They are partly presented in the Selected topic, p. 33 Source: MF. 0 M %J a o ■o 01 u 31 0! Revised state budgets for 2011 and 2012 The National Assembly adopted a revised state budget for 2011 to cut government spending with regard to the budget adopted in December2009 and adjust it to lower revenue. In drafting and adjusting the state budgets, the government pursued the economic and fiscal policy goals as defined in the Budget Memorandum for 2011 and 2012. State budget revenue shrank by EUR 493 m relative to the budget adopted in December 2009, particularly due to the expected lower revenues from corporate income tax, personal income tax and domestic taxes on goods and services. Being reduced by EUR 359 m, budget expenditure was partly matched with lower revenue. The greatest declines relative to what was adopted in December 2009 are projected for capital expenditures, wages and expenditure on goods and services. Interest payments and transfers to the PDII are somewhat lower as well. The budgetary deficit is EUR 134 m higher, given that expenditures were not completely matched with the projected lower revenues. Revenues of the revised state budget for 2011 are set at EUR 8.3 bn and will be 2.7% higher compared with the supplementary state budget for 2010. Growth in state budget revenues will be slower than the foreseen growth of GDP. State budget revenues as a share of GDP will hence decline by a further 0.2 p.p. of GDP. Domestic budgetary sources are expected to increase by 2.8%, and receipts from the EU budget by 2.0%. Looking at domestic sources, growth will increase mainly on account of tax revenues, by 3.4 p.p., while it will decline by 1.0 p.p. due to lower non-tax revenues. The increase in tax revenues will mainly come from the foreseen growth in domestic taxes on goods and services, particularly in value added tax (1.0 p.p.) and excise duties (0.6 p.p.). Statutory changes in value added tax in 2011 mainly pertain to the transposition of European directives into national law and have no major financial impacts. Growth in revenues from value added tax will therefore follow domestic consumption. Growth in revenue from excise duties will be largely due to the base effect, given the increase in excise duties in the middle of 2010. Budget revenues are also expected to increase by 1 p.p. due to higher revenues from corporate income tax, which will be generated by prepayments according to the same tax rate as in the previous year but with somewhat higher tax relief and much lower refunds according to the final tax assessments of business results than in the previous year. Among compulsory levies, a modest contribution to revenue growth will also come from personal income tax and other taxes. Growth in revenue from personal income tax is slowing in 2011, on account of modest wage growth and the impact of additional general tax relief, but also due to increased revenue from personal income tax ceded to municipalities. The adopted state budget sets very high goals for the absorption of European funds, which, in view of the current trends, poses significant risks for the realisation of budgetary revenues. Additional risks are also associated with a lower realisation of revenues than envisaged in the supplementary budget for 2010, as state budget revenues from certain sources will be overestimated due to a lower base. Figure 50: Budget revenues according to main sources 5,000 4,000 3,000 2,000 1,000 X C iS X ^ T3 .SI SŠ Source: MF; calculations by IMAD. Expenditure of the revised state budget for 2011 is set at EUR 10.0 bn, a 1.4% higher figure than envisaged in the supplementary state budget for 2010. Given the current trends, its growth has eased somewhat, being also slower than GDP growth. State budget expenditure as a share of GDP will therefore decline by 0.7 p.p. of GDP relative to the supplementary budget 2010, to 26.9% of GDP. The budgets were prepared according to the principles of performance-based budgeting,18 linking the programme structure to development-oriented policies and development priorities, which is favourable as it allows for more development-oriented expenditure. The government also adopted other measures towards a gradual decline in public finance expenditure. In the short term, it limited the adjustment of wages, social transfers and pensions by passing an emergency law, while in the long term, it plans to reduce and rebalance public finance expenditure by pension and health reforms. According to the economic classification of budget expenditures, the greatest contribution to the 1.4% increase will come from capital expenditures (1.1 p.p.) and capital transfers (0.4p.p.). Somewhat less than half of the foreseen capital expenditures will be allocated for new buildings and adaptations while the rest of the funds will be spent for feasibility studies and project documentation, investment maintenance and renovation, and purchase of equipment. While being favourable in terms of development, rapid growth in capital expenditures adds to upward pressures on government borrowing, particularly as it is highly 18 This approach involves setting clear goals and purposes of spending public finance funds, as well as indicators measuring realisation of goals and performance in public service provision. This means that expenditure planning is goal-based and directly related to actions necessary to secure the goals. 0 The revised state budget for 2011 and the state budget for 2012 adopted in December 2010 anticipate a slower consolidation than envisaged in the budget documents of December 2009, and a divergence from the Stability Programme targets. A gradual decline in the general government deficit is essential to limit further government borrowing growth. Slovenia is also bound to reduce its deficit to meet the provisions of the Stability and Growth Pact (the main instrument of EU fiscal policy coordination and control), which will become even stricter in the future. The budget documents adopted in December 2009 also served as a basis for the Stability Programme prepared by the government in January 2010, laying out a path for fiscal consolidation to eliminate the excessive deficit in line with EC recommendations. The programme defines policies and measures to be taken by the government in the next four years to reduce the general government deficit below the target of 1.6% of GDP in 2013. Fiscal consolidation will be implemented particularly on the side of expenditure. The Stability Programme for 2010 and 2011 therefore stipulates a retrenchment of expenditure growth with a fiscal rule ensuring a nominally unchanged level of integral budget expenditure in both years, and slower growth in expenditure than revenue in the years thereafter. When preparing the current state budgets, the government therefore set a ceiling for state budget expenditures financed from domestic fiscal sources, but given the available budgetary resources, they still generate an excessive state budget deficit. The adopted revisions of the state budget for 2011 and the state budget for 2012 will therefore not suffice to meet the Stability Programme objectives. According to the supplementary budget, the state budget deficit even increased somewhat in 2010 relative to 2009. According to the revisions, it will only decline by EUR 79 m in 2011 with regard to the supplementary budget for 2010, and by a further EUR 265 m in 2012. In both years combined, this is a smaller reduction than should be recorded in one year alone according to the Stability Programme consolidation plans. In its opinion on the Stability Programme (April 2010), the EC also warned that the budgetary outcomes might be even worse than targeted in the programme and that they were increasingly likely to deteriorate over the programming period, particularly after 2011. dependent on the absorption of EU funds. A significant contribution to growth in state budget expenditure will also come from the rising domestic and foreign interest payments (0.4 p.p.) servicing increased government debt. Growth in expenditure on transfers to individuals and households will contribute 0.3 p.p., partly on account of the method of their adjustment and the rising number of people eligible for social transfers, but also as a result of legislative changes.19 State budget expenditure will also increase due to higher payments to the EU budget (0.3 p.p.), higher expenditure on goods and services and growth in other transfers (0.1 p.p. each). According to the supplementary budget for 2010, state budget expenditure on subsidies will decline most notably in 2011, recording as much as 1.1 p.p. lower growth. Growth in state budget expenditure will also decline due to lower expenditure on wages, contributions and other personnel expenditures in government bodies (by 0.3 p.p.) and transfers to public institutions and the Pension and Disability Insurance Institute (by 0.1 p.p. each), as a result of the emergency act stipulating that pensions, wages of civil servants and social transfers can only be adjusted by a quarter of the Figure 51: State budget expenditure by purpose = T3 s: li fi^ c ^ ty ^ a-H Ji X ^^ 1Š !5 IŠ ra C U ra Source: MF; calculations by IMAD. Table 11: State budget revenue, expenditure and balance, 2007-2012 2007 2008 2009 2010 supplementary budget 2011 original budget 2011 revision 2012 STATE BUDGET REVENUE, EUR m 7,799 8,535 7,531 8,107 8,822 8,328 8,695 - share of GDP 22.6 22.9 21.3 22.6 23.7 22.4 22.3 STATE BUDGET EXPENDITURE, EUR m 7,762 8,470 9,260 9,874 10,376 10,017 10,118 - share of GDP 22.5 22.7 26.2 27.6 27.9 26.9 25.9 SURPLUS / DEFICIT, EUR m 37 65 -1,729 -1,767 -1,554 -1,688 -1,423 - share of GDP 0.1 0.2 -4.9 -4.9 -4.2 -4.5 -3.6 Source: MF, Bilten javnih financ (Bulletin of Government Finance), Spremembe proračuna RS za leto 2011 (Amendments to the state budget for 2011), Proračun RS za leto 2012 (State budget for 2012); calculations by IMAD.. 19 Zakon o uveljavljanju pravic iz javnih sredstev (Exercise of Rights to Public Funds Act), Official Gazette of the RS, No. 62/2010, Zakon o socialnovarstvenih prejemkih (Financial Social Assistance Act), Official Gazette of the RS, No. 61/2010. statutory growth. Had the previously anticipated freeze on pensions, civil servants' wages and social transfers been followed through, state budget expenditure could be around EUR 35 m lower. The state budget deficit for 2011 is set at EUR 1.7 bn and is projected to reach 4.5% of GDP, which is 0.4 p.p. of GDP less than what was estimated for 2010. Together with the revised budget for 2011, the government also adopted the state budget for 2012. State budget revenue for 2012 is estimated at EUR 8.7 bn, 4.4% more than in 2011, and state budget expenditure at EUR 10.1 bn, 1% more than in 2011. The state budget deficit will narrow by EUR 265 m in 2012, to EUR 1.4 bn. It will amount to 3.6% of GDP, being 0.9 p.p. of GDP smaller than in 2011. Absorption of EU funds from 2004 to 2009 According to data by the MF, Slovenia's net budgetary position towards the EU budget was positive in 2004-2006 and negative in 2007 and 2008. In 2009, it was positive again and improved further in 2010. The whole period was marked by relatively low realisation of planned receipts, 63.8% on average. In the period from 2004 through December 2010, Slovenia received EUR 2.8 bn from the EU budget instead of EUR 4.5 bn as planned and its net budgetary position amounted to EUR 501.3 m. In the first three years since Slovenia's accession to the EU, its positive net budgetary position towards the EU budget was mainly due to successful absorption of funds for the implementation of agricultural and structural policies and high lump-sum compensations to the state budget, while its payments to the EU budget were at the level planned. Slovenia had been a net recipient of EU funds in the amount of EUR 14.2 m in 2004 and closed the year 2005 with a surplus of EUR 16.8 m. In 2006, the year of the highest absorption (77.5%) relative to the level planned, Slovenia's net positive budgetary position totalled EUR 60.5 m. In 2007, Slovenia had a negative net budgetary position for the first time since accession, in the amount of EUR 8.6 m. The situation became even worse in 2008 when its net position was negative at EUR 64.6 m. The reasons for the worse-than-planned results (the negative net position) in 2007 and 2008 can be sought both on the side of payments into the EU budget, which were 12.2% and 14.0% higher, respectively, from what had been planned, and on the side of receipts, given the extremely low absorption from structural funds in both years relative to the levels planned. The same goes for absorption from cohesion funds in 2007 and absorption of funds for internal policies in 2008. The net position improved significantly in 2009 and Slovenia closed the year with a net surplus of EUR 155 m, largely as it successfully drew funds for agricultural and structural policies. Positive movements also continued in 2010, when Slovenia's net budgetary position was positive (EUR 326 m), according to the provisional data by the Figure 52: Slovenia's net budgetary position relative to the EU budget 350 -100 2004 2005 2006 2007 2008 2009 2010 Source: MF; calculations by IMAD. MF, and Slovenia recorded 70% absorption relative to the level planned. The relative success of EU funds utilisation in 2010 is mainly attributable to the absorption of funds for the implementation of agricultural and structural policies. In addition to the balance sheet of the Ministry of Finance, which served as the basis for our analysis, data on the utilisation of funds can also be obtained from the balance sheets of the EC. The MF and EC data differ for four reasons.20 To start with, besides payments registered in Slovenia's state budget, the EC figures also include funds paid directly to final beneficiaries (public institutions, municipalities, enterprises, sole proprietors, etc.) based on centralised EC calls for proposals, which are not considered as revenue of the RS budget and are hence not included in the MF balance sheets. Second, Slovenia receives inflows to dedicated sub-accounts of the treasury single account maintained with the BS, which do not appear in the state budget until they have been identified as revenue after successfully passing the eligibility check. Third, the EC system registers payments on the day when they are made, whereas in Slovenia, these funds may be identified as revenue at a later time; the EC system may thus consider the same payment as current year expenditure, and Slovenia's budget as revenue in the next year or later.21 And last, the differences are also due to how Slovenia's payments to the EU budget are booked. At the request of the Court of Audit, the Ministry of Finance started to record budget revenue and expenditure in full (gross) sums in 2008, meaning that the EC's debt to Slovenia (due to excess contributions called up by the EC) is now booked as revenue received from the EU budget and at the same time as expenditure 20 The MF figures are released in monthly and annual frequencies, while the EC publishes its figures in its Annual Reports. 21 Slovenia can draw EU funds within a three-year period after approval. Table 12: Planned and realised state budget receipts and payments and net budgetary position towards the EU budget Year Receipts (in EUR m) Payments (in EUR m) Net position Planned Realised Realisation, in % Planned Realised Realisation, in % 2004 335.3 183.8 54.8 187.9 170.0 90.2 13.8 2005 483.7 302.4 62.5 305.2 285.6 93.6 16.8 2006 449.6 348.4 77.5 315.0 287.9 91.4 60.5 2007 582.1 347.2 59.7 317.1 355.9 112.2 -8.6 2008 783.0 363.2 46.4 375.3 427.9 114.0 -64.6 2009 814.0 594.9 73.1 452.0 439.3 97.2 155.6 I-XI 2010 1.037.8 723.2 69.7 412.8 396.8 96.1 326.4 Total 4485.4 2863.1 63.8 2365.3 2363.4 99.9 500.3 Source: MF - EU Budget Cooperation Sector. Note: Data for 2004, 2005 and 2006 were given in SIT and converted into EUR at the exchange rate of 239.64 SIT for 1 EUR. under Slovenia's payments to the EU budget (concurrent increases in revenue and expenditure by equal amounts). For all these reasons, the MF and EC figures for Slovenia's receipts in the period of 2004-2009 differ by EUR 377 m.22 We estimate that the difference is mainly due to direct payments to final beneficiaries, but also to the process of EU funds utilisation at the national level, which is still fairly complicated, despite improvements. The procedure of the preparation of documentation for refunds often causes delays in EU payments into Slovenia's budget. It may happen that even though a project has been completed and handed over to users, EU funds allocated for financing the project may wait in a sub-account of the BS and are not recorded as state budget revenue, as the cost certification procedure has yet to be carried out. The new financial perspective effective since 2007 changed the definition of individual items in the EC balance sheet, while in the MF balance sheet the previous definition has been partly retained, because Slovenia is still able to draw funds according to the previous items. The EC joined cohesion and structural policy funds23 in the Cohesion category, introducing a new Competitiveness for Growth and Employment component,24 which mainly covers direct payments to beneficiaries that are not registered in the RS budget.25 The change in the EU definition had no major impact on the dynamics and the overall success of absorption, which varies substantially by individual items. In 2004-2006, pre-accession funds and compensations had accounted for a much greater share of total allocated funds than from 2007 onwards when compensations declined or were no longer paid, given that most of them were lump-sum payments intended for strengthening the cash flow and for budgetary compensation, which is standard EU policy aimed at helping new EU Member States to keep a balanced state budget in the first years after accession. In the EU balance, the category of internal policies is, in the new perspective, placed under the headings Competitiveness for Growth and Employment, and Freedom, Security and Justice. Given that Slovenia continues to draw funds for internal policies, the MF has retained the category of internal policies as part of the funds received from the EU budget for the implementation of certified and other EU programmes. In 2007, the bulk of funds from these sources were used to meet Slovenia's obligations related to the establishment of the Schengen Table 13: Absorption of funds by items and comparison of MF and EC balances (in EUR m) 2004 2005 2006 2007 2008 2009 Total Difference between EC and MF (in EUR m) Share in % EC MF EC MF EC MF EC MF EC MF EC MF EC MF EC MF Pre-acces-sion funds 39.1 45.3 43.6 47.2 7.9 25.7 0 10.2 0 5.9 0 15.6 90.6 149.9 59.3 3.6 7.0 Common Agricultural Policy 49.4 22.9 102.6 111.6 159.9 135.9 179.5 150.5 143 208 190.8 220.3 825.2 849.2 24.0 32.8 39.7 Structural funds 24.4 0 53.5 35.9 91 85.4 0 56.8 0 51.1 0 211 168.9 440.2 271.3 6.7 20.6 Cohesion Funds 0 0 0 7.69 0 21.05 158.9 30.7 234.6 72.6 368.3 104.8 761.8 236.8 -525.0 30.3 11.1 Internal policies 57.9 0 65.8 6.2 78.5 20.5 27.4 94.3 44.6 4.4 25.5 7.8 299.7 133.2 -166.5 11.9 6.2 Compensations 105.1 112 93.8 91 61 55.8 0 0 0 0 0 0 259.9 258.8 -1.1 10.3 12.1 Other 6.1 3.6 6.8 2.81 7.8 4.1 24.2 4.6 34.2 21.2 31.7 35.4 110.8 71.71 -39.1 4.4 3.4 Total 282 183.8 366.1 302.4 406.1 348.4 390.1 347.2 456.4 363.2 616.3 594.9 2,517 2,140 -377.1 100.0 100.0 Source: Source: MF - EU Budget Cooperation Sector, EU Budget, Financial Report 2009. 22 The EC Annual Report 2010 will be released in the middle of 2011. 23 Previously referred to as "structural actions". 24 Competitiveness for Growth and Employment. 25 Previously referred to as "internal policies". border, even though this is not a typical expenditure for internal policies.26 The absorption of funds for internal policies has been decreasing significantly since 2007, in the absence of expenditure on the Schengen border and with R&D funds to be drawn under the Competitiveness for Growth and Employment heading in the future. The absorption of structural and cohesion policy funds only started to strengthen in 2006. In the entire period, these funds have accounted for just below 40% of total receipts from the EU budget. The proportion of the actually absorbed structural funds relative to the levels planned varies substantially across years (the average absorption rate is 45.1%); the fluctuation of cohesion policy funds is less pronounced and the absorption has even started to improve gradually compared with what was planned (the average absorption rate is 57%). The average share of funds under the common agricultural and fisheries policies in the analysed period totals 37.3 of total receipts from the EU budget. According to MF data, the receipts under these policies have the highest rate of absorption (86.6%) compared with budgetary plans. Figure 53: Planned and realised receipts in Slovenia's state budget 1200 1000 800 ii^ 600 -Planned receipts -Realised receipts 2004 2005 2006 2007 2008 2009 2010 Source: MF; calculations by IM AD. Payments from Slovenia's state budget into the EU budget tend to be much more consistent with plans in the budget preparation phase than receipts, with the exception of payments in 2007and2008. Every year, the greatest share of payments comes from GNI-based contributions, which, on average, account for around two thirds of all payments in a year. Just over 90% of payments were realised in 20042006 and 2009; the realisation in 2007 and 2008 was more than 10% higher than expected, which also contributed significantly to Slovenia's worse-than-planned net position in those two years. In 2007, Slovenia paid EUR 355.9 m into the EU budget, 12.2% more than planned. Broken down by items, customs duties and payments from value added tax exceeded the expectations the most (237% and 111% of planned funds, respectively). Slovenia's payments in 2008 were 14.0% higher than planned, largely because the EC called up additional GDI-based and VAT-based contributions at the end of the year as a result of new estimates of Slovenia's main aggregates in 2004-2007. In 2009, payments into the EU budget were once again in line with budgetary planning, as they were also this year. Figure 54: Planned and realised payments from Slovenia's state budget to the EU budget 500 -Planned payments -Realised payments 300 250 200 150 2004 2005 2006 2007 2008 2009 Source: MF; calculations by IMAD. 2010 26 The typical expenditure under this heading is funding for R&D, most frequently paid directly to beneficiaries. 0 X "O C o a a (U "5 u (U MAIN INDICATORS 2005 2006 2007 2008 2009 2010 2011 2012 Autumn forecast 2010 forecast forecast forecast GDP (real growth rates, in %) 4.5 5.9 6.9 3.7 -8.1 0.9 2.5 3.1 GDP in EUR million (current prices and current exchange rate) 28,750 31,055 34,568 37,305 35,384 35,792 37,227 39,033 GDP per capita, in EUR (current prices and current exchange rate) 14,369 15,467 17,123 18,450 17,331 17,575 18,240 19,087 GDP per capita (PPS)1 19,700 20,700 22,100 22,800 20,300 GDP per capita (PPS EU27=100)' 87 88 89 91 86 Gross national income (current prices and current fiksni exchange rate) 28,506 30,682 33,834 36,289 34,704 35,256 36,552 38,223 Gross national disposable income (current prices and current fiksni exchange rate) 28,362 30,467 33,607 35,914 34,448 35,220 36,525 38,183 Rate of registered unemployment 10.2 9.4 7.7 6.7 9.1 10.7 11.0 10.6 Standardised rate of unemployment (ILO) 6.5 6.0 4.9 4.4 5.9 7.2 7.1 6.9 Labour productivity (GDP per employee) 4.7 4.3 3.8 0.9 -6.4 3.2 2.9 3.0 Inflation,2 year average 2.5 2.5 3.6 5.7 0.9 2.1 2.7 2.2 Inflation,2 end of the year 2.3 2.8 5.6 2.1 1.8 2.8 2.2 2.3 INTERNATIONAL TRADE - BALANCE OF PAYMENTS STATISTICS Exports of goods and services3 (real growth rates, in %) 10.6 12.5 13.7 3.3 -17.7 7.0 5.9 7.0 Exports of goods 10.3 13.4 13.9 0.6 -18.1 8.7 5.9 7.2 Exports of services 12.0 8.6 13.2 16.2 -16.1 0.6 5.5 6.0 Imports of goods and services3 (real growth rates, in %) 6.6 12.2 16.7 3.8 -19.7 5.6 4.5 5.9 Imports of goods 6.8 12.7 16.2 3.1 -20.9 6.2 4.4 5.8 Imports of services 5.5 8.8 19.7 8.7 -12.3 2.8 5.6 6.6 Current account balance, in EUR million -498 -771 -1646 -2489 -526 -330 -386 -427 As a per cent share relative to GDP -1.7 -2.5 -4.8 -6.7 -1.5 -0.9 -1.0 -1.1 Gross external debt, in EUR million 20,496 24,067 34,752 38,997 40,008 42,0595- As a per cent share relative to GDP 71.3 77.5 100.5 104.5 113.1 Ratio of USD to EUR 1.244 1.254 1.371 1.471 1.393 1.310 1.294 1.294 DOMESTIC DEMAND - NATIONAL ACCOUNTS STATISTICS Private consumption (real growth rates, in %) 2.6 2.9 6.7 2.9 -0.8 -0.5 1.0 2.0 As a % of GDP4 54.2 52.8 52.7 53.0 55.4 55.6 55.5 55.1 Government consumption (real growth rates, in %) 3.4 4.0 0.7 6.2 3.0 0.7 -0.8 1.4 As a % of GDP4 19.0 18.8 17.3 18.1 20.3 20.4 19.7 19.5 Gross fixed capital formation (real growth rates, in %) 3.7 10.1 12.8 8.5 -21.6 -3.5 4.0 4.3 As a % of GDP4 25.5 26.5 27.7 28.8 23.9 23.0 23.3 23.7 Sources of data: SORS, BS, Eurostat-New Cronos (revised data, September 2010), estimate, calculations and forecasts by IMAD (Autumn Report, September 2010). Notes: 'Measured in purchasing power standard; ^Consumer price index; ^Balance 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 October 2010; PRODUCTION 2007 2008 2009 2008 2009 2010 2008 2009 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 10 11 12 1 2 INDUSTRIAL PRODUCTION, y-o-y growth rates, % Industry B+C+D 7.2 2.5 -17.4 3.3 -7.7 -18.2 -24.6 -18.4 -7.1 -0.3 11.2 8.1 0.5 -11.7 -13.2 -17.1 -21.5 B Mining and quarrying 5.5 5.5 -2.9 7.1 -1.2 -6.7 -13.7 6.1 4.8 -8.2 14.1 26.4 -1.0 -14.7 18.8 -6.9 -3.8 C Manufacturing 8.5 2.6 -18.7 3.7 -8.4 -20.0 -25.9 -19.5 -7.9 0.2 12.1 8.1 0.8 -12.5 -15.4 -18.9 -23.8 D Electricity, gas & steam supply1 -11.1 2.1 -6.6 -1.1 4.5 -3.1 -8.6 -9.7 -5.5 -2.8 -0.4 3.5 1.0 4.7 7.5 -5.1 -1.3 CONSTRUCTION,2 real indices of construction put in place, y-o-y growth rates, % Construction, total 18.5 15.7 -21.0 15.7 4.2 -19.2 -19.0 -24.5 -20.5 -18.9 -16.8 -16.3 15.1 -2.3 -3.6 -26.9 -22.7 Buildings 14.3 11.5 -22.5 11.5 -2.0 -20.8 -21.8 -27.4 -19.6 -7.4 -12.4 -16.3 12.0 -11.5 -6.9 -32.7 -17.3 Civil engineering 21.9 18.9 -19.9 18.6 8.9 -17.6 -17.2 -22.6 -21.1 -29.3 -19.6 -16.2 17.0 5.4 -0.6 -20.3 -27.5 TRANSPORT, tonne-km in m, y-o-y growth rates, % Tonne-km in road transport 13.4 18.4 -9.2 7.7 17.2 -12.7 -7.6 -12.3 -4.7 19.8 10.7 - - - Tonne-km in rail transport 6.8 -2.3 -24.2 2.9 -3.6 -24.1 -26.0 -30.7 -15.9 18.8 33.9 - - - Distributive trades, y-o-y growth rates, % Total real turnover* 9.7 10.1 -13.0 10.5 2.3 -10.1 -15.5 -16.0 -10.0 -1.4 5.1 4.9 2.8 1.0 3.1 -6.2 -15.5 Real turnover in retail trade 6.1 12.2 -10.6 12.7 7.2 -5.5 -11.3 -13.8 -11.1 -4.7 0.7 2.4 7.3 7.0 7.1 2.3 -13.3 Real turnover in the sale and maintenance of motor vehicles 19.2 6.2 -21.7 5.6 -9.9 -24.0 -28.0 -23.6 -8.1 6.3 15.3 11.1 -7.4 -12.5 -10.1 -27.6 -24.5 Nominal turnover in wholesale trade & commission trade 16.1 17.1 -21.4 20.9 4.8 -16.4 -23.9 -26.7 -18.1 -7.9 3.9 7.6 11.6 2.1 0.5 -16.9 -19.2 TOURISM, y-o-y growth rates, %, new methodology from 2009 onwards Total, overnight stays 7.0 1.8 -3.4 1.8 0.6 -3.5 -4.6 -1.8 -5.3 -0.4 -2.4 -2.2 8.9 3.4 12.3 2.7 -5.7 Domestic tourists, overnight stays 4.9 5.2 2.8 4.7 7.2 4.3 1.2 6.7 -4.0 1.3 -3.0 -9.6 17.5 12.3 15.6 77 -1.0 Foreign tourists, overnight stays 8.4 -0.5 -8.0 0.1 -4.8 -10.6 -8.6 -7.1 -6.4 -2.1 -2.0 3.2 3.2 -4.1 9.1 -0.7 -12.2 Nominal turnover in hotels and restaurants 9.7 6.7 -7.8 7.0 3.9 -3.9 -8.2 -8.0 -11.0 0.0 1.5 4.2 8.5 4.1 -0.6 -1.4 -6.7 AGRICULTURE, y-o-y growth rates, % Purchase of agricultural products, SIT bn, since 2007 in EUR m 492.2 529.9 449.3 134.1 152.3 105.4 105.9 109.0 129.0 94.6 106.7 115.6 49.0 45.3 58.1 32.9 32.6 BUSSINES TENDENCY (indicator values««) Sentiment indicator 14 3 -22 7 -15 -31 -28 -18 -13 -12 -9 -6 -5 -17 -24 -31 -31 Confidence indicator - in manufacturing 11 -5 -23 -3 -27 -35 -27 -19 -13 -7 0 3 -21 -28 -32 -37 -33 - in construction 19 2 -50 3 -21 -43 -51 -54 -51 -57 -59 -56 -7 -21 -35 -39 -40 - in services 29 27 -14 30 7 -19 -24 -10 -2 0 -5 -2 20 6 -6 -15 -16 - in retail trade 27 22 -13 25 8 -17 -17 -9 -7 -6 11 12 26 1 -3 -14 -16 Consumer confidence indicator -11 -20 -30 -16 -29 -39 -31 -23 -25 -25 -22 -27 -18 -34 -35 -43 -37 Source of data: SORS. Notes: 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. 2009 2010 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 -15.9 -29.8 -22.2 -21.6 -20.8 -17.5 -16.8 -19.6 -1.7 4.7 -8.8 -1.2 8.3 9.1 14.3 10.2 6.9 13.5 4.9 6.0 -9.2 -21.7 -10.2 -7.9 4.5 13.3 1.8 -4.3 32.4 -14.8 -7.2 -18.0 0.2 10.7 20.9 10.6 18.5 39.6 22.5 24.5 -17.3 -31.6 -23.6 -22.5 -22.1 -19.4 -17.2 -20.8 -2.6 5.2 -8.8 -0.7 9.2 10.3 15.1 11.0 7.6 14.5 3.7 5.8 - - -2.7 -9.5 -4.7 -11.3 -9.6 -7.3 -11.9 -5.6 -4.6 -6.3 -7.7 -2.0 1.9 -2.1 3.1 -2.2 -3.6 1.1 13.6 2.2 - - -9.7 -20.4 -20.8 -15.9 -20.8 -19.5 -32.0 -28.3 -18.3 -9.5 -11.3 -24.2 -19.8 -17.9 -15.5 -17.2 -17.4 -13.0 -18.7 -17.6 -12.7 -18.0 -23.5 -23.4 -23.2 -26.8 -31.4 -28.2 -20.0 -7.4 -6.6 -10.2 -5.5 -13.7 -7.5 -15.8 -11.2 -17.8 -20.3 -16.3 -7.3 -22.0 -19.1 -10.7 -19.4 -14.1 -32.3 -28.4 -17.2 -11.3 -15.9 -38.5 -30.8 -20.6 -20.3 -18.0 -21.0 -10.0 -17.6 -18.3 - - - - - - - - - - - - - - - - - - - - - - - - - -8.6 -16.7 -17.1 -12.6 -14.8 -15.1 -18.2 -13.0 -11.1 -5.9 -4.8 -3.6 4.3 3.4 4.4 7.5 2.6 5.2 6.9 4.1 -5.2 -9.3 -14.9 -9.5 -11.5 -13.3 -16.7 -12.9 -13.5 -7.0 -8.5 -5.2 -0.3 -1.3 -0.6 3.9 2.1 1.5 3.6 1.7 3.5 -20.4 -34.7 -25.7 -23.1 -25.6 -20.6 -24.6 -16.0 -7.2 -1.2 5.2 -0.4 14.1 14.4 15.9 15.5 3.5 15.4 14.4 9.6 16.9 -13.2 -24.9 -25.3 -21.2 -27.5 -24.8 -27.6 -23.4 -19.0 -11.1 -10.8 -13.1 -0.9 -3.4 4.7 10.6 2.9 7.8 5.7 0.8 - - -7.0 2.4 -11.9 -2.7 -3.4 0.8 -3.9 -2.9 -7.2 -6.5 1.0 -2.1 0.1 -1.7 -3.0 -2.5 -1.7 -3.6 -0.3 2.5 -1.0 8.9 3.3 -2.8 2.9 8.9 6.8 2.1 1.9 -5.1 -9.2 3.5 -0.1 1.1 2.1 -7.2 -3.3 -9.0 -11.1 -7.9 -3.0 0.0 - -19.3 1.7 -17.4 -6.7 -11.7 -3.0 -7.3 -6.5 -9.3 -3.7 -0.9 -5.2 -1.0 -4.6 -0.1 -1.8 4.3 1.6 4.4 7.0 -1.0 - -3.7 -6.1 -9.3 -9.2 -7.8 -5.9 -10.3 -11.2 -11.6 -10.3 0.5 -1.5 1.1 -1.5 2.4 3.6 5.7 4.5 2.5 7.2 - - 39.9 36.3 35.5 34.1 35.9 33.8 39.2 43.4 38.4 47.2 29.7 28.6 36.4 35.5 36.0 35.1 37.4 36.2 42.1 45.7 -33 -34 -25 -24 -21 -19 -13 -13 -14 -13 -10 -11 -15 -12 -8 -6 -5 -7 -7 -8 -8 -8 -34 -32 -27 -22 -23 -20 -14 -16 -12 -11 -6 -8 -6 -2 -1 2 6 1 1 2 -2 -1 -49 -53 -46 -53 -49 -59 -55 -56 -47 -49 -55 -55 -61 -62 -57 -59 -60 -57 -51 -51 -53 -56 -25 -27 -22 -22 -13 -12 -6 2 -5 -2 6 3 -10 -8 -4 -3 -1 -3 -3 -7 -2 -1 -20 -16 -18 -18 -16 -6 -6 -7 -7 -6 -8 -6 -5 9 10 13 10 14 12 13 10 12 -37 -41 -29 -24 -25 -27 -16 -26 -24 -26 -26 -24 -26 -24 -22 -21 -27 -28 -26 -26 -24 -26 LABOUR MARKET 2007 2008 2009 2008 2009 2010 2008 2009 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 11 12 1 FORMAL LABOUR FORCE (A=B+E) 925.3 942.5 944.5 942.2 949.2 945.9 945.6 942.6 943.9 935.8 937.8 933.8 950.3 946.5 946.2 PERSONS IN FORMAL EMPLOYMENT (B=C+D)' 854.0 879.3 858.2 881.7 885.1 869.0 861.0 854.3 848.4 836.3 839.2 835.4 886.9 880.3 872.2 In agriculture, forestry, fishing 40.4 39.7 37.9 39.2 38.9 37.8 38.0 37.9 37.8 31.9 34.6 34.0 38.9 38.8 37.8 In industry, construction 321.9 330.4 306.9 333.0 330.4 317.4 309.3 304.0 296.8 290.9 289.2 287.0 331.5 325.9 320.1 Of which: in manufacturing 223.6 222.4 199.8 222.3 219.1 209.5 201.4 196.7 191.7 190.0 189.4 188.1 219.8 216.3 211.8 in construction 78.4 87.9 86.8 90.5 91.1 87.8 87.6 86.9 84.8 80.9 79.6 78.6 91.5 89.5 88.3 In services 491.6 509.1 513.4 509.4 515.9 513.8 513.7 512.4 513.7 513.5 515.3 514.3 516.5 515.6 514.4 Of which: in public administration 50.3 51.0 51.5 51.1 51.0 51.1 51.5 51.7 51.6 51.8 52.3 52.1 51.1 50.8 51.2 in education, health-services, social work 108.8 111.1 113.8 110.1 112.4 113.2 114.1 113.3 114.7 115.9 116.8 116.3 112.5 112.6 112.8 FORMALLY EMPLOYED (C)1 766.0 789.9 767.4 792.7 795.3 779.7 770.8 762.9 756.1 750.1 751.0 747.0 797.0 790.2 783.0 In enterprises and organisations 696.1 717.6 699.4 719.8 722.0 709.9 701.9 695.5 690.5 687.2 688.7 685.7 723.4 718.1 712.6 By those self-employed 69.9 72.3 67.9 73.0 73.2 69.8 68.8 67.4 65.7 62.9 62.3 61.4 73.5 72.2 70.4 SELF-EMPLOYED AND FARMERS (D) 87.9 89.4 90.8 88.9 89.8 89.3 90.3 91.4 92.2 86.2 88.1 88.3 89.9 90.0 89.2 REGISTERED UNEMPLOYMENT (E) 71.3 63.2 86.4 60.5 64.1 76.9 84.6 88.3 95.6 99.4 98.6 98.4 63.4 66.2 73.9 Female 39.1 33.4 42.4 32.1 33.0 38.4 41.6 43.2 46.4 47.0 46.8 47.8 32.6 33.7 37.2 By age: under 26 11.9 9.1 13.3 7.7 10.0 12.2 13.1 12.8 15.2 14.7 13.5 12.4 9.9 10.2 11.7 aged over 50 22.2 21.9 26.2 21.7 21.6 24.1 25.6 26.9 28.3 29.6 30.3 31.1 21.5 21.9 23.6 Unskilled 28.0 25.4 34.1 24.3 25.8 31.2 33.6 34.8 36.6 38.2 37.1 36.6 25.5 27.0 30.1 For more than 1 year 36.5 32.3 31.5 31.9 31.0 31.0 30.4 31.1 33.4 38.1 41.8 44.0 30.9 30.8 31.2 Those receiving benefits 16.6 14.4 27.4 13.9 15.1 22.8 27.4 28.6 30.8 31.6 29.3 29.3 14.4 16.8 20.9 RATE OF REGISTERED UNEMPLOYMENT, E/A, in % 7.7 6.7 9.1 6.4 6.8 8.1 8.9 9.4 10.1 10.6 10.5 10.5 6.7 7.0 7.8 Male 6.2 5.6 8.3 5.4 5.8 7.3 8.1 8.5 9.3 10.1 9.9 9.7 5.7 6.1 6.9 Female 9.6 8.1 10.2 7.8 7.9 9.2 10.0 10.4 11.1 11.3 11.3 11.5 7.9 8.1 9.0 FLOWS OF FORMAL LABOUR FORCE 21.5 13.7 -5.2 1.9 1.9 -0.8 -0.1 -3.5 -0.8 -5.5 1.7 -3.4 -0.5 -3.8 -0.3 New unemployed first-job seekers 14.7 12.5 17.0 1.9 6.5 3.2 2.6 3.0 8.1 2.9 2.4 2.8 1.2 0.8 1.2 Redundancies 52.5 53.0 90.5 12.5 17.4 24.8 22.5 19.9 23.2 19.9 16.6 18.5 5.5 6.6 10.4 Registered unemployed who found employment 49.1 41.7 48.6 9.9 9.6 9.5 11.8 14.2 13.1 14.2 12.8 15.5 3.2 2.4 3.2 Other outflows from unemployment (net) 28.0 26.1 28.5 5.9 7.4 5.2 6.5 6.9 9.9 6.3 6.9 6.0 2.7 2.2 0.7 Increase in number of work permits for foreigners 10.1 13.2 -9.6 4.9 -1.2 -1.5 -1.8 -2.7 -3.6 -1.6 -1.0 -0.5 -0.4 -0.7 -0.6 Retirements2 20.7 22.4 24.5 6.3 6.1 5.3 5.2 6.7 7.3 6.7 5.9 6.6 2.0 1.8 2.2 Others who found employment2 40.7 31.4 34.4 5.9 8.7 6.8 9.5 8.2 10.0 4.7 11.5 5.1 3.0 -0.3 1.7 REGISTERED VACANCIES3 242.9 240.5 161.3 64.6 47.7 40.1 40.3 41.9 39.0 37.9 44.3 45.9 15.7 12.3 13.7 For a fixed term, in % 76.5 74.5 78.1 76.5 74.7 74.9 77.9 80.8 78.6 78.9 81.2 82.2 75.6 73.1 72.0 WORK PERMITS FOR FOREIGNERS 60.2 81.1 86.6 86.3 90.5 91.5 90.2 84.9 79.7 77.1 75.7 74.9 90.4 90.7 90.7 As % of labour force 6.5 8.6 9.2 9.2 9.5 9.7 9.5 9.0 8.4 8.2 8.1 8.0 9.5 9.6 9.6 NEW JOBS 160.0 162.7 111.4 42.7 38.1 27.5 27.3 28.2 28.3 23.6 25.1 27.9 11.4 8.9 10.2 Sources of data: SORS, PDII, ESS. Notes: 1In January 2005, the SORS adopted new methodology of obtaining data on persons in paid employment. The new source of data for employed and self-employed persons excluding farmers is the Statistical Register of Employment (SRE), while data on farmers are forecast using the ARIMA model based on quarterly figures for farmers from the Labour Force Survey. Data for previous years dating back to January 2000 have also been calculated according to the new methodology. ^Estimated by IMAD, based on data by pDiI and ESS; 3according to ESS. 2009 2010 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 945.9 945.7 946.1 945.3 945.6 944.1 941.6 942.1 945.0 945.5 941.3 935.7 935.8 935.8 938.6 937.3 937.5 934.3 933.0 934.1 938.2 868.7 866.0 863.2 860.8 859.1 855.6 853.5 853.8 850.4 850.0 844.7 836.1 836.0 836.9 839.3 838.9 839.3 835.9 834.0 836.2 835.5 37.8 37.8 38.0 38.0 38.0 37.9 37.9 37.9 37.9 37.8 37.7 31.9 31.9 31.9 34.6 34.6 34.7 34.1 34.0 34.0 33.3 317.4 314.7 311.8 309.1 307.1 305.3 303.9 302.8 298.8 297.6 294.0 291.5 290.6 290.7 289.9 289.2 288.6 287.9 286.5 286.6 285.8 209.6 207.0 203.6 201.2 199.2 197.8 196.5 195.9 192.5 192.1 190.6 190.0 189.9 190.0 189.7 189.4 189.0 188.5 187.7 188.1 188.4 87.7 87.5 87.8 87.5 87.5 87.2 86.9 86.5 86.0 85.2 83.3 81.5 80.7 80.5 80.1 79.5 79.3 79.1 78.6 78.2 77.1 513.6 513.5 513.5 513.7 514.0 512.4 511.7 513.1 513.7 514.6 512.9 512.6 513.5 514.4 514.7 515.1 516.1 514.0 513.4 515.7 516.4 51.0 51.3 51.4 51.5 51.6 51.7 51.7 51.8 51.6 51.7 51.6 51.6 51.8 52.0 52.3 52.3 52.4 52.2 52.1 52.1 52.0 113.2 113.7 114.0 114.2 114.1 113.0 112.6 114.2 114.6 114.9 114.7 115.4 115.9 116.4 116.7 116.8 116.9 115.8 115.6 117.5 117.9 779.5 776.6 773.3 770.5 768.5 764.5 762.1 762.1 758.3 757.7 752.4 749.7 749.8 750.9 750.9 750.8 751.3 748.1 745.7 747.3 746.8 709.7 707.3 704.3 701.7 699.8 696.5 694.6 695.2 691.8 691.8 687.8 686.4 686.9 688.3 688.5 688.6 689.1 686.3 684.4 686.4 686.2 69.7 69.3 69.0 68.8 68.7 68.0 67.5 66.8 66.5 65.9 64.6 63.3 62.8 62.7 62.4 62.2 62.1 61.8 61.3 61.0 60.5 89.3 89.5 90.0 90.3 90.6 91.1 91.4 91.7 92.1 92.3 92.2 86.4 86.3 86.0 88.4 88.0 88.1 87.8 88.3 88.9 88.8 77.2 79.7 82.8 84.5 86.5 88.5 88.1 88.4 94.6 95.4 96.7 99.6 99.8 98.9 99.3 98.4 98.2 98.4 99.0 97.9 102.7 38.5 39.5 40.8 41.5 42.5 43.5 43.2 43.0 46.3 46.5 46.5 47.2 47.0 46.6 47.0 46.7 46.8 47.5 48.1 47.7 49.8 12.3 12.7 13.2 13.1 13.0 13.0 13.0 12.2 15.5 15.1 14.8 15.0 14.7 14.3 14.1 13.4 13.0 12.6 12.5 12.2 15.7 24.1 24.5 25.1 25.7 26.1 26.6 26.8 27.1 27.8 28.3 28.7 29.5 29.7 29.7 30.1 30.3 30.5 30.9 31.1 31.3 31.7 31.4 32.2 33.0 33.5 34.2 34.7 34.7 35.0 36.1 36.4 37.2 38.3 38.4 37.9 37.6 37.1 36.7 36.4 36.6 36.7 37.2 31.0 30.7 30.4 30.3 30.5 30.7 31.0 31.7 32.5 33.3 34.4 36.9 37.9 39.4 40.6 41.8 42.9 43.2 44.1 44.6 46.7 22.8 24.5 25.9 27.6 28.7 28.9 28.5 28.3 30.8 30.3 31.2 32.2 31.7 30.9 29.9 29.2 28.9 29.0 29.4 29.4 28.2 8.2 8.4 8.8 8.9 9.1 9.4 9.4 9.4 10.0 10.1 10.3 10.6 10.7 10.6 10.6 10.5 10.5 10.5 10.6 10.5 10.9 7.3 7.6 7.9 8.1 8.3 8.5 8.5 8.6 9.1 9.3 9.6 10.0 10.1 10.0 10.0 9.9 9.8 9.8 9.8 9.7 10.1 9.3 9.5 9.8 10.0 10.2 10.5 10.4 10.4 11.1 11.2 11.2 11.4 11.3 11.2 11.3 11.2 11.3 11.5 11.6 11.5 12.0 -0.2 -0.2 0.3 -0.7 0.3 -1.5 -2.5 0.6 2.9 0.4 -4.1 -5.7 0.2 0.0 2.8 -1.3 0.2 -3.2 -1.3 1.1 4.1 1.0 1.1 1.1 0.8 0.8 0.8 0.7 1.5 5.9 1.3 0.9 1.0 0.8 1.0 0.9 0.7 0.8 0.7 0.8 1.4 6.3 6.9 7.5 8.2 7.4 7.0 7.3 5.5 7.2 8.5 7.9 6.8 8.6 5.4 5.8 5.7 5.5 5.4 6.1 5.7 6.7 7.1 2.7 3.6 3.7 4.3 3.9 4.0 4.6 5.5 4.4 4.8 3.9 5.0 4.0 5.1 3.9 4.7 4.2 4.8 4.0 6.8 4.8 1.9 2.5 2.4 2.2 1.9 2.1 1.9 2.8 3.8 3.6 2.5 1.7 2.0 2.6 2.4 2.4 2.1 1.8 1.8 2.4 3.8 -0.3 -0.6 -0.3 -0.5 -0.9 -0.9 -0.8 -1.0 -1.4 -0.9 -1.3 -0.6 -0.3 -0.7 -0.2 -0.4 -0.4 -0.3 -0.1 -0.1 -0.4 1.6 1.5 1.9 1.7 1.7 1.4 2.4 2.9 2.9 2.3 2.1 2.5 2.2 2.0 2.2 2.1 1.6 1.7 2.1 2.9 2.5 2.2 2.9 3.5 2.5 3.5 1.5 1.3 5.3 4.5 5.2 0.3 -2.4 3.5 3.7 6.1 2.3 3.1 -0.6 1.3 4.4 3.6 12.2 14.2 12.0 13.9 14.5 14.7 12.3 14.9 15.7 11.7 11.6 12.7 11.7 13.5 14.5 13.7 16.1 15.2 14.9 15.8 17.4 75.0 77.5 77.2 77.8 78.7 80.0 82.0 80.7 78.2 80.1 77.7 77.2 79.9 79.7 82.2 81.8 79.8 81.1 83.0 82.6 81.4 91.2 92.6 92.1 90.6 87.8 86.6 84.7 83.4 81.1 79.6 78.4 77.6 77.2 76.5 76.3 75.6 75.3 74.7 74.9 75.1 74.9 9.6 9.8 9.7 9.6 9.3 9.2 9.0 8.9 8.6 8.4 8.3 8.3 8.2 8.2 8.1 8.1 8.0 8.0 8.0 8.0 8.0 8.1 9.3 10.0 8.8 8.5 8.7 6.8 12.6 11.9 8.9 7.6 8.9 7.0 7.7 8.9 7.8 8.4 8.2 6.6 13.0 10.9 WAGES AND INDICATORS OF OVERALL COMPETITIVENESS 2007 2008 2009 2008 2009 2010 2008 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 7 8 9 10 11 GROSS WAGE PER EMPLOYEE, y-o-y growth rates, % Activity - Total 5.9 8.3 3.4 9.9 7.1 5.5 4.6 2.3 1.7 3.7 4.3 4.2 8.7 9.8 11.2 9.2 3.9 A Agriculture, forestry and fishing 8.3 9.1 -0.2 10.8 6.7 1.2 1.6 -0.5 -2.9 3.3 5.2 7.4 13.5 6.3 12.9 11.3 -0.1 B Mining and quarrying 6.4 13.4 0.9 16.0 14.8 5.6 2.4 1.6 -4.9 3.4 4.7 1.9 17.3 10.0 20.7 39.0 -4.7 C Manufacturing 7.0 7.5 0.8 9.3 3.4 0.0 -0.5 0.4 3.7 10.1 10.0 8.7 11.0 6.4 10.8 6.7 -1.4 D Electricity, gas, steam and air conditioning supply 6.2 9.5 3.8 9.8 8.8 7.9 7.8 5.1 -3.2 4.7 2.4 3.6 15.3 8.3 6.2 25.2 2.2 E Water supply sewerage, waste management and remediation activities 7.1 7.8 2.0 9.0 5.2 4.2 3.2 1.2 0.1 2.7 3.0 2.0 10.5 5.5 11.3 14.0 -1.0 F Constrution 6.6 7.5 1.0 9.1 4.3 1.2 1.0 1.6 0.9 2.9 5.8 4.1 10.0 6.0 11.3 7.3 -1.0 G Wholesale and retail trade, repair of motor vehicles and motorcycles 7.6 7.7 1.9 8.8 6.1 4.4 2.3 1.2 0.1 2.6 4.1 4.3 9.1 7.0 10.2 8.0 3.9 H Transportation and storage 6.0 8.4 0.7 10.4 6.6 2.3 2.1 0.5 -1.4 1.1 1.2 2.5 7.8 13.1 10.2 7.1 7.5 I Accommodation and food service activities 5.3 8.3 1.6 10.0 4.9 3.4 1.7 0.6 1.0 2.8 4.2 4.5 10.3 9.0 10.7 7.5 2.0 J Information and communication 5.7 7.3 1.4 8.7 6.2 3.7 3.1 0.8 -1.6 1.0 2.5 3.4 7.9 8.1 10.3 7.8 5.5 K Financial and insurance activities 7.4 6.0 -0.7 8.2 0.0 2.0 -3.8 0.3 -0.5 1.2 3.2 2.6 7.1 6.3 11.4 1.2 -6.3 L Real estate activities 7.0 6.0 1.9 5.3 3.6 1.6 0.0 1.8 4.5 2.6 5.3 2.9 4.7 4.6 6.7 4.5 1.5 M Professional, scientific and technical activities 7.0 8.4 2.1 9.1 6.4 4.0 3.3 1.5 0.0 1.6 1.8 2.3 9.9 7.3 10.3 9.3 1.8 N Administrative and support service activities 7.5 9.6 1.8 10.2 8.0 6.6 2.1 -0.2 -0.6 2.5 4.3 4.6 11.1 8.3 11.2 8.4 8.6 O Public administration and defence, compulsory social security 5.1 12.2 5.9 13.2 13.7 11.5 9.8 2.5 0.5 -1.9 -1.1 0.4 7.6 18.8 13.3 12.9 16.0 P Education 3.9 7.0 3.6 7.7 9.0 6.9 6.1 1.2 0.6 0.2 0.7 1.0 5.0 10.9 7.3 8.0 9.4 Q Human health and social work activities 3.1 12.0 12.0 16.8 21.0 21.4 22.6 5.5 1.4 -0.4 -1.0 0.3 4.6 24.5 21.5 21.3 20.5 R Arts, entertainment and recreation 3.6 5.3 3.9 8.3 5.1 7.0 5.7 2.2 0.9 0.7 1.4 1.2 4.1 11.3 9.4 10.7 -3.2 S Other service activities 3.3 8.2 1.3 8.5 8.8 4.1 1.0 0.7 0.0 3.2 4.9 5.5 9.0 8.0 8.3 9.0 6.3 INDICATORS OF OVERALL COMPETITIVENESS, y-o-y growth rates, % Effective exchange rate,1 nominal 0.8 0.5 0.4 0.4 -1.1 -0.3 -0.3 0.3 1.8 -0.3 -1.9 -2.3 0.8 0.6 -0.1 -1.3 -1.7 Real (relative consumer prices) 2.3 2.8 0.7 2.6 -0.1 0.4 0.0 0.2 2.3 -0.3 -1.3 -1.7 3.5 2.6 1.6 0.3 -0.7 Real (relative producer prices)2 2.2 0.8 2.8 -0.2 1.1 3.0 3.4 3.7 1.4 -2.4 -3.3 -2.8 -0.2 0.3 -0.6 -0.6 0.8 USD/EUR 1.371 1.471 1.393 1.504 1.317 1.302 1.362 1.431 1.478 1.384 1.273 1.291 1.577 1.498 1.437 1.332 1.273 Sources of data: SORS, AP, BS, OECD Main Economic Indicators, calculations IMAD. Notes: 1Change of methodology: the calculation of domestic currency's effective exchange rate includes the currencies/prices of Slovenia's 17 trading partners (Austria, Belgium, Germany, Italy, France, Netherlands, Spain, Denmark, United Kingdom, Sweden, Czech Republic, Hungary, Poland, Slovakia, USA, Switzerland, Japan); weights are the shares of individual trading partners in Slovenian exports and imports of goods within manufacturing (5-8 SITC) in 2001-2003; exports are double weighted; a rise in the index value indicates an appreciation of domestic currency and vice versa. ^Producer prices in manufacturing activities 2008 2009 2010 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 8.6 6.8 4.2 5.3 5.1 4.1 4.7 3.8 0.7 2.4 1.7 1.3 2.1 2.2 3.6 5.2 4.2 4.2 4.4 4.0 5.1 3.6 2.7 10.2 1.1 -3.3 6.1 2.0 -1.8 4.7 -0.4 -0.3 -0.7 -5.5 -0.9 -2.5 1.1 3.0 5.7 5.6 4.3 5.6 7.1 8.6 6.6 5.6 16.0 10.1 5.3 1.7 4.3 -5.9 9.4 2.3 6.2 -3.5 -20.3 16.1 -8.7 2.0 3.5 4.7 1.4 14.0 -0.8 0.8 1.8 3.1 -0.4 5.7 0.1 -0.5 0.4 -0.4 -1.3 0.1 0.1 -0.6 1.6 1.9 4.6 4.3 6.7 8.3 15.2 10.7 10.1 9.4 8.1 11.0 7 5.1 3.2 9.4 6.1 8.1 7.6 5.5 10.3 5.6 2.9 6.7 -10.4 -8.6 12.1 3.5 6.6 4.3 3.3 0.8 3.0 1.6 6.5 2.7 -3.4 4.8 4.4 3.6 4.6 3.5 1.0 5.2 1.6 1.2 0.9 -3.3 2.1 1.1 0.0 3.0 5.1 3.5 3.6 2.0 1.6 2.9 1.5 -1.2 7.2 1.7 -0.6 2.5 0.5 -0.9 3.4 2.9 0.6 1.4 -1.4 1.1 2.9 1.0 2.9 4.6 7.2 5.8 4.5 2.1 6.5 3.8 5.6 6.6 6.1 3.5 3.6 1.5 2.9 2.4 1.6 1.5 0.6 0.4 -0.8 0.6 0.3 2.4 5.2 4.2 4.0 4.1 4.0 4.5 4.3 4.2 5.2 3.9 2.4 0.6 2.9 2.2 1.1 2.0 -4.8 4.4 -1.0 -3.3 0.5 -1.5 1.8 3.2 1.5 1.6 0.5 1.8 3.4 2.3 2.6 5.4 3.9 3.0 3.2 3.4 0.4 1.3 1.4 0.6 -0.2 -0.3 3.2 0.0 2.2 1.8 4.4 3.7 4.2 4.6 4.0 4.1 5.5 5.1 5.4 6.9 1.8 2.5 3.4 2.5 3.4 2.5 0.0 0.0 0.7 -3.6 -1.6 0.0 1.6 1.5 2.3 3.1 2.1 2.9 4.3 3.1 1.1 8.1 3.8 0.6 1.7 -4.2 -5.4 -1.6 2.0 0.5 -1.7 6.3 -1.8 -5.1 1.0 1.6 1.1 2.5 -0.6 7.6 5.0 1.2 1.5 -4.1 5.0 2.9 1.4 0.6 1.3 -0.6 -0.5 1.9 1.4 2.0 4.2 5.3 4.0 1.8 3.3 2.7 3.7 3.9 8.4 4.1 3.1 1.5 0.8 8.8 3.1 4.3 4.7 4.6 2.2 3.3 2.0 1.1 1.3 0.4 0.6 -0.9 1.0 1.7 2.0 1.8 1.5 2.1 1.7 3.9 1.3 -0.2 7.1 9.1 5.1 5.5 3.2 1.6 1.4 0.0 -0.1 -0.4 -1.0 -1.8 1.1 -1.2 4.1 4.7 5.1 4.1 3.9 3.8 5.3 4.6 5.5 12.3 15.2 8.8 10.7 11.0 10.0 8.4 5.3 -0.3 2.6 1.1 -2.0 2.4 -1.1 -1.5 -3.0 -2.1 -0.6 -0.5 0.9 -0.1 0.3 1.3 9.6 9.3 4.2 7.3 6.6 6.0 5.7 2.9 -1.7 2.6 1.8 0.0 -0.1 0.5 0.5 -0.4 0.2 1.0 1.0 0.7 1.2 1.2 0.6 21.4 25.5 18.9 20.0 26.5 22.2 19.3 16.0 0.4 1.7 2.4 0.8 1.0 -1.6 1.2 -0.6 -2.3 -0.2 -0.4 0.7 0.2 0 0.3 9.1 8.2 6.4 6.3 7.2 6.0 4.0 5.8 0.1 1.1 3.2 -0.5 -0.1 0.5 0.6 1.0 2.1 1.3 0.7 0.9 1.1 1.5 -2.2 11.3 2.6 5.3 4.3 0.8 1.0 1.2 0.9 0.8 0.3 -0.4 -0.4 0.6 3.4 2.2 4.1 6.1 3.9 4.7 6.0 5.9 4.5 5.4 -0.4 -0.4 -0.3 -0.1 -0.6 -0.3 0.1 -0.1 0.2 0.9 2.2 2.3 0.9 0.4 -0.3 -1.1 -1.1 -1.9 -2.7 -2.1 -2.3 -2.5 -2.0 0.0 -0.1 0.5 0.8 -0.2 0.1 0.3 -0.4 0.2 0.9 2.1 3.3 1.5 0.5 -0.1 -1.1 -0.4 -1.4 -2.2 -1.6 -1.4 -2.0 -1.8 3.2 2.8 2.8 3.5 2.9 3.2 4.0 4.2 3.1 3.8 3.8 1.6 -1.1 -1.9 -2.1 -3.2 -3.8 -2.9 -3.2 -2.9 -2.5 -3.2 -2.8 1.345 1.324 1.279 1.305 1.319 1.365 1.402 1.409 1.427 1.456 1.482 1.491 1.461 1.427 1.369 1.357 1.341 1.257 1.221 1.277 1.2894 1.3067 1.390 PRICES 2007 2008 2009 2008 2009 2010 2008 2009 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 9 10 11 12 1 CPI, y-o-y growth rates, % 3.6 5.7 0.9 6.1 3.3 1.8 0.7 -0.2 1.1 1.4 2.1 2.1 5.5 4.9 3.1 2.1 1.6 Food, non-alcoholic beverages 7.8 10.1 0.6 9.8 4.9 3.2 0.9 -0.7 -1.0 -1.4 0.7 2.6 7.2 5.3 5.6 3.8 3.5 Alcoholic beverages, tobacco 6.5 3.2 6.7 0.7 2.1 3.0 7.2 8.5 7.9 7.1 6.5 7.3 1.8 2.1 2.1 2.0 2.2 Clothing and footwear 2.1 4.4 -0.6 2.1 5.2 1.8 1.2 -2.2 -3.0 -5.0 -1.9 -0.6 3.7 6.1 4.6 4.8 2.3 Housing, water, electricity, gas 2.6 9.7 -0.3 11.5 5.3 1.7 -2.1 -3.5 3.0 8.3 11.3 12.0 10.5 9.0 4.8 2.4 0.8 Furnishings, household equipment 4.5 5.8 4.0 6.5 6.7 6.1 4.5 3.5 1.9 1.3 0.8 1.3 7.3 7.0 6.7 6.5 6.5 Medical, pharmaceutical products 1.1 2.9 4.0 4.9 5.8 8.7 5.3 1.4 0.7 -0.6 0.6 4.0 5.1 5.2 5.4 6.7 9.5 Transport 0.3 1.9 -3.0 4.1 -2.2 -3.7 -4.5 -4.1 0.6 1.2 -0.1 -1.8 3.7 2.6 -3.6 -5.4 -5.1 Communications 0.3 0.6 -4.1 0.1 -1.7 -4.3 -4.7 -4.3 -3.2 0.0 1.4 1.3 -0.9 -0.9 0.0 -4.3 -3.7 Recreation and culture 3.6 4.4 3.0 4.8 3.2 3.0 3.6 2.8 2.5 1.2 0.4 -0.2 4.0 2.8 3.2 3.6 2.8 Education 1.9 5.2 3.4 4.8 6.1 5.1 3.0 2.7 2.7 2.0 1.9 1.6 5.0 6.0 6.1 6.1 6.0 Catering services 7.3 9.6 4.4 10.4 8.7 6.3 4.9 4.0 2.7 1.9 1.9 -2.9 10.0 9.7 8.8 7.7 6.5 Miscellaneous goods & services 3.6 3.9 3.8 3.8 3.4 3.8 3.3 4.4 3.9 2.3 2.0 0.5 3.6 3.4 3.2 3.4 3.4 HCPI 3.8 5.5 0.9 6.2 3.1 1.7 0.6 -0.2 1.4 1.7 2.4 2.3 5.6 4.8 2.9 1.8 1.4 Core inflation (excluding fresh food and energy) 2.6 4.6 1.9 4.7 4.0 3.1 2.6 1.2 0.7 0.0 0.4 0.4 4.5 4.1 3.9 3.9 3.2 PRODUCER PRICE INDICES, y-o-y growth rates, % Total 4.2 3.8 -1.3 5.1 3.2 1.1 -1.5 -3.1 -1.8 -1.0 2.3 3.4 4.8 4.2 3.3 2.2 1.9 Domestic market 5.5 5.6 -0.4 6.2 4.2 1.5 -0.4 -1.5 -1.1 0.2 2.0 2.8 5.7 5.0 4.0 3.5 2.3 Non-domestic market 3.0 2.2 -2.2 3.9 2.3 0.8 -2.6 -4.5 -2.5 -2.1 2.6 4.0 4.0 3.3 2.7 1.0 1.5 euro area 5.1 2.2 -3.5 4.2 1.5 -0.6 -4.5 -6.0 -3.0 -2.4 2.5 4.0 3.8 3.1 1.4 0.1 0.2 non-euro area -0.5 2.1 0.3 3.4 3.9 3.5 1.1 -1.7 -1.6 -1.6 2.7 3.8 4.3 3.9 5.1 2.7 4.2 Import price indices 4.0 1.3 -3.3 3.8 1.4 -2.1 -4.6 -4.7 -1.8 4.0 8.8 7.8 4.7 3.7 1.6 -1.0 -2.4 PRICE CONTROL,' y-o-y growth rates, % Energy prices 0.6 12.4 -12.3 21.1 -1.2 -12.9 -17.7 -17.3 0.4 16.1 18.8 15.9 18.4 14.1 -4.3 -12.7 -15.0 Oil products -0.9 11.7 -12.0 21.1 -5.7 -16.3 -18.9 -15.9 6.2 21.9 20.3 13.5 17.7 12.2 -9.4 -18.9 -19.5 Basic utilities -2.3 0.6 3.6 -1.3 1.1 1.7 0.9 0.8 10.8 0.7 0.7 0.8 1.6 1.6 Transport & communications 0.6 -0.4 0.6 -1.3 -1.3 -1.2 -1.1 2.5 2.5 2.5 2.7 1.1 -1.3 -1.3 -1.3 -1.3 -1.3 Other controlled prices 2.9 1.8 4.9 1.7 2.4 2.4 6.8 5.6 4.9 4.9 0.4 0.1 2.4 2.4 2.4 2.4 2.3 Direct control - total 3.1 8.6 -6.9 13.7 -0.2 -7.8 -10.9 -10.9 2.9 14.1 16.1 14.4 12.4 9.7 -2.2 -7.8 -9.4 Source of data: SORS, calculations and estimates IMAD. Note: 1 the structure of groups varies, data published are not directly comparable to those published previously. The electricity market was liberalized on 1 July 2007. Data from July 2007 onwards are not comparable. Since July 2009, formation of prices for utility services is no longer under government control.. 2009 2010 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 2.1 1.8 1.1 0.7 0.3 -0.6 0.0 -0.1 0.0 1.6 1.8 1.5 1.3 1.4 2.3 2.1 1.9 2.1 2.3 2.0 1.9 1.4 3.1 3.0 2.0 0.6 0.0 -1.3 -0.4 -0.4 -1.2 -0.8 -1.1 -2.4 -1.2 -0.7 -0.1 0.4 1.7 2.8 2.9 2.2 1.9 1.9 2.7 4.0 4.3 8.4 9.0 9.1 8.6 7.7 7.7 8.1 8.0 7.9 7.6 5.9 9.9 5.1 4.5 5.2 8.2 8.5 8.2 8.0 0.6 2.3 0.5 1.9 1.1 -1.3 -1.7 -3.6 -2.7 -2.8 -3.4 -5.9 -5.7 -3.6 -0.9 -2.4 -2.3 -2.1 -1.7 1.9 -1.1 0.0 3.0 1.2 0.1 -2.3 -4.0 -4.9 -3.5 -2.2 -1.7 4.5 6.3 7.6 8.4 8.9 10.7 11.6 11.7 12.4 12.3 11.4 11.7 7.1 6.7 5.1 4.7 4.2 4.5 4.0 4.0 2.5 2.1 2.2 1.5 1.8 1.6 0.6 1.0 0.7 0.8 0.5 1.3 2.2 2.0 1.8 9.8 6.9 5.4 5.5 5.1 1.9 1.6 0.7 0.6 1.3 0.3 -0.3 -0.7 -0.7 0.7 0.5 0.5 2.8 4.0 5.2 5.1 4.4 -2.5 -3.6 -3.5 -4.7 -5.2 -5.6 -3.5 -3.1 -2.8 1.9 2.9 2.3 0.5 0.9 0.8 0.4 -1.5 -1.2 -2.0 -2.1 -0.6 -1.2 -4.7 -4.6 -5.2 -4.4 -4.4 -4.1 -4.2 -4.6 -3.7 -4.0 -1.9 -0.6 0.2 0.4 1.0 1.5 1.6 -0.3 0.7 3.5 2.5 2.8 2.8 3.4 3.3 3.6 4.1 3.0 2.7 2.7 3.1 2.7 1.7 1.7 1.0 0.8 0.9 0.6 -0.2 -0.6 -0.3 0.3 0.1 -0.1 6.3 3.2 3.2 3.0 3.0 3.0 3.0 2.2 2.7 2.6 2.6 2.4 1.8 1.8 1.8 1.9 1.9 1.9 1.9 0.9 0.4 1.3 6.3 6.0 5.1 4.8 4.7 4.4 4.2 3.3 3.1 2.3 2.6 2.0 1.8 2.0 1.9 2.1 1.7 1.3 1.2 -11.2 -10.9 -11.0 3.7 4.2 3.3 3.1 3.5 4.5 4.4 4.3 4.2 4.1 3.6 3.3 2.3 1.3 1.8 2.1 2.0 0.7 0.4 0.4 0.9 0.6 2.1 1.6 1.1 0.5 0.2 -0.6 0.1 0.0 0.2 1.8 2.1 1.8 1.6 1.8 2.7 2.4 2.1 2.3 2.4 2.1 2.1 1.6 2.8 3.1 2.6 2.6 2.6 1.4 1.3 0.9 0.7 1.0 0.3 0.1 -0.1 0.0 0.6 0.4 0.2 0.2 0.5 0.6 0.5 0.2 1.1 0.3 -0.5 -1.6 -2.4 -3.0 -3.3 -2.8 -2.4 -1.9 -1.2 -1.4 -1.2 -0.2 1.0 2.9 3.0 3.4 3.5 3.2 3.5 3.8 1.2 0.8 0.2 -0.7 -0.7 -1.3 -1.7 -1.6 -1.4 -1.1 -0.7 -0.1 0.1 0.5 0.7 2.6 2.6 2.7 2.9 2.8 3.1 3.2 1.0 -0.1 -1.2 -2.5 -4.0 -4.7 -4.9 -4.0 -3.2 -2.6 -1.7 -2.8 -2.5 -0.9 1.3 3.2 3.3 4.2 4.1 3.6 3.9 4.5 -0.3 -1.7 -3.1 -4.1 -6.2 -6.7 -6.4 -4.8 -3.9 -2.8 -2.3 -3.0 -3.1 -1.0 1.3 3.2 3.1 4.5 4.1 3.4 4.1 4.8 3.5 2.9 2.5 0.5 0.2 -0.6 -2.0 -2.4 -1.9 -2.3 -0.6 -2.4 -1.5 -0.8 1.4 3.2 3.6 3.4 4.1 4.0 3.2 3.6 -1.3 -2.7 -3.8 -4.8 -5.2 -4.7 -5.0 -4.5 -3.7 -2.1 0.4 3.3 3.2 5.4 8.3 9.4 8.7 7.6 7.9 7.7 7.6 8.9 -8.9 -14.6 -14.5 -18.0 -20.1 -21.5 -16.3 -13.9 -12.6 3.8 13.0 16.9 13.9 17.5 20.1 20.5 15.8 17.4 15.6 14.6 18.2 12.2 -11.2 -17.9 -15.6 -19.4 -21.2 -20.9 -14.8 -11.5 -9.4 10.3 21.9 24.4 18.6 22.8 22.7 22.8 15.6 15.2 13.2 12.1 16.6 11.6 1.7 1.9 1.0 0.7 0.8 0.8 0.8 0.8 0.8 16.3 15.4 - - - - - - - - - - - -1.3 -1.1 -1.1 -1.1 -1.1 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.7 2.7 2.7 2.7 1.1 1.1 1.1 1.1 1.1 2.4 2.4 6.2 7.1 7.1 7.1 4.9 4.9 4.9 4.9 4.9 4.9 4.9 4.9 1.0 0.1 0.1 0.1 0.1 0.1 0.1 0.1 -5.0 -9.0 -8.6 -11.2 -12.9 -13.7 -10.2 -8.6 -7.6 6.0 11.8 14.6 12.6 15.2 16.7 17.2 14.4 15.5 14.3 13.5 15.9 9.2 BALANCE OF PAYMENTS 2007 2008 2009 2008 2009 2010 2008 2009 Q3 Q4 Q1 Q2 Q3 Q4 Q1 1 Q2 1 Q3 10 11 12 1 BALANCE OF PAYMENTS, in EUR m Current account -1,646 -2,489 -526 -698 -757 -304 64 -235 -51 -113 -40 60 -255 -156 -346 -75 Goods1 -1,666 -2,650 -699 -751 -743 -156 -29 -228 -286 -128 -190 -139 -266 -180 -297 -48 Exports 19,798 20,048 16,167 5,038 4,577 3,934 4,064 3,950 4,219 4,210 4,699 4,630 1,841 1,532 1,204 1,214 Imports 21,464 22,698 16,866 5,789 5,320 4,090 4,093 4,178 4,505 4,339 4,889 4,769 2,107 1,711 1,501 1,262 Services 1,047 1,493 1,114 413 304 239 311 296 269 225 327 353 141 110 53 92 Exports 4,145 5,043 4,301 1,475 1,219 918 1,049 1,272 1,061 920 1,108 1,383 447 378 394 307 Imports 3,098 3,549 3,187 1,062 915 679 738 977 793 694 781 1,029 306 268 341 215 Income -789 -1,030 -782 -357 -231 -230 -200 -241 -112 -157 -135 -163 -90 -74 -67 -71 Receipts 1,169 1,261 665 335 342 131 176 138 220 206 239 216 109 107 126 48 Expenditure 1,957 2,292 1,447 691 573 361 376 378 332 363 373 378 199 181 193 119 Current transfers -239 -302 -159 -4 -87 -158 -18 -62 79 -53 -43 8 -40 -12 -35 -48 Receipts 941 870 957 254 238 141 266 176 374 258 215 269 61 87 90 35 Expenditure 1,180 1,172 1,116 257 325 299 283 238 296 312 258 261 101 99 125 83 Capital and financial account 1,920 2,545 220 631 703 -25 -57 129 173 95 227 109 -117 291 529 188 Capital account -52 -25 -9 -4 -26 -4 41 -4 -42 45 2 15 5 41 -72 -7 Financial account 1,972 2,571 230 635 729 -20 -98 133 214 49 225 94 -122 251 601 196 Direct investment -210 381 -539 82 299 3 -415 -46 -81 -39 60 50 -29 93 235 148 Domestic abroad -1,317 -949 -121 -248 -132 104 -260 35 1 -120 25 -25 -82 -10 -40 129 Foreign in Slovenia 1,106 1,329 -419 330 431 -100 -155 -81 -82 82 35 75 53 103 275 20 Portfolio investment -2,255 572 4,625 166 1,258 874 1,151 2,293 307 1,102 500 -59 387 658 213 410 Financial derivatives -15 46 -2 5 6 -23 12 12 -2 -22 -65 -1 2 2 2 -10 Other investment 4,313 1,551 -4,021 380 -855 -988 -891 -2,112 -29 -1,054 -220 85 -515 -486 145 -349 Assets -4,741 -427 -273 434 300 746 -161 -1,053 194 268 -599 492 -434 18 717 73 Commercial credits -400 -142 417 -9 554 62 166 -37 227 -231 -209 9 -43 131 466 149 Loans -1,895 -325 -29 158 -91 40 -91 -23 45 -359 496 13 -286 73 122 -185 Currency and deposits -2,454 35 -587 304 -155 638 -239 -1,004 18 860 -880 375 -115 -191 151 98 Other assets 7 4 -75 -19 -8 7 2 12 -96 -2 -6 95 9 5 -22 11 Liabilities 9,054 1,978 -3,747 -54 -1,156 -1,735 -730 -1,059 -223 -1,322 379 -407 -80 -504 -572 -422 Commercial credits 499 -73 -459 -25 -536 -301 -105 25 -78 99 269 -39 -66 -182 -288 -299 Loans 3,841 1,869 -2,941 242 -489 -571 -1,331 -73 -966 -414 -195 -62 37 -483 -43 -125 Deposits 4,727 190 -318 -272 -137 -858 700 -983 822 -1,079 358 -305 -51 159 -244 5 Other liabilities -13 -7 -29 2 6 -5 6 -28 -2 72 -54 -1 0 3 3 -3 International reserves2 140 21 167 1 21 114 46 -13 20 62 -50 18 33 -17 5 -4 Statistical error -273 -56 305 67 54 329 -7 106 -122 18 -187 -169 372 -135 -184 -113 EXPORTS AND IMPORTS BY END-USE OF PRODUCTS, in EUR m Export of investment goods 1,936 2,241 1,783 598 544 442 461 407 473 404 456 440 201 185 158 128 Intermediate goods 10,436 10,760 8,090 2,730 2,385 1,977 1,996 2,025 2,093 2,235 2,539 2,527 981 816 589 644 Consumer goods 7,035 6,808 6,144 1,648 1,590 1,474 1,568 1,482 1,620 1,539 1,671 1,628 638 511 441 429 Import of investment goods 3,031 3,441 2,288 862 878 583 551 521 633 449 608 569 289 279 310 172 Intermediate goods 12,875 13,735 9,823 3,543 3,107 2,381 2,335 2,458 2,649 2,682 3,027 2,955 1,309 1,017 782 758 Consumer goods 5,601 5,870 5,004 1,475 1,416 1,195 1,262 1,255 1,292 1,262 1,314 1,321 544 441 431 353 Sources of data: BS, SORS. Notes: 1exports and imports (F.O.B.) include also the adjustment for exports and imports of goods by ITRS and duty-free shops reports; 2 reserve assets of the BS. 2009 2010 2 3 4 5 6 7 8 9 10 11 12 12 3 4 5 6 7 8 910 -137 -92 4 18 42 -84 -136 -15 -55 87 -83 -24 -127 38 -48 -82 90 54 -7 12 -61 -37 -71 -67 -7 45 -50 -161 -17 -50 -79 -158 -17 -86 -25 -75 -122 8 -15 -94 -31 -125 1,293 1,427 1,304 1,333 1,427 1,401 1,065 1,484 1,499 1,471 1,248 1,230 1,330 1,650 1,470 1,567 1,662 1,606 1,302 1,722 1,651 1,330 1,498 1,371 1,340 1,382 1,451 1,226 1,501 1,549 1,550 1,406 1,248 1,416 1,675 1,545 1,690 1,654 1,621 1,396 1,753 1,776 60 87 103 112 96 59 125 111 114 85 70 77 66 83 95 111 121 96 135 123 106 278 334 344 348 357 436 447 389 367 322 373 296 284 340 350 363 394 482 482 419 366 218 246 241 236 261 376 322 278 253 237 303 219 218 257 255 252 273 386 347 296 260 -82 -76 -56 -77 -67 -96 -66 -79 -63 17 -65 -56 -55 -45 -49 -45 -40 -53 -54 -56 -52 42 41 51 55 69 51 43 44 45 107 69 66 64 76 74 82 83 73 72 71 74 124 118 107 132 137 146 109 123 108 90 134 122 119 122 123 127 123 125 126 127 126 -78 -32 24 -11 -31 2 -35 -30 -55 64 70 -27 -52 26 -18 -25 0 26 6 -24 9 45 61 116 80 69 80 53 43 60 148 166 63 83 112 55 82 79 116 87 66 99 124 93 92 90 101 77 87 73 116 83 96 91 135 86 73 107 78 90 81 90 90 -96 -117 15 98 -170 104 -66 92 95 -7 85 57 78 -41 134 10 82 100 -92 102 72 -2 5 -2 -1 45 -3 -2 1 1 25 -67 -7 -2 55 2 -3 4 -8 -4 27 3 -95 -121 18 99 -215 106 -64 91 94 -32 153 64 80 -95 133 14 79 107 -88 74 69 -14 -132 -100 -255 -61 -40 27 -34 -17 -89 25 30 -46 -22 -2 30 32 54 55 -59 65 -7 -18 -74 -189 3 26 24 -15 -25 36 -10 -7 -76 -37 -23 24 24 4 5 -33 -24 -6 -114 -26 -66 -64 -65 3 -18 8 -126 36 37 30 15 21 6 8 50 50 -26 89 559 -95 1,005 263 -118 864 -216 1,644 -14 -71 392 1,357 -449 194 606 -203 97 81 -35 -105 57 -13 0 4 8 -1 -2 6 8 3 3 -7 -2 -2 -19 -11 -21 -33 -1 0 0 1 -713 74 -888 20 -24 -663 90 -1,539 115 114 -258 -1,372 569 -252 -492 267 6 -23 -105 213 -73 603 70 -152 -730 721 -656 719 -1,116 219 -349 323 153 65 50 -3 -635 39 685 -241 48 -147 -26 -62 70 141 -45 -6 85 -117 -68 -31 326 -6 -42 -184 -32 -91 -86 -7 186 -170 -108 206 19 48 -62 -77 -58 72 -37 -8 48 5 -54 29 -333 417 17 61 104 -37 -54 -23 413 127 -269 -808 838 -592 556 -968 292 -367 93 220 73 568 -395 -548 63 580 -463 258 -2 10 -15 -1 -2 5 0 6 6 3 2 -100 -6 5 -1 7 -14 0 9 73 13 -13 -1,316 4 -736 751 -745 -7 -629 -423 -104 462 -581 -1,525 504 -301 -490 902 -34 -708 136 165 74 -33 30 -48 -32 -25 20 -110 116 88 80 -246 -85 68 116 55 127 87 -35 -182 177 139 18 -464 -328 349 -1,353 12 -30 -55 -159 32 -839 -40 -18 -356 -276 328 -246 -38 -40 17 -240 -1,303 441 -361 434 627 -10 -491 -482 -36 358 500 -1,394 448 -133 -206 455 109 -607 348 -46 180 2 -4 2 -1 5 -30 3 -2 2 -8 4 -6 6 72 -63 -8 17 -28 10 17 -5 86 31 -5 62 -11 -53 29 12 8 11 1 51 7 4 32 -60 -23 -3 -4 25 19 234 209 -19 -115 128 -20 202 -77 -40 -79 -3 -34 50 2 -87 72 -172 -154 99 -113 -11 152 162 171 141 149 147 110 150 167 154 151 117 120 167 142 155 158 158 125 157 N/A 637 695 646 652 698 722 552 751 782 730 581 657 724 853 802 855 882 877 708 942 N/A 491 555 478 524 567 517 392 572 540 578 502 447 475 617 515 545 611 557 459 612 N/A 161 249 190 187 175 170 154 197 218 208 207 121 148 180 211 217 180 179 151 238 N/A 803 820 762 759 814 861 711 886 913 937 799 794 878 1009 949 1058 1020 1023 864 1,068 N/A 389 453 437 416 408 434 381 441 447 433 413 357 389 516 417 448 449 438 406 477 N/A MONETARY INDICATORS AND INTEREST RATES 2007 2008 2009 2008 2009 7 1 8 1 9 1 10 1 11 1 12 1 1 2 1 3 1 4 1 5 SELECTED CLAIMS OF OTHER MFI ON DOMESTIC SECTORS, end of the month, in EUR m Claims of the BS on central government 67 68 160 66 66 67 69 69 68 69 87 103 121 140 Central government (S. 1311) 2,367 2,162 3,497 2,030 2,069 2,046 2,058 2,176 2,162 2,704 2,867 3,134 3,288 3,542 Other government (S. 1312, 1313, 1314) 118 212 376 136 143 178 184 181 212 223 229 233 243 254 Households (S. 14, 15) 6,818 7,827 8,413 7,521 7,603 7,705 7,857 7,785 7,827 7,831 7,852 7,868 7,910 7,946 Non-financial corporations (S. 11) 18,105 21,149 21,704 20,404 20,619 20,872 21,134 21,092 21,149 21,346 21,429 21,469 21,509 21,516 Non-monetary financial institutions (S. 123, 124, 125) 2,305 2,815 2,680 2,726 2,729 2,798 2,815 2,845 2,815 2,815 2,814 2,851 2,869 2,838 Monetary financial institutions (S. 121, 122) 2,401 3,666 5,302 2,403 2,400 2,737 2,965 2,963 3,666 3,887 3,826 3,786 3,829 4,008 Claims on domestic sectors, TOTAL In domestic currency 26,555 32,113 34,731 29,805 30,108 30,888 31,444 31,594 32,113 32,388 32,663 32,648 32,790 33,140 In foreign currency 1,990 2,370 1,895 2,228 2,271 2,344 2,512 2,371 2,370 2,372 2,315 2,190 2,172 2,122 Securities, total 3,570 3,346 5,345 3,188 3,184 3,104 3,059 3,077 3,346 4,046 4,040 4,504 4,686 4,843 SELECTED OBLIGATIONS OF OTHER MFI ON DOMESTIC SECTORS, end of the month, l in EUR m Deposits in domestic currency, total 20,029 23,129 27,965 21,341 21,465 21,992 22,177 22,385 23,129 23,563 24,487 24,334 25,649 26,020 Overnight 6,887 6,605 7,200 6,744 6,703 6,918 6,666 6,577 6,605 6,415 6,421 6,609 6,610 6,876 With agreed maturity -short-term 8,913 10,971 9,779 9,936 9,929 10,038 10,530 10,659 10,971 11,246 12,053 11,705 12,951 13,053 With agreed maturity -long-term 2,857 4,157 9,688 3,241 3,378 3,519 3,555 3,727 4,157 4,542 4,729 4,827 4,876 4,868 Short-term deposits redeemable at notice 1,372 1,396 1,298 1,420 1,455 1,517 1,426 1,422 1,396 1,360 1,284 1,193 1,212 1,223 Deposits in foreign currency, total 559 490 433 491 502 493 537 551 490 504 502 491 489 495 Overnight 218 215 238 220 228 218 244 247 215 242 230 233 231 251 With agreed maturity -short-term 248 198 123 192 190 196 213 227 198 181 195 177 180 166 With agreed maturity -long-term 56 41 45 43 42 43 44 42 41 42 43 42 42 41 Short-term deposits redeemable at notice 37 36 27 36 42 36 36 35 36 39 34 39 36 37 INTEREST RATES OF MONETARY FINANCIAL INSTITUTIONS, % New deposits in domestic currency Households Overnight deposits 0.36 0.46 0.23 0.48 0.48 0.48 0.51 0.52 0.43 0.48 0.40 0.34 0.28 0.25 Time deposits with maturity of up to one year 3.36 4.30 2.00 4.40 4.39 4.53 4.65 4.56 4.45 4.08 3.40 2.82 2.44 2.28 New loans to households in domestic currency Housing loans, 5-10 year fixed interest rate 5.80 6.77 6.28 6.71 6.95 6.99 7.10 7.17 6.88 7.05 6.63 5.75 6.75 6.37 New loans to non-financial corporations in domestic currency Loan over EUR 1 million, 1-5 year fixed interest rate 5.76 6.62 6.06 6.91 6.53 6.94 6.76 7.24 7.74 6.61 6.35 6.34 6.05 6.10 INTEREST RATES OF THE EUROPEAN CENTRAL BANK, % Main refinancing operation^ 3.8^ 3.8^ 1.0^ 4.2^ 4.2^ 4.2^ 3.7^ 3.2^ 2.5^ 2.0^ 2.0^ 1.5^ 1.2^ 1.00 INTERBANK INTEREST RATES EURIBOR 3-month rates 4.28 4.63 0.71 4.96 4.97 5.02 5.11 4.24 3.29 2.46 1.94 1.64 1.42 1.28 6-month rates 4.35 4.72 1.00 5.15 5.16 5.22 5.18 4.29 3.37 2.54 2.03 1.78 1.61 1.48 LIBOR CHF 3-month rates 2.55 2.58 0.25 2.79 2.75 2.78 3.00 1.97 0.91 0.57 0.51 0.44 0.40 0.40 6-month rates 2.65 2.69 0.35 2.94 2.89 2.92 3.09 2.16 1.08 0.71 0.65 0.58 0.54 0.54 Sources of data: BS, BBA - British Bankers' Association. 2009 2010 6 1 7 1 8 1 9 1 10 1 11 1 12 1 |2|3|4|5|6|7|8|9|10|11 142 151 167 166 161 161 160 176 177 140 140 142 141 140 142 140 139 139 3,472 3,456 3,427 3,610 3,625 3,581 3,497 3,334 3,382 2,884 2,897 3,001 3,120 3,130 3,326 3,422 3,447 3,453 251 257 262 281 305 336 376 390 395 390 392 395 401 415 421 417 434 497 7,951 8,055 8,135 8,231 8,295 8,345 8,413 8,452 8,480 8,601 8,647 8,701 8,897 8,914 9,062 9,119 9,149 9,225 21,517 21,557 21,671 21,704 21,688 21,645 21,704 21,792 21,896 21,950 22,062 21,997 22,014 22,022 21,814 21,862 21,848 21,790 2,835 2,838 2,868 2,846 2,846 2,772 2,680 2,684 2,669 2,620 2,606 2,558 2,536 2,524 2,502 2,488 2,496 2,497 4,365 4,382 4,334 4,723 4,563 4,589 5,302 6,141 5,093 5,057 5,555 5,638 6,120 5,459 5,315 5,399 5,079 5,688 33,353 33,601 33,628 34,045 33,922 33,962 34,731 35,678 34,817 34,893 35,430 35,620 35,939 35,493 35,389 35,616 35,430 35,931 2,059 2,017 2,003 1,969 1,939 1,919 1,895 1,904 1,894 1,887 1,859 1,852 1,915 1,860 1,875 1,828 1,742 1,777 4,979 4,925 5,067 5,380 5,460 5,386 5,345 5,211 5,204 4,723 4,871 4,819 5,234 5,112 5,175 5,263 5,282 5,444 26,576 26,206 25,956 26,950 26,860 26,930 27,965 28,953 28,198 27,716 27,949 28,085 27936 27,077 27,355 26,817 26,696 27,486 7,163 6,862 7,011 7,079 6,940 7,028 7,200 7,949 7,139 7,396 7,351 7,732 7969 7,934 8,038 8,029 7,926 8,119 12,015 10,560 10,067 10,720 10,487 10,283 9,779 9,722 9,479 8,582 8,347 8,029 8376 8,574 8,621 8,096 8,100 8,256 6,182 7,600 7,712 7,952 8,190 8,315 9,688 9,928 10,260 10,431 10,894 11,005 11416 10,413 10,529 10,532 10,587 11,003 1,216 1,184 1,166 1,199 1,243 1,304 1,298 1,354 1,320 1,307 1,357 1,319 175 156 167 160 83 108 492 480 462 462 457 454 433 426 439 436 450 495 707 465 494 465 456 471 249 239 240 244 242 261 238 240 241 250 270 299 515 283 310 280 286 291 170 166 150 144 141 122 123 117 120 110 103 104 129 122 121 125 113 118 39 39 38 43 42 43 45 48 52 54 54 57 61 58 60 57 55 59 34 36 34 31 32 28 27 21 26 22 23 35 2 2 3 3 2 3 0.23 0.23 0.23 0.23 0.23 0.23 0.23 0.22 0.22 0.22 0.22 0.21 0.22 0.19 0.19 0.19 0.20 - 2.40 2.35 2.27 2.14 2.04 1.97 2.00 1.91 1.75 1.69 1.66 1.72 1.84 1.87 1.83 1.89 1.86 - 6.59 6.74 6.57 6.64 6.74 5.00 6.28 6.11 6.08 5.33 5.80 5.38 5.42 5.12 5.33 5.17 5.50 6.19 6.36 6.20 6.66 6.47 5.94 6.06 6.15 6.31 5.64 5.98 6.03 5.63 5.40 5.84 4.90 5.64 1.0^ 1.0^ 1.0^ 1.0^ 1.0^ 1.0^ 1.0^ 1.0^ 1.0^ 1.0^ 1.0^ 1.0^ 1.0^ 1.0^ 1.0^ 1.0^ 1.0^ 1.00 1.23 0.98 0.86 0.77 0.74 0.72 0.71 0.68 0.66 0.64 0.64 0.69 0.73 0.85 0.90 0.88 1.00 1.04 1.44 1.21 1.12 1.04 1.02 0.99 1.00 0.98 0.97 0.95 0.96 0.98 1.01 1.10 1.15 1.14 1.22 1.27 0.40 0.37 0.34 0.30 0.27 0.25 0.25 0.25 0.25 0.25 0.24 0.19 0.10 0.13 0.16 0.17 0.17 0.52 0.49 0.45 0.41 0.39 0.36 0.35 0.34 0.33 0.33 0.33 0.28 0.20 0.22 0.23 0.24 0.24 - PUBLIC FINANCE 2007 2008 2009 2008 2009 2010 2009 Q3 Q4 Q1 1 Q2 1 Q3 1 Q4 Q1 1 Q2 1 Q3 3 1 4 CONSOLIDATED BALANCE OF PUBLIC FINANCING (GFS-IMF methodology), current prices, EUR m GENERAL GOVERNMENT REVENUES TOTAL REVENUES 14,006.1 15,339.2 14,408.0 3,857.5 4,106.6 3,283.0 3,542.8 3,558.8 4,023.5 3,310.3 3,477.0 3,649.9 1,092.1 1,199.9 Current revenues 13,467.2 14,792.3 13,639.5 3,733.8 3,903.4 3,204.0 3,322.8 3,470.3 3,642.3 3,157.4 3,366.8 3,462.4 1,062.4 1,124.2 Tax revenues 12,757.9 13,937.4 12,955.4 3,472.0 3,653.3 3,058.9 3,164.5 3,279.0 3,453.0 2,983.4 3,189.2 3,186.0 1,010.3 1,076.2 Taxes on income and profit 2,917.7 3,442.2 2,805.1 806.5 834.7 707.3 617.5 735.5 744.8 635.5 594.4 554.5 218.1 195.9 Social security contributions 4,598.0 5,095.0 5,161.3 1,272.9 1,364.8 1,285.3 1,280.9 1,260.6 1,334.5 1,274.4 1,303.8 1,293.5 428.1 433.1 Taxes on payroll and workforce 418.1 258.0 28.5 63.5 72.9 7.4 7.2 6.2 7.7 6.3 7.2 6.5 2.3 2.4 Taxes on property 206.4 214.9 207.0 69.6 55.2 20.6 51.5 74.6 60.2 24.1 58.9 76.7 7.4 7.9 Domestic taxes on goods and services 4,498.6 4,805.3 4,660.2 1,227.8 1,296.4 1,015.4 1,177.5 1,184.2 1,283.1 1,023.9 1,199.2 1,231.6 346.2 424.3 Taxes on international trade & transactions 117.1 120.1 90.5 31.0 29.8 22.5 29.2 17.2 21.7 18.7 24.7 22.5 8.1 12.4 Other taxes 2.1 1.8 2.9 0.7 -0.6 0.5 0.7 0.7 1.0 0.5 1.0 0.7 0.2 0.2 Non-tax revenues 709.2 854.9 684.1 261.8 250.1 145.1 158.4 191.3 189.3 174.1 177.6 276.5 52.2 48.0 Capital revenues 136.6 117.3 106.5 28.8 33.6 14.1 29.7 19.3 43.5 9.8 17.9 26.1 5.3 3.9 Grants 11.9 10.4 11.1 3.1 3.1 2.9 1.7 1.9 4.7 2.9 2.2 2.5 1.9 0.8 Transferred revenues 42.5 53.9 54.3 0.6 51.3 0.2 1.5 1.1 51.5 0.5 2.3 3.8 0.1 0.4 Receipts from the EU budget 348.0 365.4 596.5 91.3 115.3 61.8 186.9 66.2 281.5 139.5 87.8 155.1 22.4 70.6 GENERAL GOVERNMENT EXPENDITURES TOTAL EXPENDITURES 13,915.5 15,441.7 16,368.2 3,628.8 4,631.4 3,877.1 4,064.6 3,767.1 4,659.5 4,035.1 4,122.7 3,948.1 1,348.8 1,255.5 Current expenditures 5,950.9 6,557.5 6,797.3 1,513.7 1,886.2 1,768.8 1,682.7 1,578.1 1,771.3 1,795.2 1,757.3 1,637.0 647.6 569.3 Wages, salaries and other personnel expenditures 3,276.9 3,578.9 3,912.3 892.5 959.8 965.0 1,005.6 955.4 985.9 956.5 1,012.6 963.6 326.6 312.7 Expenditures on goods and services 2,212.2 2,527.5 2,506.8 586.1 829.0 547.1 618.0 603.9 741.4 556.7 624.8 587.8 196.0 212.7 Interest payments 357.0 335.2 335.9 12.9 31.5 246.7 48.4 12.0 29.0 272.6 110.0 76.4 122.3 41.7 Reserves 104.8 116.0 42.3 22.2 65.9 10.0 10.9 6.8 14.9 9.4 9.9 9.2 2.8 2.3 Current transfers 6,143.9 6,742.2 7,340.3 1,567.3 1,828.2 1,748.2 1,936.1 1,736.9 1,918.2 1,849.0 1,995.1 1,810.9 594.5 571.1 Subsidies 423.4 476.5 597.9 57.7 115.3 165.0 126.9 86.5 219.4 160.7 122.8 103.7 45.3 31.3 Current transfers to individuals and households 5,093.3 5,619.2 6,024.1 1,344.8 1,522.0 1,436.2 1,614.8 1,475.9 1,497.6 1,529.0 1,671.1 1,514.7 492.5 487.2 Current transfers to non-profit institutions, other current domestic transfers 595.3 598.3 679.5 153.2 175.2 140.0 178.5 164.5 195.1 150.7 188.6 183.4 52.7 51.0 Current transfers abroad 32.0 48.2 38.9 11.6 15.7 7.0 15.9 9.9 6.1 8.7 12.6 9.1 4.1 1.5 Capital expenditures 1,130.5 1,255.5 1,293.3 350.0 540.6 175.3 237.2 297.5 584.1 192.8 212.5 320.9 57.4 65.6 Capital transfers 334.3 458.6 495.2 130.8 234.9 35.9 112.9 86.0 259.9 47.5 90.1 82.0 16.8 17.1 Payments to the EU budget 355.9 427.9 439.3 67.0 141.5 148.9 95.6 68.7 126.1 150.6 67.8 97.3 32.4 32.4 SURPLUS / DEFICIT 90.6 -102.5 -1,961.4 - - - - - Source of data: MF Bulletin. Note: in line with the changed methodology of the International Monetary Fund of 2001, social security contributions paid by the state are not consolidated. Data prior to 2007 are recalculated on the basis of the irrevocable SIT/EUR exchange rate = 239.64. 2009 2010 5 1 6 1 7 1 8 1 9 1 10 1 11 1 12 1 |2|3|4|5|6|7|8|9|10 1,102.2 1,240.7 1,285.0 1,182.6 1,091.2 1,241.3 1,364.0 1,418.1 1,076.9 1,164.2 1,069.1 1,083.1 1,146.4 1,247.5 1,183.6 1,286.2 1,180.1 1,188.3 1,047.1 1,151.5 1,240.6 1,157.6 1,072.2 1,218.5 1,170.6 1,253.2 1,047.8 1,116.0 993.6 1,062.1 1,113.2 1,191.5 1,110.0 1,232.7 1,119.7 1,132.5 996.5 1,091.7 1,194.2 1,087.7 997.1 1,164.1 1,113.3 1,175.5 994.1 1,053.8 935.4 1,000.9 1,057.0 1,131.4 1,027.0 1,103.3 1,055.6 1,073.1 229.5 192.1 291.4 233.6 210.4 234.2 232.4 278.2 224.3 219.9 191.3 108.0 210.0 276.4 114.1 226.9 213.4 218.8 423.8 423.9 424.5 417.3 418.8 428.7 426.3 479.5 424.0 414.6 435.7 437.4 431.5 434.8 432.7 428.8 432.0 434.9 2.3 2.4 2.6 1.7 1.9 2.4 2.5 2.9 2.1 2.0 2.2 2.5 2.2 2.5 2.6 1.9 2.0 2.6 15.8 27.9 22.6 34.6 17.4 17.1 30.4 12.7 6.7 8.6 8.8 9.7 31.2 18.0 24.7 27.4 24.6 13.7 316.7 436.5 445.4 395.4 343.5 474.0 413.3 395.8 331.1 401.7 291.0 434.8 373.4 391.1 444.4 411.2 376.1 393.8 8.2 8.6 7.4 5.1 4.7 7.4 8.1 6.1 5.7 6.9 6.1 8.3 8.4 8.1 8.4 6.8 7.3 9.2 0.2 0.3 0.2 0.1 0.4 0.3 0.3 0.3 0.1 0.1 0.3 0.2 0.3 0.5 0.2 0.2 0.3 0.1 50.6 59.8 46.4 69.8 75.1 54.3 57.3 77.7 53.8 62.1 58.2 61.2 56.2 60.1 83.0 129.4 64.1 59.5 15.5 10.4 8.2 6.4 4.7 6.8 9.2 27.5 2.3 2.7 4.9 7.3 5.3 5.3 9.4 13.5 3.3 7.3 0.2 0.8 0.9 0.2 0.8 1.0 1.0 2.7 0.2 0.2 2.5 0.8 1.0 0.3 1.1 1.0 0.5 1.2 0.1 1.0 0.6 0.1 0.4 0.5 49.3 1.7 0.1 0.2 0.3 0.9 0.6 0.8 2.0 0.9 0.9 0.6 39.3 77.0 34.7 18.4 13.1 14.5 133.9 133.1 26.5 45.1 67.9 12.0 26.3 49.5 61.2 38.1 55.8 46.7 1,478.1 1,330.9 1,249.6 1,264.6 1,252.9 1,402.4 1,443.7 1,813.4 1,307.3 1,372.1 1,355.7 1,322.7 1,464.6 1,335.5 1,302.9 1,272.4 1,372.8 1,373.6 580.8 532.6 539.0 535.4 503.7 557.2 542.0 672.1 520.0 631.6 643.6 613.9 594.5 548.9 529.6 529.0 578.4 558.2 374.0 318.9 325.6 318.1 311.7 325.4 323.6 336.9 316.7 315.2 324.7 313.9 377.2 321.5 319.7 324.8 319.1 329.2 202.2 203.1 207.1 213.2 183.6 206.1 213.8 321.5 170.8 179.2 206.7 193.4 211.9 219.6 203.4 200.5 183.9 204.2 1.9 4.8 4.4 1.7 6.0 21.6 1.7 5.8 28.7 134.5 109.4 104.0 1.5 4.6 4.0 0.9 71.5 21.9 2.7 5.9 1.9 2.4 2.4 4.2 2.9 7.8 3.9 2.7 2.8 2.7 3.9 3.3 2.5 2.8 4.0 2.9 761.3 603.8 583.7 570.0 583.1 591.2 652.6 674.4 651.3 578.4 619.2 612.0 753.2 629.9 608.7 590.1 612.0 624.4 54.7 40.9 27.3 22.6 36.6 38.4 97.7 83.4 111.1 22.6 27.0 39.7 42.2 40.9 39.3 27.6 36.8 46.4 643.7 483.9 492.1 496.7 487.0 491.7 497.7 508.3 495.1 506.0 527.9 510.2 647.4 513.6 509.1 501.2 504.4 516.8 56.3 71.2 62.1 49.6 52.9 59.0 55.7 80.3 42.5 48.3 59.8 60.2 60.3 68.0 59.0 59.4 64.9 58.1 6.6 7.8 2.2 1.1 6.7 2.2 1.5 2.4 2.6 1.6 4.5 1.9 3.2 7.5 1.4 1.9 5.8 3.1 84.1 87.4 87.5 101.9 108.1 119.3 147.4 317.3 73.6 60.9 58.3 58.6 67.2 86.7 108.0 99.7 113.2 115.6 27.8 68.0 22.7 28.1 35.1 82.3 68.2 109.4 19.1 14.1 14.3 18.6 19.5 52.0 25.6 22.1 34.3 40.3 24.1 39.1 16.7 29.1 22.8 52.4 33.4 40.3 43.3 87.0 20.3 19.6 30.2 17.9 30.8 31.6 34.9 35.1 - - - - - - - - - Acronyms Acronyms in the text ACEA - European Automobile Manufacturers'Association, BS - Bank of Slovenia, EC - European Commission, ECB -European Central Bank, EIA - Energy Information Administration, ESS - Employment Service of Slovenia, GDP - Gross domestic product, HICP-Harmonised Index of Consumer Prices, IAADP - Internal Administrative Affairs Directorate, IMAD - Institute of Macroeconomic Analysis and development, IMF - International Monetary Fund, MF - Ministry of Finance, NFI - Non-monetary Financial Institutions, OECD - Organization for Economic Cooperation and Development, PPA - Public Payments Administration of the Republic of Slovenia, RS - Republic of Slovenia, RULC - Real Unit Labour Costs, SCA - Standard Classification of Activities, SMARS - Surveying and mapping Authority of the Republic of Slovenia, SORS -Statistical Office of the Republic 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 of recorded 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 of motor 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,steam and air conditioning supply,E-Water supplysewerage, 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, IT-Italy, IL-Israel, IE-Ireland, 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 December 2010, No. 12. Vol. XVI