.^'IMAD O fü Q) £ u £ o o Ü) o u 0) >< d m cB ^ cu _Q E cu cu LO Slovenian Economic Mirror ISSN 1318-3826 No. 9 / Vol. XIX / 2013 Publisher: IMAD, Ljubljana, Gregorčičeva 27 Responsible Person: Boštjan Vasle, MSc, Director Editor in Chief: Ana T. Selan, MSc Authors of Current Economic Trends (listed alphabetically): Jure Brložnik, Urška Brodar, Gonzalo Caprirolo, Janez Dodič, Lejla Fajič, Marjan Hafner, MSc, Matevž Hribernik, Slavica Jurančič, Mojca Koprivnikar Šušteršič, Janez Kušar, Urška Lušina, MSc, Jože Markič, PhD, Helena Mervic, Tina Nenadič, MSc, Mitja Perko, MSc, Jure Povšnar, Ana T. Selan, MSc, Dragica Šuc, MSc Author of Selected Topic: Matevž Hribernik (WEF Global Competitiveness Report 2013-2014); Valerija Korošec, PhD (At-risk-of-poverty and material deprivations rates in 2012) Editorial Board: Lidija Apohal Vučkovič, Marijana Bednaš, MSc, Alenka Kajzer, PhD, Rotija Kmet Zupančič, MSc, Janez Kušar, Boštjan Vasle, MSc Translator: Marija Kavčič Data Preparation and Graphs: Bibijana Cirman Naglič, Marjeta Žigman Concept and Design: Katja Korinšek, Pristop DTP: Bibijana Cirman Naglič Print: SURS Circulation: 80 copies © The contents of this publication may be reproduced in whole or in part provided that the source is acknowledged. Contents In the spotlight................................................................................................................................................................3 Current economic trends..............................................................................................................................................5 International environment...............................................................................................................................................7 Economic developments in Slovenia.............................................................................................................................8 Labour market..................................................................................................................................................................14 Prices..................................................................................................................................................................................16 Balance of payments.......................................................................................................................................................18 Financial markets.............................................................................................................................................................19 Public finance....................................................................................................................................................................22 Boxes Box 1: Market shares in the first half of 2013..............................................................................................................10 Box 2: Real estate market - Q2 2013.................................................................................................................................12 Box 3: Main aggregates of the general government sector, ESA 95................................................................................23 Selected topics WEF Global Competitiveness Report 2013-2014......................................................................................................29 At-risk-of-poverty and material deprivations rates in 2012....................................................................................30 Statistical appendix.....................................................................................................................................................33 On January 2008, the new classification of activities of business entities NACE Rev.2, which replaced NACE Rev. 1.1, came into force in all EU Member States. In the Republic of Slovenia, the national version of the standard classification, SKD 2008, which includes the entire European classification of activities but also adds some national subclasses, came into force on the mentioned date. In the Slovenian Economic Mirror, all analyses are based on the SKD 2008, except when the previous SKD 2002 classification is explicitly referred to. More general information about the introduction of the new classification is available on the SURS website http://www.stat.si/eng/ skd nace 2008.asp. All seasonally adjusted data in the Economic Mirror are calculations by IMAD. In the spotlight The indicators of economic activity in the euro area show a slight deterioration at the beginning of the second half of the year, while the confidence and business climate indicators indicate an improvement in the coming months. Amid an increase in construction output and a stagnation of turnover in retail trade, manufacturing production dropped substantially in the euro area in July, reaching the lowest level this year. A significant decline in manufacturing was recorded particularly by Germany, following June's growth. On the other hand, the confidence and business climate indicators (PMI, ESI, Ifo, Zew) continue to indicate improvement in economic activity in the euro area in the months ahead. In view of improved expectations, the ECB revised upwards its forecast for this year's decline in euro area GDP to -0.4% (previously -0.6%). At the beginning of the second half of 2013 most values of short-term indicators of economic activity in Slovenia were similar to those at the beginning of the year. Only real exports of merchandise rose in July, and this was the only indicator to exceed the average value in 2008. Manufacturing output, having stagnated in the second quarter, declined slightly in July, mainly due to a fall in low-technology industries. The value of construction put in place also dropped, but it had been strengthening in preceding months and was up year-on-year for the first time since the end of2008 regardless of July's decline. After strong growth in June, bolstered by larger purchases in anticipation of the increase in VAT, in July activity also dropped in some sectors that are mainly oriented to the domestic market; sales revenues in service activities and retail trade also declined. After the strong deterioration at the beginning of the year, the tightening of labour market conditions has eased somewhat in recent months; the average gross earnings per employee remained unchanged in July (seasonally adjusted), being only slightly higher than a year earlier. The number of employed persons according to the statistical register rose modestly in July for the second consecutive month (0.1%, seasonally adjusted), while it was down 2.2% year-on-year. The registered unemployment rate has remained unchanged ever since the beginning of the year (13.1%, seasonally adjusted), but the number of registered unemployed rose in August (seasonally adjusted), reaching 116,600 by the end of the month. The average gross earnings in the private sector remained unchanged in July (seasonally adjusted), as they had in the last and a half years. After June's decline, brought about by new austerity measures, government sector earnings also maintained the previous month's level, while earnings in the public sector rose slightly due to wage growth in public corporations. Consumer prices increased 0.3% in September, being up 1.4% from September 2012. Monthly inflation was significantly impacted by seasonal factors, primarily higher prices of clothing and footwear and lower prices of holiday packages. Year-on-year price growth was mainly underpinned by higher prices of services and food products, but it was also partly due to energy price rises, though their contribution was much smaller than a year earlier. Weak economic activity and adverse labour market conditions continue to be reflected in moderate movements of core inflation. Year-on-year inflation in the euro area was 1.1% in September, according to Eurostat's flash estimate. The deterioration in the quality of bank claims in the Slovenian banking system has accelerated in recent months. The decline in the stock of domestic bank loans to domestic non-banking sectors in August was the smallest this year, but loans to domestic non-banking sectors nevertheless shrank by EUR 1.2 bn in the first eight months, which is nearly four times as much as in the same period last year. The banks continue to make net repayments of liabilities abroad; household deposits declined again, while the stock of government deposits rose. The stock of bad claims in the Slovenian banking sector has increased substantially in recent months, by EUR 260 m in July alone. The proportion of bad claims reached 16.9% of the banking sector's total claims, 2.9 percentage points more than at the end of last year. In view of the more pronounced deterioration in the quality of their assets, the banks are increasingly creating provisions and impairments, which were up as much as EUR 675.6 m in the first eight months of this year, nearly 5% more than in the same period of 2012. The widening trend of the general government deficit reverted in July on account of higher revenue. This was primarily the result of much higher non-tax revenues and slightly higher revenues from value added tax. In the first seven months general government revenue was 3.7% lower than in the same period last year. Expenditure was also somewhat lower in the first seven months (-0.3%), but the rate of decline (year-on-year) has been decreasing since March. The general government deficit in 2012 is estimated at 3.8% of GDP, according to the most recent data by SURS, which is not significantly different from the first estimate in March this year (-0.1 percentage points). It was EUR 943 m or 2.5 percentage points of GDP lower than in 2011. The deficit declined as a result of a substantial reduction in government expenditure (by EUR 1.1 bn) and slightly lower revenue (by EUR 138 m). According to the quarterly non-financial sector accounts, the general government deficit totalled EUR 1,243 m in the first half of 2013. The deficit in the first half of the year was up year-on-year, due to bank recapitalisation in the total amount of EUR 441 m. Excluding recapitalisation, it would stand at EUR 801 m (EUR 761 m in the same period of 2012). Slovenia slipped significantly down the WEF global competitiveness scale again (by six places to 62nd), and also deteriorated its position among the EU Member States (by two places to 23rd). Itremains one of the countries that have deteriorated their rankings significantly since the beginning of the crisis. Among EU countries, Slovenia fell from the EU average to the last quarter of all Member States in this period. It slipped in two of three categories of competitiveness this year, in efficiency enhancers and in the category of innovation and business sophistication factors. The main barriers to business operations remain similar to previous years, with managers highlighting limited access to financing, inefficient government bureaucracy and restrictive labour regulations in particular. In comparison with the preceding year, more respondents also cited corruption and political and government instability as an obstacle in the business environment. ■o £ Q) E o £ 0 u 01 £ 01 3 U International environment The short-term indicators of economic activity in the euro area show a slight deterioration at the beginning of the second half of the year, but the confidence and business climate indicators indicate an improvement in the coming months. In July construction output rose for the fourth consecutive month (0.3%, seasonally adjusted), while turnover in retail trade remained at a similar level as in June (0.1%, seasonally adjusted). Manufacturing production declined by 1.5% (seasonally adjusted), reaching the lowest level this year. Among Slovenia's main trading partners, a significant fall in manufacturing production was, after June's growth (1.9%), recorded particularly by Germany (-2.1%), which also saw a decline in orders (-2.7%, seasonally adjusted).1 The manufacturing PMI2 and the estimates of new orders nevertheless still indicate improvement in economic activity in Germany and other euro area countries. The values of other confidence and business climate indicators (ESI, PMI, Ifo, Zew) also rose again in August and September. Improved expectations regarding economic activity are also reflected in the revised forecasts of the ECB, which reduced the projection for this year's GDP decline in the euro area by 0.2 percentage points in September. Real GDP is expected to decline by 0.4% (between -0.6% and -0.2%). Figure 1: Manufacturing PMI —•—Euro area -Germany -----Italy -----France 65 -Austria 55 50 45 a 1 'Iß ,1 T ^ijr ft/' 'f T r r T 1 r r T V" Source: Markit Economics. Note: PMI readings above 50 signal an increase in production, while readings below 50 indicate a decrease. The required yields of government bonds rose in the majority of euro area countries in September. The yields of the most vulnerable countries were up, and so were the yields of countries with the highest credit rating of AAA. Government bond yields of the countries with the highest credit rating continue the upward trend seen 1 After the 5% increase in June, the decline in orders in manufacturing was expected. It is mainly a consequence of foreign orders (-4.5%), while domestic orders remained practically unchanged (-0.3%). 2 Purchasing Managers Index. since May this year, when the Fed announced its intent to reduce its monthly purchases of bonds. The increase3 was also due to releases of positive economic data for the euro area (GDP, PMI). Figure 2: Yields on ten-year government bonds !E lÜ a 10 ü 8 - 0 o. J3 Source: Bloomberg. o. J3 Interbank interest rates in the euro area were kept basically unchanged again in September and remain very low. The three-month EURIBOR rate remained almost unchanged (0.223%), down 2 basis points year-on-year. The 3-month USD and CHF LIBOR rates also remained almost unchanged relative to August (0.25% and 0.02%), as did the interest rates of main central banks (ECB, Fed, BoE, BoJ). The euro appreciated somewhat against the US dollar in September (0.3%; USD 1.335 to EUR 1). It also gained value against the Japanese yen (1.6%, to JPY 132.41 to EUR 1), while depreciating against the British pound sterling (-2.0%, to GBP 0.842 to EUR 1) and remaining unchanged against the Swiss franc (CHF 1.234 to EUR 1). Dollar prices of oil rose somewhat again in September, while prices of non-energy commodities remained unchanged. The average price of Brent crude oil rose by 0.3% to USD 111.6 a barrel in September (expressed in euros, by 0.6% to EUR 83.01 a barrel). At the beginning of September it exceeded USD 117 a barrel, coming close to this year's highs.4 Dollar prices of oil were down 1.1% year-on-year; euro prices down 4.6%. Dollar prices of non-energy commodities declined again in August, according to the most recent IMF figures. The decline was mainly attributable to lower prices of food (-5.2%) and slightly lower prices of agricultural 3 Because of improved economic prospects and expectations, investors shift away from 'safe' investments in government bonds with the highest credit rating (such as the German bond) towards higher-risk, but more profitable, investments. 4 Mainly due to the deterioration of the situation in Syria. Figure 3: Prices of Brent crude oil and USD/EUR exchange rate Table 1: Selected monthly indicators of economic activity in Slovenia -Price in EUR (left axis) -Price in USD (left axis) - USD/EUR exchange rate (right axis) Source: ECB, EIA; calculations by IMAD. commodities (-1.2%). According to provisional data, no major changes in non-energy commodity prices are expected in September. Economic developments in Slovenia At the beginning of the second half of 2013 the values of short-term indicators of economic activity in Slovenia were similar to those at the beginning of the year. Only exports of merchandise rose in real terms in July and were the only exports to exceed the average value in 2008. In the first seven months their year-on-year growth was underpinned primarily by exports of medical and pharmaceutical products, and exports, i.e. re-exports, of Figure 4: Short-term indicators of economic activity in Slovenia g 110 ^ 100 - Merchandise exports - Industrial production in manufacturing Construction put in place Turnover in retail trade 80 70 40 in % 2012 VII 13/ VI 13 VII 13/VII 12 I-VII 13/ I-VII 12 Exports1 1.9 8.6 5.8 2.5 -goods 0.8 6.3 6.5 1.8 -services 6.7 17.9 3.5 5.3 Imports1 -2.6 9.2 1.0 -3.1 -goods -3.0 6.9 2.8 -3.2 -services -0.1 23.4 -8.0 -2.5 Industrial production -1.1 -0.52 0.03 -1.23 -manufacturing -2.3 -0.92 -0.33 -1.93 Construction -value of construction put in place -16.8 -0.52 0.53 -13.93 Real turnover in retail trade -2.4 -2.82 -5.83 -4.03 Nominal turnover in market services (without trade) -2.8 -2.82 -1.53 -1.23 Sources: BS, Eurostat, SURS; calculations by IMAD. Notes: 1balance of payments statistics, 2seasonally adjusted, 3working-day adjusted data. oil. Exports of the majority of other main manufacturing goods were down year-on-year. Manufacturing output was also lower year-on-year in the first seven months. Having stagnated in the second quarter, it dropped slightly in July, as it had in the year as a whole, mainly due to a fall in low-technology industries. The value of construction put in place also declined but, having been strengthening in preceding months, it was up year-on-year for the first time since the end of 2008. After June's growth, bolstered by larger purchases in anticipation of the increase in VAT, in July activity also dropped in some sectors that are mainly oriented to the domestic market; sales revenues in service activities and retail trade also declined. The sentiment indicator has improved visibly this year, but is still much lower than before the crisis. Having increased by 1.3% in July, seasonally adjusted, real merchandise exports were up 2.2% year-on-year in the first seven months of 2013.5 This year's year-on-year growth was, according to the available data,6 mainly a result of growth in exports to Russia and extra-EU countries (in particular Ukraine, Australia and China), while exports to the EU and the former Yugoslav republics were down somewhat relative to the same period of last year.7 Looking at Slovenia's main trading partners in the EU, exports to Germany, France and Croatia were lower year-on-year in 2013, while exports to Italy, Austria and some new EU Member States (the Czech Republic, Slovakia and Hungary) were up. Broken down by product groups, the overall year-on-year growth was mainly underpinned by Source: SORS; calculations by IMAD. 5 IMAD's estimate of real merchandise exports, made on the basis of nominal exports according to the external trade statistics and industrial producer prices on the foreign market. 6 Nominal data on the structure of merchandise exports are available for six months. 7 With Croatia's accession to the EU, Croatia's status in the statistical monitoring of merchandise trade between Slovenia and Croatia changed. To ensure the comparability of data, we (the same as SURS) take into account that Croatia has been an EU Member State since January 2012, even though it was not yet in the EU at that time. 1.8 1.6 1.4 80 1.2 60 1.0 40 20 90 60 50 exports of medical and pharmaceutical products and exports, i.e. re-exports, of oil. Exports of most other main manufacturing products were down again year-on-year in 2013, with the largest negative contributions to total growth coming from exports of road vehicles, electrical equipment and iron and steel. This year's year-on-year decline in most exports of the manufacturing sector was, in our estimation, mainly attributable to the decline in import demand in the EU, where Slovenia exports nearly three quarters of manufactured goods (see Box 1, Market shares in the first half of 2013).8 Figure 5: Nominal exports to selected trading partners I-VI 2013/I-VI 2012 15 DE IT AT HR (21.2) (11.3) (8.2) (6.4) FR (5.5) RU CZ HU SK (4.5) (2.8) (2.6) (1.8) Source: SURS. Note: * in the brackets, the share in total merchandise exports in 2012. Real merchandise imports declined in July (-0.5%, seasonally adjusted), and were down 0.4% year-on-year in the first seven months.9 This year's year-on-year fall in imports was smaller than last year, mainly as a result of growth in imports of investment goods (13.9%) related to imports of equipment for the construction of an energy facility. Imports of consumer goods were somewhat higher than last year, primarily due to year-on-year growth in imports of passenger cars in the second quarter (29.6%). In contrast, the year-on-year decline in intermediate goods (-3.8%) was much more pronounced than last year, chiefly as a result of lower imports of automotive fuels, which last year recorded growth. Nominal exports and imports of services dropped in July due to a decline in trade in other business services (seasonally adjusted).10 After the decline in the second quarter, exports dropped further in July, again primarily due to a substantial decline in exports of other business services. The latter were also down year-on-year in July, 8 Manufactured products are commodities classified in SITC sections 5-8 (chemicals and related products, manufactures classified by material, machinery and transport equipment and miscellaneous manufactured articles). 9 IMAD's estimate, made on the basis of nominal imports according to the external trade statistics and import prices. Nominal data on the structure of merchandise imports are available for six months. 10 According to the balance of payments statistics. Figure 6: Merchandise imports by end-use product groups ■ Consumer goods (left axis) ■ Intermediate goods (left axis) ■ Investment goods (left axis) ♦Total (right axis) Q1 12 Q212 Q312 Q412 Q113 Source: SURS; calcualtions by IMAD. Q2 13 for the first time in a year. Together with exports of construction services, they nevertheless remained the main driver of the otherwise slightly slower year-on-year growth in services exports in the first seven months (5.3%, according to original data). July's fall in imports was mainly caused by a decline in imports of other business services and lower imports of other services.11 In the first seven months imports were down year-on-year (-2.5%, orig.) largely due to lower imports of licences, patents and copyrights, other business services and travel, while the total decline was mitigated by growth in imports of construction services. Figure 7: Nominal trade in services 135 Source: BS; calcualtions by IMAD. 11 When adjusting data for seasonal effects, we include communication, construction, financial, computer and information activities, personal service activities, arts, entertainment and recreation activities, government services, insurances and licences, patents and copyrights into the group of other services. Together, they account for just over a tenth of services exports and almost a third of services imports. Box 1: Market shares in the first half of 2013 In the first two quarters of 2013 Slovenia's share on the global market of goods (1.9 %) increased mainly on the back of growth in its market shares in the EU.1 The growth of the Slovenian market share in the EU (3.9%), following the decline in 2012, was primarily a result of increased shares in Italy, Austria and France, as well as in the Czech Republic, Poland and Hungary. The market share in Germany, Slovenia's main trading partner, declined again this year after two years of growth. On other, relatively less important, markets it remained just above the comparable last year's level.2 Among main extra-EU partners, the Slovenian market share expanded in Russia and Macedonia, amid a concurrent decline in Croatia, Bosnia and Herzegovina and the US. Figure 8: partners Slovenia's market shares in main trading 114 partners -EU -8 -Extra EU -6 0.40 0.35 0.30 In the first two quarters of 2013 growth in the market share of Slovenian goods in the EU was largely driven by medical and pharmaceutical products, oil and oil derivatives and electricity. The market share of chemicals increased as a result of larger shares of medical and pharmaceutical products.3 Their growth was also decisive for the otherwise modest growth of manufactured goods (0.4%). After a more pronounced decline in 2010-2012,4 the market share of machinery and transport equipment rose again, due to growth in electrical machinery, apparatus and appliances, power generating machinery and equipment, machinery specialised for particular industries and road vehicles. The market share of miscellaneous goods remained at a comparable last year's level, mainly due to a larger share of miscellaneous manufactured articles.5 The market share of manufactures classified by material declined as 0.25 0.20 0.15 cu U! o ^ rN m ro ro ro r- r- r- r- cS cS cS cS cS cS cS Source: SURS, Eurostat, WIIW, U.S. Census Bureau; calculations by IMAD. Figure 9: Change in market shares in main trading partners, the 1st half of 2013 25 20 15 Source: SURS, WIIW, U.S. Census Bureau; calculations by IMAD. * Note: according to the first provisional data (WTO). Figure 10: Change in market shares in the EU by main SITC sections,6 the first half of 2013 ■ Exports Slovenia ■ Imports EU ♦Market share 25 20 15 10 1= 5 -1= 0 (D -5 -10 -15 -20 ♦......^......^...... TUi u ü;. s^ s^ Q. =! E p -s iS >2 != a > (^CC-o ____ ™ LL Source: SURS, Eurostate; calculations by IMAD. Note: * SITC 33: exports 51%, share 62%; **SITC 35: 25% and 35%, resp. 1 As the analysis refers to the first half of this year, Croatia is not included among the EU Member States. 2 Under the influence of market share growth in Slovakia, Spain, Greece, Belgium, Ireland, Portugal, Sweden and Luxembourg. 3 And to a lesser extent, materials for dyeing and tanning, and plastic products. 4 The more pronounced decline in the market share of machinery and transport equipment in the EU in 2010-2012 (by more than a tenth) was a consequence of a more notable decline in the share of road vehicles (by around a quarter) when the incentives to stimulate car purchases began to be phased out in 2010, which also contributed to a larger decline in the Slovenian market share in France in this period (by around a third). 5 As well as scientific and controlling instruments, clothing and footwear. 6 Accounting for 2% or greater shares in total merchandise exports in the EU in 2011. 51 ij 10 0 a result of smaller shares of rubber manufactures, textile yarn, fabrics and textile products, and iron and steel.7 The market share of primary products rose by almost a quarter, mainly under the impact of oil and oil products and electricity.8 Growth in the market share in the EU indicates that Slovenia's export competitiveness on this market ceased to decline in 2013. Modest nominal growth in goods exports to the EU (0.3%) and the nominal decline in manufacturing exports, in particular, were thus mainly a result of a decline in import demand from the EU, given that at the same time their shares on this market increased. Chemical products were the only section of manufactured goods where import demand from the EU remained comparable to that in 2012, while growth in Slovenia's market share stemmed from simultaneous growth in our exports. All other sections faced a decline in import demand, and their exports more or less declined. 7 Despite the simultaneous growth of the shares of paper and cardboard, non-ferrous metals and other metal products. 8 Growth was a consequence of increased trading in these commodities in recent years, most of which was not due to changes in the structure of domestic production. Manufacturing output, having stagnated in the second quarter, declined in July. The decline is attributable to a fall in low-technology industries, whose production has otherwise hovered at similar levels since the end of last year. Production remained almost unchanged in medium-low-technology industries, where it started to shrink again after Q1 growth. Production increased slightly only in industries of higher technology intensity. With monthly fluctuations, it has been roughly unchanged since mid 2012 (seasonally adjusted). In the first seven months manufacturing production was down 1.9% relative to the same period of last year, mainly due to lower production in all low-technology industries. Production volume was also down relative to the same period of last year in some medium-low- and medium-high- and high-technology industries. Figure 11: Production volume in manufacturing industries according to technology intensity 10 S3 5 ^^ 0 -10 ^^ -20 Medium-high-and high-tech industries Source: SURS; calculations by IMAD. Following Q2 growth, sales revenues in manufacturing also declined in July. In the first seven months they were 1.6% lower than a year earlier. Revenues from domestic sales, which have risen slightly in recent months (seasonally adjusted), remained lower than in the same period of last year (-5.3%). They were up year-on-year only in some industries of higher technology intensity.12 Sales revenues abroad in the first seven months were similar to those a year before. Revenues from sales in the euro area were down year-on-year for the second year in a row (-2.4%), while revenues outside the euro area were up relative to the same period last year (3.6%). Sales revenues on foreign markets increased in year-on-year terms in all medium-low-technology industries and in some low-13 and medium-high and high-technology industries.14 Figure 12: Sales revenues in manufacturing according to geographical orientation - Overall Domestic market ■ Foreign market 75 70 65 ■4.....j...... .....f... ..4.....4..... •4.....i...... .....f—f..... .....4......f..... .....1-----1..... .....i Source: SURS; calculations by IMAD. The value of construction put in place declined somewhat in July (seasonally adjusted), but was nevertheless up year-on-year (0.5%) for the first time since the end of2008. Amid substantial monthly fluctuations, in recent months activity has strengthened in the construction of civil engineering and non-residential buildings, while declining in the construction of residential buildings. In July construction activity was up relative to the same month of last year. The value of construction works thus picked up year-on-year for the first time since October 2008. In the manufacture of other machinery and equipment and in the manufacture of transport vehicles. 13 In the manufacture of food products and in the paper industry. 14 In the chemical and (in our estimation) pharmaceutical industry, and in the manufacture of ICT and electrical equipment. ' 13: Value of construction put in place Total Residential buildings Non-residential buildings — Civil-engineering works ^^ Source: SURS; calculations by IMAD. Box 2: Real estate market - Q2 2013 The value of the stock of contracts in the construction sector surged in July. It was up 36.2% year-on-year, of which by 66.4% in civil-engineering works, which is attributable to the vigorous construction of municipal infrastructure boosted by EU funds. Data on business trends in construction show similarly favourable developments. The indicator of total orders has strengthened significantly this year, recording a new high since the beginning of the crisis in September. The prospects for future construction activity thus remain positive. After the increase in June before the rise in VAT, turnover in trade declined in July, as expected, and recorded the lowest level since 2008 (seasonally adjusted). It dropped in all trade sectors, most notably in those where it had increased the most in June. Turnover in the sale and repair of motor vehicles thus dropped by more than a tenth; in specialised stores selling furniture, household appliances, construction material, and audio and video recordings by 17.2%. Turnover in wholesale trade also recorded a relatively strong decline in July and - as turnover in the sale of motor vehicles - almost reached the level of the first quarter this year. The number of dwelling transactions rose slightly in the second quarter but remained low. According to SURS data, the number of transactions in existing flats, which account for around two thirds of total dwelling transactions, rose slightly in the second quarter after the decline in 2012 as a whole and at the beginning of this year, but was almost a tenth lower than a year earlier. The number of transactions in other types of dwellings (new houses in particular) also rose, but was still very low. In the second quarter dwelling prices rose slightly, but remained lower than in the same period last year. After last year's 10% decline, prices of new flats rose for the second quarter in a row and were the only dwelling prices that also went up year-on-year. Prices of existing flats remained similar to the previous quarter, mainly due to a decline in Ljubljana. Prices of newly built houses dropped further and were nearly a quarter lower than the highest value in 2008. Figure 14: Transactions in existing and newly built flats and houses - Transactions in existing flats - Transactions in newly-built fats ■ Transactions in existing houses ----Transactions in new houses a a a a a Source: SURS; calculations by IMAD. Figure 15: Prices of existing and newly built flats and houses - Prices in existing flats - Prices in newly-built fats Prices in existing houses ----Prices in new houses a a a a a Source: SURS; calculations by IMAD. Figure 16: Turnover in trade sectors ■ Retail trade, real of which automotive fuels, real Sale, repair of motor vehicles, real - Wholesale trade, nom. Source: SURS; calculations by IMAD. After increasing strongly in June (4.2%, seasonally adjusted), nominal turnover in market services (excluding trade)15 declined substantially in July (-2.8%, seasonally adjusted). The trend of modest growth observed since last autumn continues, and the significant swings in the above-mentioned months (the largest since the beginning of the crisis) mainly have to do with the increase in VAT. Amid growth in the number of tourist overnight stays, turnover increased slightly only in accommodation and food service activities, while remaining unchanged in transportation and declining in other services. In information-telecommunication activities it was down 6.1%. The largest decline in turnover in July was recorded in professional-technical services (-10.0%), with turnover Figure 17: Nominal turnover in market services (other than trade) -Total -Transportation and storage (H) -----Communication activ. (J) -----Professional, technical activ. (M) ^ -Administrative and support service activities (N) Accommodation and food service activities (I) Source: SURS; calculations by IMAD. in legal-accounting and architectural-engineering activities slipping to one of the lowest levels since 2008. In administrative and support service activities, turnover in the rising employment services exceeded the 2008 average by a tenth, while turnover in travel services reached only 70% of the 2008 level. Among main market service activities, only turnover in transportation activities remains above the pre-crisis year average. After the increase in purchases of durable and semi-durable goods before July's rise in VAT, the value of most private consumption indicators dropped at the beginning of the third quarter, as expected. In July and August the net wage bill otherwise ceased to decline, for the first time in a year, but spending on durable goods fell substantially. Real turnover in this segment16 declined notably in July (-17.2%, seasonally adjusted), after June's growth, the highest since 2002 (14.1%, seasonally adjusted). After the pronounced fall in July (by a third, seasonally adjusted), the number of first passenger car registrations by natural persons dropped further in August17 (-4.4%). In the first eight months of this year the total stock of household loans declined much more than in the same period last year (by EUR 208 m; last year EUR by 109 m), mainly due to a decline in housing loans.18 Household savings at the Figure 18: Household consumption indicators -No. of first passenger car registrations by natural persons (left axis) -Net wage bill (left axis) -Turnover in the sale of durable goods (left axis) -----Turnover in the sale of food, beverages and tobacco (left axis) • Consumer confdence indicator, seasonally adjusted (right axis) 10 ?g -10 -20 -30 -40 -50 -60 Source: SURS, MZIP; calculations by IMAD. 15 Activities from H to N (SKD 2008) subject to the Council Regulation (EC) No. 1165/98 concerning short-term statistics. 16 Turnover in the sale of furniture, household appliances, construction material, audio/video recordings in specialised stores. 17 Data on first passenger car registrations are divided into data on natural and legal persons with regard to ownership and use. Until the last instalment is paid, the owner of a passenger car acquired by a natural person through leasing is the legal entity (in this case, the natural person is included in the statistics as a user). This group also includes persons who use company-owned cars for private purposes and pay tax on this benefit. Data on the movements in the purchases of these vehicles are therefore also relevant for consumption. In the first eight months the number of first registrations of passenger cars owned by legal entities and used by natural persons increased, but the number of registrations of all new cars used by natural persons remained lower year-on-year (-8.9%). However, the decline is smaller than if only natural owners are taken into the account. 18 Down EUR 8 m; last year up EUR 89 m. 0 -70 banks also dropped. Consumer expectations improved slightly in September, but they deteriorated in the third quarter as a whole. More people assessed that their financial situation would deteriorate in the next 12 months and that the time was not right for major purchases. After the improvement in previous months, the value of the sentiment indicator remained unchanged in September. After a further increase in the second quarter, confidence was almost unchanged in most sectors in the third quarter. Only the consumer confidence indicator improved in September; in the majority of sectors confidence deteriorated only slightly and it remained unchanged only in manufacturing. Figure 19: Business trends -Economic sentiment -----Retail trade — Construction 40 Source: SURS; calculations by IMAD. Labour market After the strong deterioration at the beginning of the year, the tightening of labour market conditions has eased somewhat in recent months. The number of employed persons according to the statistical register of employment19 rose modestly in July for the second consecutive month (0.1 %, seasonally adjusted), being down 2.2% year-on-year. The increase is mainly a consequence of hiring in the construction sector, and, partly, in manufacturing and market services. The number of employed persons remained unchanged in public services, while dropping in other activities. The registered unemployment rate has remained unchanged since the beginning of the year (13.1%, seasonally adjusted). The number of registered unemployed increased further in August (0.6%, seasonally adjusted). Overall, 116,600 persons were registered as unemployed at the end of the month. In the first eight months of the year 6,918 persons 19 Employed and self-employed persons, excluding self-employed farmers. Figure 20: Employed persons according to the statistical register and registered unemployed persons -Empioyed according to the statistical register (left axis) -Registered unemployed (right axis) 860 840 "Ci i; 820 J^ != 780 o c^- 760 ^^^^ ■5 . 740 12 E 720 jrjT 1^^700 680 660 ........... ...... JJ 240 220 160 140 "H 120 II 40 Source: SURS, ESS; calculations by IMAD. registered anew, 11.5% more than in the same period last year, mainly as a result of larger inflows of those who lost fixed-term employment (4,666 persons or 8.6%) and firsttime job-seekers (2,293 persons or 38.8%). The outflow from the register was up 1,696 persons or 2.5%. More people found work (5,238 or 13.3%), particularly through public works (1,401 persons20 or 45.4%), and fewer persons were deregistered for breaches of regulations (-3,192 or -24.4%). There were also fewer transitions into inactivity (-1,025 or -11.4%). Table 2: Indicators of labour market trends in % 2012 VII 13/ VI 13 VII 13/ VII 12 I-VII 13/ I-VII 12 Labour force -1.5 -0.2 -0.6 -1.2 Persons in formal employment -1.7 0.1' -2.0 -2.7 Employed in enterprises and organisations and by those self-employed -1.6 -0.2 -2.5 -3.2 Registered unemployed -0.5 0.6^ 9.9 9.7 Average nominal gross wage 0.1 0.1' 0.8 -0.5 - private sector 0.5 0.1' 1.2 0.3 - public sector -0.9 0.5- 0.3 -1.7 -of which general government -2.2 -0.1' -1.9 -3.3 2012 VII 12 VI 13 VII 13 Rate of registered unemployment (in %), seasonally adjusted 12.0 11.9 13.1 13.1 Average nominal gross wage (in EUR) 1,525.47 1,498.05 1,495.45 1,510.02 Private sector (in EUR) 1,395.84 1,373.47 1,366.75 1,390.09 Public sector (in EUR) 1,762.88 1,725.75 1,731.79 1,731.66 -of which general government (in EUR) 1,761.15 1,726.81 1,716.93 1,694.69 Sources: ESS. SURS; calculations by IMAD. Note: 1seasonally adjusted. 20 In the first eight months of 2013, 4,486 persons on average got work through public works. 80 60 Table 3: Persons in formal employment by activity Number in '000 Change in Number 2012 VII 12 VI 13 VII 13 2012/ 2011 VII 13/ VI 13 VII 13/ VII 12 I-VII 13/ I-VII 12 Manufacturing 182.9 182.9 177.7 177.6 -1,919 -44 -5,298 -6,449 Construction 59.8 60.5 55.2 55.5 -8,047 298 -5,067 -7,373 Market services 338.4 338.2 333.6 333.4 -3,805 -208 -4,832 -7,121 -of which: Wholesale and retail trade, repair of motor vehicles and motorcycles 107.8 107.7 103.8 103.7 -1,848 -117 -4,028 -3,887 Public services 171.6 171.1 170.7 169.4 1,438 -1,207 -1,656 -1,923 Public administration and defence, compulsory social security 50.7 50.8 49.4 49.1 -650 -233 -1,676 -1,715 Education 65.5 64.6 65.5 64.5 778 -995 -94 -285 Human health and social work activities 55.4 55.6 55.7 55.8 1,311 21 114 77 Other 57.3 57.7 59.3 58.4 -1,632 -941 666 1250 Source: SURS; calculations by IMAD. The average gross earnings per employee remained unchanged in July (seasonally adjusted), only slightly higher than a year earlier. Gross earnings in the private sector21 remained roughly unchanged in July again (seasonally adjusted), as they had in the last and a half years.22 After June's decline, brought about by new austerity measures,23 government sector earnings also maintained the previous month's level, while earnings in the public sector rose slightly due to wage growth in public corporations (1.4%). In the first seven months the average gross earnings were 0.5 % lower than in the same period last year. In the private sector they remained similar to those in the previous year, while in the government sector they were 3.3% lower due to the adoption of the ZUJF in the middle of 2012, and an additional reduction in earnings in the middle of 2013. The decline in the public sector was somewhat smaller due to the above-average growth of the average earnings in public corporations (2.0%). Figure 21: Average gross earnings per employee -Gross earnings per employee -----Private sector -Public sector --------- of which, general government sector -- of which, public corporations ^ 1,900 1,800 1,700 != 1,600 1,500 o 1,400 1,300 1,200 Table 4: Earnings by activity Source: SURS. Gross wage per employee, in EUR Change, in % 2012 VII 2013 2012/ 2011 VII 13/ VI 13 VII 13/ VII 12 I-VII 13/ I-VII 12 Private sector activities (A-N; R-S) 1,463.64 1,463.92 0.8 1.9 1.8 0.5 Industry (B-E) 1,444.29 1,468.74 2.5 2.4 3.6 2.4 - of which manufacturing 1,397.25 1,420.91 2.5 2.5 3.4 2.4 Construction 1,205.65 1,207.20 -2.5 2.7 1.1 -1.7 Traditional services (G-I) 1,354.04 1,345.88 0.3 1.3 1.0 -0.2 Other market services (J-N;R-S) 1,713.36 1,681.07 -0.3 2.0 0.0 -1.5 Public service activities (O-Q) 1,710.91 1,648.35 -2.2 -1.5 -1.7 -3.1 - Public administration and defence, compulsory social security 1,752.03 1,724.18 -1.8 0.1 -0.4 -2.0 - Education 1,676.80 1,582.33 -3.3 -2.8 -2.4 -4.5 - Human health and social work activities 1,712.37 1,656.81 -1.3 -1.4 -2.2 -2.3 Source: SURS; calculations by IMAD. 21 Starting June 2012, we comment on data on earnings in the private sector and the public sector (within the latter, particularly in the general government sector), and only exceptionally on earnings in private sector activities and public service activities; for more see SEM 06/12, Selected Topics - Monitoring the movements of wages and wage earners in the public and private sectors. 22 The growth rates in 2010 and 2011 were impacted particularly by the increase in the minimum wage and changes in employment structure. 23 Agreement on further measures in the field of salaries and other labour costs in the public sector aiming to balance public finances in the period from 1 June 2013 to 31 December 2014, Official Gazette, No. 46/13. The decline was primarily a consequence of a linear reduction in wages and wage scale compression and, partly, the abolition of the increased seniority bonus paid to women with more than 25 years of service, a reduction in the allowance for specialisation and master's and doctoral studies (by half) and a cut in sickness benefits. In the first seven months of this year, the year-on-year declines in the average gross earnings differed across activities and earnings remained up year-on-year only in industry. In construction and in all market services the average earnings were down relative to the same period of 2012, with the exception of trade and financial-insurance activities, where they remained at the same level as a year before. They were higher only in industry,24 solely as a result of growth in manufacturing (2.4%) and in electricity, gas and steam supply (5.2%). Excluding industry and construction, where earnings had already declined year-on-year in 2012, last year's modest growth turned into a fall this year in all activities, or the fall deepened. As a result of austerity measures, the decline also deepened in public service activities, where earnings have already been down year-on-year for one and a half years. Figure 22: Growth in real gross earnings per employee by activity group Figure 23: Headline and core inflation in Slovenia and in the euro area s 0 ■fE -1 !E Uan-Jul 12 / Jan-Jul 11 Public service activities (O-Q) Industry (B-E) Source: SORS; calculations by IMAD. Prices September's price growth (0.3%), which was in line with expectations, was marked by seasonal factors. Monthly inflation rose primarily due to higher prices of clothing and footwear (0.9 percentage points), while dropping due to lower prices of holiday packages (-0.6 percentage points). Year-on-year price growth in September totalled 1.4 %; in the euro area 1.1%, according to Eurostat's flash estimate. Price growth (1.4%) in the first eight months of the year was down relative to that in the same period last year (1.8%), and marked primarily by higher prices of services and food. Food prices rose 2.9% this year, contributing 0.4 percentage points to inflation, while services prices, up 4.9%, contributed 1.5 percentage points. The latter mainly increased due to higher prices of utility and 5 3 O TS ji^ 2 1 i - Slovenia HICP Slovenia HICP -core inflation - Euro area HICP Euro area HICP -core inflation Source: Eurostat. telecommunication services (0.3 percentage points) and higher annual road user charges (0.1 percentage points). This year's inflation was also marked by higher prices of energy, which contributed half less than in the same period last year (due to lower commodity prices on global markets; 0.5 percentage points), and by the usual seasonal movements. Higher prices of holiday packages contributed 0.9 percentage to growth, while prices of clothing and footwear prices were 17% lower in this period (-1.3 percentage points). Weak economic activity continues to be reflected in moderate core inflation dynamics, but in the last two months core inflation has risen slightly due to the VAT increase. Figure 24: Breakdown of year-on-year inflation 2 Source: SURS; calculations by IMAD. 24 Including manufacturing, mining, electricity and water supply. 8 7 6 0 4 -4 8 7 6 5 4 3 0 -2 Table 5: Breakdown of the HICP into sub-groups - August 2013 Slovenia Euro area Cum. % Weight % Contribution in p.p. Cum. % Weight % Contribution in p.p. Total HICP 1.2 100.0 1.2 0.3 100.0 0.3 Goods -0.2 65.7 -0.1 -0.7 57.7 -0.4 Processed food, alcohol and tobacco 2.0 16.1 0.3 1.5 12.0 0.2 Non-processed food 5.0 7.4 0.4 1.7 7.3 0.1 Non-energy industrial goods -4.1 27.9 -1.1 -3.3 27.4 -0.9 Durables -0.8 9.7 -0.1 -0.9 8.8 -0.1 Non-durables 0.8 8.8 0.1 0.6 8.0 0.0 Semi-durables -11.8 9.4 -1.1 -7.6 10.5 -0.8 Energy 2.9 14.4 0.4 1.1 11.0 0.1 Electricity for households 12.8 2.7 0.3 4.4 2.6 0.1 Natural gas -1.0 1.1 0.0 -0.5 1.8 0.0 Liquid fuels for heating -1.1 1.5 0.0 -2.8 0.9 0.0 Solid fuels 3.0 0.9 0.0 1.2 0.1 0.0 District heating -0.9 0.9 0.0 -1.4 0.6 0.0 Fuels and lubricants 1.2 7.4 0.1 0.8 5.0 0.0 Services 3.7 34.3 1.3 1.8 42.3 0.8 Services - dwellings 5.3 3.0 0.2 1.9 10.3 0.2 Services - transport 3.3 5.8 0.2 3.3 7.2 0.2 Services - communications 2.4 3.5 0.1 -2.9 3.1 -0.1 Services - recreation, repairs, personal care 5.4 13.9 0.8 2.5 14.7 0.4 Services - other services 1.2 8.1 0.1 0.1 7.1 0.0 HICP excluding energy and non-processed food 0.7 78.2 0.5 0.1 81.7 0.1 Source: Eurostat; calculations by IMAD. Note: ECB classification The movements of domestic producer prices of manufactured goods on the domestic and foreign markets remain moderate. In comparison with the previous month, they otherwise rose on both markets, but in year-on-year terms they remained almost unchanged. Year-on-year Figure 25: Movements of domestic producer prices of manufactured goods sold on the domestic and foreign markets -PPI (domestic market) Mfr.of basic metals,fabric.metal prod.,exc. mach.,equip.(domestic) ----Mfr. of food products; beverages; tobacco products (domestic) -PPI (foreign market) growth in domestic producer prices on the domestic market stood at 0.2% and was largely a consequence of higher prices in the manufacture of food products (1.8%) and a further decline of prices in the manufacture of metals and metal products (-3.0%). The latter also impacted the year-on-year price growth on foreign markets, which remains negative for the third month in a row (-0.2%). After July's growth, prices of imported products remained practically unchanged in August (-0.1%). Their growth declined substantially year-on-year (by 1.6 percentage points to -0.4%), mainly on account of lower prices in the manufacture of metals and metal products (-5.8%) and a further slowdown of price growth in the manufacture of food products (1.5%). The price competitiveness of the economy deteriorated year-on-year again in July. The nominal effective exchange rate, which has been increasing steadily at the monthly level since September 201225 owing to the strengthening of the euro against the currencies of Slovenia's main trading partners, was also up year-on-year in July and in the first seven months of the year. At the same time, relative prices continued to grow year-on-year.26 After three years of continuous decline, the real effective exchange rate measured by the HICP was therefore higher Source: SURS. 25 Against the JPY, in particular, but also against the GBP, USD and HUF. 26 Slovenian prices in comparison with those of the trading partners. Figure 26: Real effective exchange rate deflated by the relative HICP Table 6: Balance of payments HICP Source: ECB; calculations by IMAD. year-on-year in July and this year, on average (by 2.7% and 1.1%, respectively). Owing to higher growth in relative prices,27 Slovenia was around the middle of euro area countries in terms of the loss in price competitiveness. The strengthening of the nominal effective exchange rate was among the smallest in the euro area, which is attributable to the structure of Slovenia's external trade.28 Balance of payments In July the current account of the balance of payment recorded a surplus again, which was much wider year-on-year in the first seven months (EUR 1.4 bn; in the same period of last year EUR 416.3 m), mainly due to a wider surplus in external trade. Besides, the deficit in the balance of factor incomes was smaller in this period, while the balance of current transfers deteriorated. Similar to the first half of this year, the trade balance recorded a surplus in July, which was up y-o-y due to a wider surplus in merchandise and services trade. The wider surplus in merchandise trade was mainly due to faster growth in exports to EU markets, which resulted in a much smaller deficit in trade with EU countries than in the same period last year. The surplus in trade with non-EU countries was also down year-on-year. The larger surplus in services trade was attributable to a much smaller deficit in trade in licences, patents and copyrights, and a larger surplus in trade in other business services.29 In the first 27 Which was also a consequence of one-off factors (higher prices of school meals and higher annual road user charges). 28 As Slovenia has an above-average share of merchandise trade with the euro area, the appreciation of the euro has a smaller impact on the nominal effective exchange rate (and conversely). 29 Other business services include: operating leasing, merchanting and various business, professional and technical services. I-VII 13, v mio EUR Inflows Outflows Balance1 Balance, I-VII 12 Current account 17,326.0 15,931.1 1,394.9 416.3 - Trade balance (FOB) 12,984.5 12,488.7 495.9 -146.1 - Services 3,019.4 1,813.1 1,206.4 1,008.3 - Income 535.5 718.8 -183.2 -422.6 Current transfers 786.5 910.6 -124.1 -23.4 Capital and financial account 1,902.7 -3,947.8 -2,045.0 -237.4 - Capital account 153.7 -195.0 -41.3 -3.6 - Capital transfers 125.0 -177.0 -52.0 -29.3 - Non-produced, non-financial assets 28.7 -18.0 10.7 25.7 - Financial account 1,749.0 -3,752.8 -2,003.7 -233.8 - Direct investment -599.2 -44.8 -644.0 331.4 - Portfolio investment 1,803.3 236.8 2,040.1 -1,443.1 - Financial derivates -35.9 -252.4 -288.4 -52.2 - Other investment 580.9 -3,658.1 -3,077.2 938.2 - Assets 0.0 -2,031.3 -2,031.3 -1,438.6 - Liabilities 580.9 -1,626.8 -1,045.9 2,376.8 - Reserve assets 0.0 -34.3 -34.3 -8.2 Net errors and omissions 650.1 0.0 650.1 -178.9 Source: BS. Note: 1a minus sign (-) in the balance indicates a surplus of imports over exports in the current account and a rise in assets in the capital and financial account and the central bank's international reserves. Figure 27: Components of the current account balance, in EUR m ■ Merchandise trade I Factor incomes -Current account ■Services trade ■Current transfers 400 300 200 100 0 ZD LU -100 -200 -300 -400 -500 Source: BS; calculations by IMAD. seven months, the surplus in merchandise and services trade totalled EUR 1.7 bn, compared with EUR 862.2 m in the same period last year. The year-on-year narrowing of the deficit in the balance of factor incomes in July was mainly due to smaller net 30 This mainly involved the lower estimated negative reinvested earnings of foreign direct investors in Slovenia. Data on reinvested earnings in the outflows of equity of direct investment.30 The increase in net income from equity securities was largely a result of higher dividends and profits from portfolio investment abroad. Net payments of interest on external debt were up again year-on-year in July, totalling EUR 268.9 m in the first seven months (EUR 266.2 m in the same period last year). Net payments of interest on loans taken out abroad were down year-on-year. Payments of interest on debt securities continued to increase because of government sector borrowing and adverse financing conditions. The widening of the year-on-year deficit in current transfers in the first seven months was a consequence of the lower absorption of EU funds and a wider deficit in private sector transfers (insurance and other transfers). Figure 28: Net interest payments by sector, EUR m ^■B^ Government sector Private sector -Total Figure 29: Financial transactions of the balance of payments 30 Source: BS; calculations by IMAD. In July international financial transactions31 recorded a net outflow again (EUR 191.0 m), primarily due to the outflows of the government and private sectors, while the net capital inflow of the BS increased. The government sector repaid a portion of long-term liabilities to foreign portfolio investors in July. As a hedge against the currency risk associated with the sale of dollar bonds, the government sector increased claims in the segment of financial derivatives. The majority of private sector transactions were carried out by commercial banks and enterprises. Commercial banks repaid a portion of long-term foreign loans, while enterprises repaid a portion of short-term commercial credits taken out for financing imports of goods and services. The outflow of household currency and deposits to accounts in the rest of the world continued. The BS borrowed funds from the Eurosystem again to provide liquidity for domestic commercial banks. current year are estimated (a three year monthly average of actual data on total earnings, less extraordinary incomes, is decreased by dividends and other incomes, paid in the current month). 31 Excluding international monetary reserves and statistical errors. ■ BS I Private sector Government sector Net financial flow 3,000 2,000 1,000 Source: BS. ^^ ^^ Financial markets The situation in the Slovenian banking system continues to deteriorate, regardless of the modest decline in the stock of domestic bank loans to domestic non-banking sectors in August. The decline of EUR 3.9 m, the smallest this year, was mainly a result of significantly lower corporate deleveraging, while the stock of household loans increased. Despite August's low deleveraging of domestic non-banking sectors, the stock of their loans fell by EUR 1.2 bn in the first eight months this year, nearly four times as much as in the same period last year. The banks continue to make net repayments of liabilities abroad; household deposits declined slightly again, while government deposits rose. The stock of household loans rose in August for the first time since October2012. The increase (by EUR 8.5 m) was mainly due to a larger volume of loans for other purposes (by EUR 22.5 m), which could be a result of seasonal factors, with households resorting to overdrafts to meet extra expenses related to holidays and back-to-school costs. The stock of housing loans also rose slightly (by EUR 3.7 m), while households continue to make net repayments of consumer loans. Household loans dropped by almost EUR 210 m in the first eight months of this year, which is nearly twice the amount recorded in the same period of last year. Corporate and NFI deleveraging eased significantly in August, totalling a mere EUR 14.5 m. Corporate deleveraging declined substantially, reaching this year's low (EUR 8.4 m), while loan repayments of NFIs were similar to those in previous months. Corporate and NFI repayments of maturing liabilities to banks nevertheless 0 Figure 30: Growth in household, corporate, NFI and government loans ■ Enterprises and NFIs I ■ Government ■ -Total 600 500 400 300 200 g 100 0 -100 -200 -300 -400 -500 -600 -700 Source: BS; calculations by IMAD. remain very high, given that the volume of corporate and NFI loans declined by as much as EUR 900 m in the first eight months of the year, nearly two thirds more than in the same period of 2012. Year-on-year it was down 9.2%. Enterprises and NFIs recorded net borrowing abroad in July. The net flow was otherwise modest (EUR 5.2 m) and a result of short-term net borrowing in the amount of EUR 13.1 m, while enterprises and NFIs made net repayments of long-term foreign loans. In the first seven months of this year enterprises borrowed as much as EUR 1.1 bn net in foreign loans. Almost the whole net borrowing this year is estimated to be a result of one-off events (requalification of liabilities from direct investment into Figure 31: Net corporate and NFI borrowing abroad and gaps between domestic and foreign interest rates ^^■Short-term loans (left axis) ^^■Long-term loans (left axis) -Gaps between domestic and foreign interest rates (right axis) 550 500 450 400 350 cz 300 250 J^ ^ 200 150 100 50 0 100 0 -100 .-200 -300 -400 loans from non-affiliated companies, and increased borrowing by one of the energy companies), rather than improved access of Slovenian enterprises and NFIs to foreign sources of finance. In July the gaps between domestic and foreign interest rates for corporate and NFI loans narrowed significantly again (almost by 90 basis points), but remained very high at 210 basis points. This downswing does not necessarily reflect a better situation on the Slovenian credit market, as the lending activity of the Slovenian banks remains very limited. Banks increased net repayments of foreign liabilities in July. Total net repayments exceeded EUR 400 m, almost all of them being net repayments of long-term loans. Banks' net repayments abroad in July were the highest this year, but the banks nevertheless repaid only EUR 1.4 bn net in foreign liabilities in the first seven months, around two fifths less than in the same period of last year. As a result of maturing foreign liabilities, liquidity pressures on banks nevertheless remain high. Figure 32: Net repayments of foreign liabilities by domestic banks 2,000 -■-■-■- 1,500 Bonds Deposits Short-term loans Long-term loans Total -1,500 Source: BS; calculations by IMAD. Source: BS; calculations by IMAD. In August the stock of household deposits declined, while the stock of government deposits increased. Household deposits shrank almost by EUR 40 m, as a result of a decline in overnight and short-term deposits, while long-term deposits rose again. These developments could mainly be due to households needing more for liquid funds to cover extra expenses for holidays and back-to-school costs. Household deposits were down around EUR 310 bn in the first eight months, in contrast to the same period last year when the decline was only 5% of this amount. Government deposits rose by around EUR 140 m in August. With short-term deposits increasing the most, there was no significant improvement in the maturity structure of deposits. In the first eight months government deposits at commercial banks rose by around EUR 1.1 bn, while in the same period last year they had fallen by around EUR 700 m. 0 Table7: Financial market indicators Domestic bank loans to nonbanking sector and household savings Nominal amounts, EUR bn Nominal loan growth, % 31. XII 12 31. VIII 13 31. VIII 13/ 31. VII 13 31. VIII 13/ 31. XII 12 31. VIII 13/ 31. VIII 12 Loans total 31,464.6 30,300.4 0.0 -3.7 -6.5 Enterprises and NFI 20,456.5 19,564.7 -0.1 -4.4 -9.2 Government 1,741.4 1,676.9 0.1 -3.7 9.0 Households 9,266.7 9,058.8 0.1 -2.2 -3.1 Consumer credits 2,481.8 2,345.1 -0.7 -5.5 -8.7 Lending for house purchase 5,258.9 5,251.2 0.1 -0.1 0.0 Other lending 1,526.1 1,462.5 1.6 -4.2 -4.1 Bank deposits total 15,051.3 14,745.1 -0.3 -2.0 -2.2 Overnight deposits 6,479.4 6,461.7 -0.6 -0.3 -2.2 Short-term deposits 4,010.9 3,789.1 -0.7 -5.5 -3.6 Long-term deposits 4,554.7 4,488.4 0.6 -1.5 -0.9 Deposits redeemable at notice 6.2 5.9 0.1 -5.1 -32.1 Mutual funds 1,830.0 1,786.4 -1.6 -2.4 -2.3 Government bank deposits, total 2,562.7 3,694.4 4.0 44.2 71.9 Overnight deposits 196.6 414.9 6.9 111.0 219.3 Short-term deposits 828.4 1,711.0 7.3 106.5 290.6 Long-term deposits 1,537.1 1,521.1 -0.2 -1.0 -3.7 Deposits redeemable at notice 0.5 47.3 3.9 8,586.2 6,316.0 Sources: Monthly Bulletin of the BS, SMA (Securities Market Agency); calculations by IMAD. Figure 33: Share of bad and non-performing claims and creation of impairments and provisions in the Slovenian banking system Provisions and impairments (left axis) -Share of non-performing claims (right axis) -Share of bad claims (right axis) 17 16 15 14 13 12 11 10 9 # 8 7 6 5 4 3 2 1 0 Source: BS; calculations by IMAD. The deterioration in the quality of bank claims has accelerated strongly in recent months. In July the amount of bad claims32 in the Slovenian banking system rose by around EUR 260 m. The largest part of the increase (approximately two thirds) was accounted for by faster deterioration in the quality of claims in the construction sector, where the deterioration had been slowing in previous months, which, in our estimation, could also be a result of higher write-offs of claims on companies in this activity. The quality of external claims has also deteriorated somewhat again.33 The proportion of bad claims reached 16.9% of the banking sector's total claims in July, up 2.9 percentage points from the end of last year. In view of the more pronounced deterioration in the quality of their assets, the banks are increasingly creating provisions and impairments, which went up EUR 116.8 m in August and as much as EUR 675.6 m in the first eight months of this year, nearly 5% more than in the same period last year. Figure 34: Increase in bad claims in July, by sector c ty O) £! ^ .<8 C 13 t^ ra 0 li 0 Z c m S CL 01 Source: BS; calculations by IMAD. 32 Claims rated C, D and E. 3 On all entities except foreign financial organisations. Public finance The widening general government deficit trend reverted in July on account of higher revenue. In the first seven months it totalled EUR 1.3 bn,34 and it was EUR 162 m higher than in the same period of the previous year. The increase was due to a fall in revenue (-EUR 315 m or -3.7%), since expenditure was slightly lower in 2013 (-EUR 15 m). The trend fall in revenue slowed down in July primarily due to a substantial increase in non-tax revenue (EUR 117 m) and improvement in VAT revenue. July's increase in non-tax revenue derived from higher revenue from profits. The year-on-year decline in total revenue in the first seven months of the year was primarily the result of lower tax revenue and social security contributions (-EUR 294 m and -EUR 136 m, respectively). The main driver of lower tax revenue was corporate income tax (down EUR 236 m) reflecting worse economic conditions and changes in the corporate income tax system (mainly due to tax assessments after the reduction of tax rates). VAT revenue in July (after the VAT increase) was 9.7% higher year-on- Table 8: Taxes and social security contributions year, while VAT revenue in the quarter preceding the VAT increase was only 0.2% higher compared with the same quarter one year earlier. In the first seven months as a whole, VAT revenue was 3.3% lower compared with the same period one year before. The lower VAT revenue was recorded mainly during the first quarter of the year, when economic activity also fell significantly. Revenue from the EU budget in the first seven months of the year was also slightly lower (down EUR 28 m). General government expenditure remained slightly lower in the first seven months compared with the same period one year earlier (-0.3%), but the rate of expenditure reduction has been decreasing since March. The year-on-year decline in the first seven months was underpinned by the reduction in expenditure on wages (-EUR 130 m), purchases of goods and service (-EUR 64 m), capital expenditure and capital transfers (-EUR 53 m) and social transfers (-EUR 36 m). Other expenditure was up year-on-year in the same period: expenditure on interest payments (EUR 100 m), budget reserves (EUR 51 m), subsidies (EUR 31 m) and payments to the budget (EUR 28 m). Expenditure on social transfers declined relative to last year across all EUR m Growth, % Structure, % I-VII 2013 VII 2013/VII 2012 I-VII 2013/I-VII 2012 I-VII 2012 I-VII 2013 General government revenue - total 8,204.4 8.5 -3.7 100.0 100.0 Corporate income tax 95.5 -35.7 -71.2 3.9 1.2 Personal income tax 1,053.9 -28.2 -5.2 13.0 12.8 Value added tax 1,656.5 9.7 -3.3 20.1 20.2 Excise duties 839.1 -3.9 -3.8 10.2 10.2 Social security contributions 2,971.3 -2.1 -4.4 36.5 36.2 Other general government revenues 1,588.2 59.4 14.9 16.2 19.4 Source: PPA - Report on Payments of All Public Revenues; calculations by IMAD. Table 9: Consolidated general government revenue and expenditure 2012 2013 EUR m % of GDP Growth, % I-VII 13, EUR m I-VII 13/I-VII 12 Revenue - total 14,995.1 42.3 0.1 8,204.4 -3.7 - Tax revenues 13,117.6 37.0 -0.7 7,115.2 -5.7 - Taxes on income and profit 2,656.6 7.5 -2.5 1,150.6 -20.3 - Social security contributions 5,244.1 14.8 -0.4 2,971.3 -4.4 - Domestic taxes on goods and servises 4,876.0 13.7 0.4 2,791.2 -1.2 - Receipts from the EU budget 845.2 2.4 3.7 444.7 -5.9 Expenditure - total 16,117.9 45.4 -2.6 9,499.8 -0.3 - Wages and other personnel expenditure 3,185.1 9.0 -4.4 2,125.1 -5.8 - Purchases of goods and services 2,370.3 6.7 -3.0 1,324.1 -4.6 -Domestic and foreign interest payments 648.0 1.8 23.0 618.2 19.3 - Transfers to individuals and households 6,383.6 18.0 -2.3 3,773.2 -1.0 - Capital expenditure 912.3 2.6 -10.9 367.9 -12.7 - Capital transfers 320.2 0.9 -13.9 117.5 2.4 - Payment to the EU budget 390.3 1.1 -3.7 295.9 10.5 Deficit -1,122.8 -3.2 -28.2 -1,295.4 28.1 Source: MF, Public Finance Bulletin. 34 According to the consolidated balance on a cash basis. Box 3: Main aggregates of the general government sector, ESA 95 The general government deficit1 in 2012 after the routine revision by SURS is estimated at EUR 1,354 m or 3.8% of GDP. This is somewhat less than estimated in April this year, by EUR 63.1 m or 0.1 percentage points of GDP. The deficit was EUR 943 m or 2.5 percentage points of GDP lower than in 2011. The decline was a consequence of a considerable fall in general government expenditure, which declined for the first time since 2009. Revenue also fell slightly. Figure 35: Revision of individual categories of general government revenue in 2012 compared with 2008 Data were revised for the whole period of 2009-2012. The amounts of the deficit in this period were not changed substantially, but the corrections of revenues and expenditures were relatively significant, with both revenues and expenditures being around EUR 300-400 m lower annually than before the revision. The decline on the revenue side was partly due to changes in the presentation of data on value added tax, which are now recorded on a cash basis with a lag of one month, rather than on an accrual basis2 as before the revision. Revenue from other current transfers was also revised downwards for all years. Expenditure in the 2009-2011 period was revised in two categories in particular, while expenditure in 2012 was corrected in most categories. Capital transfers of the general government3 and subsidies4 were reduced the most, and in 2012 also other current transfers.5 Gross capital formation and compensation of employees in 2012 were revised upwards by EUR 80 m and EUR 27 m, respectively. Other current transfers H Market output, output for own final use, other non-market output r Social secu rity contributions E. Capital transfers Property income Other subsidies on production 4....... Taxes on production and imports .......................j Current taxes on income, wealth, etc. -600 -400 -200 0 200 400 Source: SURS, Main national accounts aggregates, 2009-2012, 30 Sept 2013. General government revenue declined by EUR 138 m in 2012 compared with 2011. Only general government revenue from property income increased more visibly, due to the one-off transfer of profits from a state-owned company. Without this transfer, total revenue would have declined by a further EUR 87 m. Capital transfers were also higher, as was, marginally, revenue from taxes on production and imports. Total revenues from taxes declined by EUR 135 m or 1.7%, most notably revenue from corporate income tax (-26.9%), which totalled EUR 444 m. The decline was influenced by the deterioration of the macroeconomic situation, the lowering of the tax rate and the increase in some types of tax relief. Revenue from social security contributions also declined (EUR -43 m or -0.8%), for the first time since 1995. Revenues from social security contributions of employees and employers were down, while revenues from social security contributions Figure 36: Revision of individual categories of general government expenditure in 2012 compared with 2008 Social benefits Compensation of employees Property income (interest) Intermediate consumption Adjustment for the change in net equity of households Current taxes on income, wealth, etc. Acquisitions less disposals of non-prod. non-finan. assets Other taxes on production Other current transfers Subsidies Capital transfers -600 -300 0 300 600 900 Source: SURS, Main national accounts aggregates, 2009-2012, 30 Sept 2013. Figure 37: General government revenue, expenditure, and deficit I Deficit (left axis) ■ Expenditure (right axis) - Revenue (right axis) - GDP (right axis) 10 5 0 -15 a a a a a Source: SURS; calculations by IMAD. 1 Data on the deficit and all revenues and expenditures in the Box are derived according to the ESA 95 methodology. 2 This change reduced general government revenue from VAT by EUR 144 in 2009; by EUR 123 m in 2010; and by EUR 58 m in 2011. 3 2009: -EUR 248 m, 2010: -EUR 243 m, 2011: -EUR 181 m, 2012: -EUR 247 m. 4 2009: -EUR 63 m, 2010: -EUR 110 m, 2011: -EUR 96 m, 2012: -EUR 121 m. 5 -EUR 154 m. 15 Table 10: Main aggregates of the general government of self-employed and unemployed persons rose, which reflects developments in individual categories of employment in 2012. Other revenues in 2012 were up EUR 40 m compared with 2011. Relative to 2008, general government revenue was down EUR 87 m. The largest decline in this period was recorded for current taxes on income and wealth (-EUR 587 m), and the largest increase for revenue from other current transfers (EUR 312 m). General government expenditure in 2012 was EUR 1,072 m lower than a year earlier. Expenditure reduction was broad-based, with the exception of interest expenditure that was up EUR 67 m. The largest decline in 2012 was recorded for capital transfers of the general government (-EUR 425 m), due to much lower expenditure for certain specific events related to capital injections into banks and companies and some other one-off events than in 2011.6 Other expenditures dropped by EUR 713 m: gross fixed capital formation (EUR -176 m), social benefits (-EUR 168 m), other current transfers (-EUR 135 m), compensation of employees (EUR -124 m), intermediate consumption (-EUR 60 m) and subsidies (-EUR 38 m). Relative to 2008, total expenditure was up EUR 565 m. General government expenditure on social benefits increased the most in this period (EUR 800 m), while the largest decline was recorded for expenditure on gross capital formation (EUR 535 m). General government expenditure on interest in 2012 was EUR 347 higher than that in 2008. According to the quarterly non-financial sector accounts, the general government deficit in the second quarter of 2013 was estimated at EUR 421, after totalling EUR 821 m in the first quarter. In both quarters the deficit was up year-on-year,7 as a result of capital injections into banks in the total amount of EUR 441 m. Not including capital injections, the deficit would total EUR 801 m or 4.7% of GDP in the first half of 2013, and EUR 761 m or 4.3% of GDP in the same period of 2012. General government revenue, already down at the year-on-year level in the first quarter of 2013 (-2.9%), remained so in the second quarter (-2.7%). The falling of tax revenues, typical for 2012 and the first quarter of 2013, came to a halt in the second quarter. After having declined strongly year-on-year in the first quarter (-9.5%), revenue from VAT was slightly higher year-on-year in the second quarter (1.5%) owing to larger purchases in anticipation of the VAT increase. Revenue from social security contributions, which had already dropped last year, was also down year-on-year in both quarters of 2013 (-4.9% and -4.3%, respectively). Growth in general government expenditure in the first quarter of 2013 (including the capital injections) was 6.4%, while expenditure in the second quarter remained similar to last year (0.1%). Not including the amounts of funds used for capital injections into banks, expenditure was down 1.3% in the first quarter and 2.8% in the second quarter in year-on-year terms. In addition to capital transfers (as a result of capital injections into banks), interest expenditure and expenditure on social benefits were also up year-on-year in the second quarter, while all other categories of general government expenditure remained down, the most (in absolute terms) gross capital formation, intermediate consumption and compensation of employees and subsidies. The significant deficit reduction in 2012 was the first large fiscal effort made since the beginning of the crisis, and the most recent official estimates indicate that, disregarding the one-off expenditure related to bank recapitalisations, the general government deficit in 2013 will not be much higher than in 2012. The deficit of the general government reduced by capital injections into banks in 2013 is estimated at EUR 1,379 m or 4.0% of GDP, while the deficit including the capital injection of EUR 620 m as estimated by SURS is forecast at EUR 1,999 m or 5.7% of GDP. In 2012 consolidated debt of the general government totalled EUR 19,204 m or 54.4% of GDP, and the estimate for this year is EUR 22,044 m or 63.1% of GDP. The estimated increase in 2013 will be, in addition to the current deficit, also impacted by the pre-financing of the future borrowing requirement. 2009 2010 2011 2012 EUR, m Total general gov. revenue 14,988 15,467 15,758 15,620 Total general gov. expenditure 17,235 17,546 18,046 16,975 Deficit -2,247 -2,080 -2,288 -1,354 Of which: Central government -1,911 -1,846 -2,282 -1,306 Local government -202 -109 3 63 Social security funds -135 -125 -9 -112 Costs of the financial crisis 0 0 243 61 Deficit excluding costs of the financial crisis -2,247 -2,080 -2,045 -1,293 Consolidated government debt 12,460 13,742 17,016 19,204 Share in GDP, in % Total general gov. revenue 42.3 43.6 43.6 44.2 Total general gov. expenditure 48.7 49.4 49.9 48.1 Deficit -6.3 -5.9 -6.3 -3.8 od tega: Central government -5.4 -5.2 -6.3 -3.7 Local government -0.6 -0.3 0.0 0.2 Social security funds -0.4 -0.4 0.0 -0.3 Costs of the financial crisis 0.0 0.0 0.7 0.2 Deficit excluding costs of the financial crisis -6.3 -5.9 -5.7 -3.7 Consolidated government debt 35.2 38.7 47.1 54.4 Source: SORS,Main aggregates of the general government, 2009-2012, 30. 9. 2013. 6 In 2011 general government capital transfers were much higher than in 2012 due to equity injections into NLB d.d. and some state-owned companies, the assumption of liabilities held by the Slovenian Railways and the debt of the public company building hydroelectric power plants on the Sava river and payments of guarantees called. 7 In the first quarter of 2012 the deficit stood at 447 m; in the second at EUR 314 m. Figure 38: Consolidated general government revenue and expenditure -General government revenue, total — General government expenditure, total 17.5 16.5 15.5 cc 14.5 ^ rN Source: MF; calculations by IM AD. Figure 39: Planned and absorbed EU funds ■ Funds planned In the state budget for 2013 ■ Funds planned in the state budget for 2012 ■ Total receipts in 2013 (January-August) ■ Total receipts in 2012 (January-December) Other Common Agricultural Policy 200 300 400 500 In EUR m Source: MF; calculations by IMAD. categories, with the exception of pension expenditure, which increased by EUR 67, mainly due to a higher number of pensioners. The most important reductions in social transfers concern family benefits and parental compensation. In August, Slovenia received EUR 41.5 m from the EU budget, less than in previous months, but its net budgetary position was nevertheless positive. August's payments into the EU budget (EUR 32.0 m) were approximately equal to this year's average, but Slovenia's net positive position declined slightly relative to the preceding month (from EUR 13.4 m to EUR 9.5 m). In the first eight months Slovenia received EUR 483.5 m from the EU budget, or 40.8% of what is planned in the revised budget for 2013. The absorption was 5.4% lower than in the same period of last year, with the largest amount coming from Structural Funds (EUR 222.1 m or 35.6% of the amount envisaged in the revised budget from this source). The highest absorption rate (65.5%) was recorded for funds received under the Common Agricultural and Fisheries Policies, and the lowest for receipts from the Cohesion Fund (22.5%). In the same period Slovenia paid EUR 327.9 m into the EU budget, 10.1% more than in the same period last year or 79.2% of all funds it is expected to pay this year. Its net budgetary position against the EU budget was positive in the amount of EUR 156.6 m (EUR 213.5 m in the same period of last year). This year the dynamics of funds received from the EU budget were much more uniform than in 2012. Last year's monthly receipts were more volatile, with the highest amounts recorded in March (EUR 134.8 m) and June (EUR 109.8 m). The receipts in 2013, averaging EUR 43 m, are more moderate, with the exception of those in March (EUR 107.6 m). Payments into the EU budget were, similar to previous years, more uniform. Only February's payments (EUR 77.5 m) stood out again this year, due to the higher payment (triple the amount of the average monthly payments) for the European Agricultural Guarantee Fund (EAGF). 0 600 M u a o ■Ö 01 u 31 0! WEF Global 2013-2014 Competitiveness Report Slovenia's ranking on the WEF global competitiveness scale declined significantly again. Switzerland, Singapore and Finland are at the top of the scale35 among the 148 countries analysed in this year's report. Six of the top ten countries are from the EU. Slovenia has slipped by six places to 62nd among all countries analysed, and by two places to 23rd relative to the EU Member States. It remains one of the countries whose positions have deteriorated significantly since the beginning of the crisis.36 In the last year its ranking has deteriorated in two categories of competitiveness, having improved slightly only in one, i.e. basic requirements.37 The main barriers to doing business have remained similar to previous years, with managers highlighting limited access to financing (24.3% of WEF survey respondents), inefficient government bureaucracy (17.5%) and restrictive labour regulations (13.9%) in particular. In comparison with last year, more respondents also cited corruption and policy and government instability as problematic factors for doing business in Slovenia. Figure 40: The most problematic factors for doing business in Slovenia (WEF survey) Access to financing Inefficient governm. bureaucracy Restrictive labour regulations Tax rates Corruption Policy instability Inflation Other 0 4 8 12 16 % of respondents Source: WEF Note: From the list of factors above, respondents were asked to select the fve most problematic for doing business in Sloveniaand to rank them between 1 and 5. The fgure shows the responses weighted according to their rankings. 35 Altogether, 114 indicators were used in this year's survey, 80 of which are soft (surveys among managers), while the others are statistical data (for 2012 or the most recent available). This means that the number of scores and the rankings largely depend on the surveys. The survey of managers was conducted in the first half of this year. 36 In the last five years Slovenia's ranking deteriorated by 20 places, among EU countries by 7. Greece and Slovakia are the only EU countries to have slipped more. 37 The indicators are grouped in 12 key pillars of competitiveness divided in three categories. The first category, basic requirements, includes institutions, infrastructure, macroeconomic environment, and health and primary education. Efficiency enhancers include higher education and training, goods and labour market efficiency, financial market development, technological readiness and market size. The third category consists of innovation and business sophistication factors. The methodology has not changed much for several years, which enables comparisons between years. With regard to the three categories of competitiveness, Slovenia ranks highest in basic requirements, though no positive shifts have been seen in this area, despite this year's improvement. Slovenia remains among the more competitive countries in the areas of infrastructure (36'h place) and health and primary care (17'h), which continue to offset the falling in the institutions and macroeconomic environment indicators. Much as in previous years, the managers are very dissatisfied with public institutions and decision makers, in particular with the burden of government regulation (a fall by 12 places to 136'h) and the wastefulness of government spending (a fall by 11 places to 129'h place). Trust in politicians also keeps declining (by 17 places to 133rd). The efficiency of legal framework in settling disputes is also problematic compared with other countries38 (135'h place), which is also evident from other competitiveness surveys (such as Doing Business). Trust in private institutions is also low, largely on account of the low efficacy of corporate boards (135'h) and a low degree of protection of minority shareholders' interests (115'h). Slovenia's position in terms of the strength of auditing and reporting standards also deteriorated substantially, by 17 places to 81s'. Despite the deterioration in most macroeconomic indicators in 2012, Slovenia has not fallen much on the indicator of macroeconomic stability (down 1 place to 53rd), given that the macroeconomic environment is also deteriorating in a number of other countries. Its ranking in this area is however still much lower than in the period before the crisis, which is largely attributable to deteriorating public finances. Figure 41: Comparison of WEF indicators for Slovenia and innovation-driven economies -Innovation-driven economies* -Slovenia 2013/2014 -----Slovenia 2008/2009 Institutions 7 Innovatio Business sophisticatio Market size nfrastructure ^ ■ Macroeconomic environment Health and Higher education and training Goods market efficiency Financial market development Labour market efficiency Source: WEF. Note: *top 10 countries. A higher score indicates a better outcome; the highest score is 7. Slovenia's falling in the category of efficiency enhancers mainly reflects the deterioration of financial market conditions and the absence of deeper structural reforms. Despite last year's adoption of a legislative framework 38 Greece, Slovakia, Italy and Croatia were the only EU countries to score lower than Slovenia on this indicator. for banking system stabilisation, Slovenia's ranking on the WEF competitiveness scale indicates continuing problems in this area. Slovenia has slipped in comparison with other countries in terms of all indicators that show trust in the efficiency of the financial sector (financial market development). The managers surveyed were very pessimistic in their assessments of the financial sector, in particular with regard to the soundness of banks (147'h place), which was rated lower only in Greece. The assessment of access to financing39 also deteriorated, with Slovenia falling to the bottom of the countries analysed. The WEF report also indicates an absence of structural reforms to increase the competitiveness and efficiency on foreign markets of goods, and insufficient labour market reforms. Regardless of this year's amendments to the labour market legislation geared to increase flexibility (by reducing the firing costs for certain categories of workers and simplifying the firing process), managers continue to be dissatisfied with hiring and firing practices (145'h place). The low ranking on the indicator of labour market efficiency compared with other countries is also attributable to the tax burden on labour (134'h place on the taxation and incentives to work indicator). On the other hand, Slovenia still ranks high in terms of secondary and higher education and training (25th) and technological readiness (33rd). In the last year Slovenia has also fallen in the category of innovation and business sophistication factors, where it was among more competitive countries in previous years. According to the WEF report, Slovenia has slipped in business sophistication factors in the last two years, particularly in terms of participation at higher levels of the value chain (value chain breadth)40 and the state of cluster development. This indicates that Slovenia's companies are adjusting too slowly to the changing economic circumstances, and that the systemic changes are insufficiently geared towards supporting businesses. Slovenia's ranking in the area of innovations has also deteriorated again. The quality of scientific research institutions is otherwise deemed to be high (29th place), but companies have cut expenditure on R&D during the crisis and the cooperation between research institutions and businesses remains weak. The capacity of Slovenian companies for innovation is also rated lower this year (down by 23 places to 54'h). In terms of sustainable competitiveness41 Slovenia ranks higher than in global competitiveness, but in the last year it has also slipped in this area. Among the EU countries42 39 In the last year Slovenia has fallen in availability (by 24 places to 119th) and affordability of financial services (by 21 places to 113rd), and in ease of access to loans (by 19 places to 137th). 40 Participation at lower levels ofthe value chain involves simple production processes such as production of raw materials, while participation at higher levels means advanced operations (production, marketing, distribution, etc.). On the scale between 1 and 7, Slovenia has 3.6 scores according to the estimates of the managers surveyed (last year 3.8). 41 For more on the sustainable competitiveness index see http://www. weforum.org/content/pages/ sustainable-competitiveness/ and SEM 9/12, Selected Topics - WEF Global Competitiveness Report 2012-2013. 42 A year-on-year comparison of Slovenia can only be made relative to covered by the sustainable competitiveness index, which monitors competitiveness over the longer term and also takes account of social and environmental dimensions, Slovenia has fallen by 3 places to 16'h in the last year. With the inclusion of social and environmental sustainability, the value of the indicator otherwise improved almost by 10%. The decline in Slovenia's position relative to last year was primarily due to a fall in the global competitiveness index and the social sustainability sub-index, while the environmental sustainability sub-index improved slightly. At-risk-of-poverty and deprivations rates in 2012 material The at-risk-of-poverty rate43 (13.5%) remained around the previous year's level in 2012 (-0.1 percentage points), with approximately 271,000 people living below the at-risk-of-poverty threshold. The rate is calculated using data on household income in 2011,44 when Slovenia otherwise recorded modest economic growth (0.7%), however, amid a real stagnation in the average wage, a further decline in employment, and an increase in unemployment, the number of pensioners and beneficiaries of various social transfers. The at-risk-of-poverty threshold was EUR 606 for a single person, or EUR 1,273 for a family of four. Relative to the year before, it rose only by EUR 6 (or 1%). After the decline in 2010, this is the smallest increase since 2005. Taking into account the relative measure of determining the poverty threshold, the modest increase is a result of a further concentration of income in 2011, particularly at the lower end of the income scale.45 Even a slight increase in the poverty threshold has a significant impact on the at-risk-of-poverty rate (taking into account total household income), which therefore remained relatively the same as in the preceding year. Income inequality measured by S80/S20 quintile share ratio and Gini coefficient, which had been the lowest in the EU in 2011, also remained at the previous year's level. The at-risk-of-poverty rate before social transfers and excluding pensions rose significantly (by 1.7 percentage points to 41.9%) and was highest since 2005. Amid the lowest nominal growth in the average wage in the last EU countries, as the sample of EU countries remained the same as last year, with Luxembourg and Malta missing in both years. The number of all countries taken into account in calculating the global competitiveness index has increased (this year 122; last year 94), but is still lower than in the global competitiveness index due to the unavailability of data. 43 The at-risk-of-poverty rate is the share of people with income below the at-risk-of-poverty threshold, which is defined as 60% of median equivalised disposable income of all households according to the Eurostat methodology, using the OECD modified equivalence scheme. 44 Data on poverty risk in 2012 are derived from the Statistics on Income and Living conditions (SILC). 45 This was a result of the until then lowest growth in the average gross wage per employee, a further increase in the minimum-to-average wage ratio and in the number of minimum-wage earners, changes in employment structure and the stagnation/decline of wages in certain sectors with the highest earnings. Moreover, the wage gaps were also reduced by austerity measures in the public sector (Development report 2012, pp. 70 and 192). Table 11: Basic indicators of poverty and unequal distribution of income, Slovenia, 2005-2012 Year of measurement 2005 2006 2007 2008 2009 2010 2011 2012 Based on income from 2004 2005 2006 2007 2008 2009 2010 2011 Number of people below the at-risk-of-poverty threshold, in thousand 238 233 225 241 223 254 273 271 At-risk-of-poverty rate (in %) A Total population (after social transfers) 12.2 11.6 11.5 12.3 11.3 12.7 13.6 13.5 Change relative to the previous year (in percentage points -0.6 -0.1 0.8 -1.0 1.4 0.9 -0.1 B Before social transfers1 25.9 24.2 23.1 23.0 22.0 24.2 24.2 25.2 Change relative to the previous year (in percentage points -1.7 -1.1 -0.1 -1.0 2.2 0.0 1.0 C Excluding pensions and before social transfers 42.2 40.7 39.7 38.5 37.8 39.9 40.2 41.9 Change relative to the previous year (in percentage points -1.5 -1.0 -1.2 -0.7 2.1 0.3 1.7 Impact of pensions (C-B) (in percentage points) 16.3 16.5 16.6 15.5 15.8 15.7 16.0 16.7 Impact of social transfers (B-A) (in percentage points) 13.7 12.6 11.6 10.7 10.7 11.5 10.6 11.7 At-risk-of-poverty threshold for Single person (EUR/month) 440 466 495 545 593 587 600 606 Family of four (EUR/month) 924 978 1.040 1.144 1.246 1.232 1.260 1.273 Increase in at-risk-of-poverty threshold (in %) 5.9 6.3 9.9 8.9 -1.1 2.2 1.0 Inequality in income distribution Quintile share ratio (80/20) 3.4 3.4 3.3 3.4 3.2 3.4 3.5 3.4 Gini coefficient 23.8 23.7 23.2 23.4 22.7 23.8 23.8 23.7 At-risk-of-poverty rates for various socio-economic groups (in %) At-risk-of-poverty rates for various socio-economic groups (in %) 16.6 15.2 15.2 11.3 15.7 13.6 18.2 15.9 One adult, younger than 65 years 43.0 38.8 33.4 35.8 34.8 33.5 35.6 36.7 One adult, one dependent child 22.0 22.3 28.6 28.8 28.1 31.4 30.8 25.8 One adult 44.0 42.4 39.2 41.9 43.4 38.5 40.0 36.7 Material deprivation rate (3 of 9) (in %) 14.7 14.4 14.3 16.9 16.2 15.8 17.2 16.9 Severe material deprivation rate (4 of 9) (in %) 5.1 5.1 5.1 6.7 6.1 5.9 6.1 6.6 Persons living in households with very low work intensity2 (in %) 8.6 6.9 7.2 6.7 5.6 6.9 7.6 7.5 At-risk-of-poverty or social exclusion rate (in %) 18.5 17.1 17.1 18.5 17.1 18.3 19.3 19.6 Source: Eurostat, SILC. Note: 1including pensions. ^Households with low work intensity are households where adults aged 18-59 worked less than 20% of their total work potential in the year before the survey. Only persons aged 18-59 are included in the calculation. twenty years (2.0% in 2011), the high rate can mainly be explained by labour market developments. In 2011 the number of people in formal employment aged 15-64 declined by 1.3%, while the number of registered unemployed rose by 10.1%. The intervention laws aimed at preserving jobs also expired in 2011, and the rate of participation in active employment-policy schemes fell by 31.3% compared with the previous year. At the end of 2010 the retirement rate surged in anticipation of pension reform. The inflow of older people into unemployment also rose substantially, which we estimate is also a result of the expected pension reform and concurrent changes in unemployment insurance. The at-risk-of-poverty rate before social transfers including pensions rose slightly less, by 1 percentage point to 25.2%. Although the average pensions remained below the poverty threshold in 2011, and despite unchanged old-age pensions in nominal terms (0.1% in 2011) and a decline in other pensions, pensions remain a significant factor in poverty alleviation in Slovenia. Not taking account of pensions, the at-risk-of-poverty rate would be 16.7 percentage points higher. As a result of growth in the number of pension recipients (2.8%), pension expenditure rose by 1.5% in real terms in 2011. In 2012 the at-risk-of-poverty rate was much more influenced by social transfers than in 2011. Social transfers lifted above the at-risk-of-poverty threshold the largest proportion of households since 2007 (11.7%; 10.6% in 2010), even though in 2010 and 2011 intervention measures had been in place that had reduced growth in expenditure on cash benefits from social security schemes.46 As a result of a higher number of beneficiaries, the number of cash benefits from social transfers nevertheless increased by 0.5% relative to the previous year, and the average amount of benefits by 0.6%.47 The movement of at-risk-of-poverty rates cannot be fully explained only by the movement of receipts and the number 46 In 2010 the indexation of pensions and household cash benefits from public funds was reduced to half the rate stipulated by the law; in 2011 to a quarter. 47 Source: IMAD's Cash Benefits Database. of recipients. The concept of measuring the at-risk-of-poverty rate is namely bound to the whole household. Even if an individual's income is below the at-risk-of-poverty threshold, this does not necessarily mean that he/she will fall below the at-risk-of-poverty threshold. This also depends on whether or not he/she lives alone, i.e., on the income of other household members. Despite the unchanged at-risk-of-poverty rate, the "at-risk-of poverty and social exclusion rate"48 rose (by 0.3 percentage points to 19.6%) due to an increase in the severe material deprivation rate. Material deprivation measured in terms of deprivation in at least three items declined (by 0.3 percentage points to 16.9%), while severe material deprivation (deprivation in at least four items) rose (by 0.5 percentage points to 6.6%). This is the only sub-index of the composite indicator of the risk of poverty or social exclusion that deteriorated.49 One of Slovenia's targets under the EU 2020 strategy is a reduction in the rate of poverty or social exclusion, with the number of people who live at risk of poverty falling to around 320,000. Around 392,000 people lived at risk of poverty in 2012, and until 2007 the number had been declining. Since then Slovenia has been moving away from the target. 48 »The at-risk-of poverty or social exclusion rate" is a composite indicator comprising the at-risk-of-poverty rate, the material deprivation rate and the proportion of persons living in households with very low work intensity. 49 The at-risk-of-poverty rate and the proportion of persons in households with very low work activity (0-59 years) declined slightly. X "ö C a a (ü "5 (U MAIN INDICATORS 2008 2009 2010 2011 2012 2013 2014 2015 Autumn forecast 2013 GDP (real growth rates, in %) 3.4 -7.9 1.3 0.7 -2.5 -2.4 -0.8 0.4 GDP in EUR million (current prices and current exchange rate) 37,244 35,420 35,485 36,150 35,319 34,908 35,132 35,747 GDP per capita, in EUR (current prices and current exchange rate) 18,420 17,349 17,320 17,610 17,172 16,942 17,027 17,305 GDP per capita (PPS)1 22,700 20,300 20,500 21,000 20,900 GDP per capita (PPS EU27=100)' 91 86 83 83 81 Gross national income (current prices and current fixed exchange rate) 36,273 34,823 35,028 35,759 34,931 34,196 34,362 34,910 Gross national disposable income (current prices and current fixed exchange rate) 35,904 34,519 34,875 35,680 34,721 34,295 34,268 34,758 Rate of registered unemployment 6.7 9.1 10.7 11.8 12.0 13.3 13.6 13.5 Standardised rate of unemployment (ILO) 4.4 5.9 7.3 8.2 8.9 10.7 11.0 10.6 Labour productivity (GDP per employee) 0.8 -6.2 3.5 2.4 -1.7 -0.1 0.6 1.1 Inflation,2 year average 5.7 0.9 1.8 1.8 2.6 2.0 1.9 1.4 Inflation,2 end of the year 2.1 1.8 1.9 2.0 2.7 2.3 1.4 1.7 INTERNATIONAL TRADE - BALANCE OF PAYMENTS STATISTICS Exports of goods and services3 (real growth rates, in %) 4.0 -16.1 10.2 7.0 0.6 2.0 3.0 4.1 Exports of goods 1.8 -16.6 12.0 8.2 -0.1 1.6 3.1 4.3 Exports of services 14.3 -14.0 3.5 1.9 3.7 3.8 2.7 3.2 Imports of goods and services3 (real growth rates, in %) 3.7 -19.2 7.4 5.6 -4.7 0.1 2.1 3.9 Imports of goods 3.0 -20.2 8.3 6.6 -5.1 0.3 2.0 3.9 Imports of services 8.2 -12.4 2.6 -0.6 -2.2 -1.0 2.5 4.2 Current account balance, in EUR million -2,028 -173 -50 146 1,159 1,731 1,765 1,817 As a per cent share relative to GDP -5.4 -0.5 -0.1 0.4 3.3 5.0 5.0 5.1 Gross external debt, in EUR million 39,234 40,294 40,723 40,241 40,838 40.5155 As a per cent share relative to GDP 105.3 113.8 114.8 111.3 115.6 116.1 Ratio of USD to EUR 1.471 1.393 1.327 1.392 1.286 1.320 1.331 1.331 DOMESTIC DEMAND - NATIONAL ACCOUNTS STATISTICS Private consumption (real growth rates, in %) 2.3 -0.1 1.5 0.8 -4.8 -3.5 -2.7 0.5 As a % of GDP4 51.8 54.8 56.4 56.8 56.3 55.7 54.8 54.7 Government consumption (real growth rates, in %) 5.9 2.5 1.3 -1.6 -1.3 -2.5 -1.5 -1.0 As a % of GDP4 18.1 20.2 20.8 20.8 20.8 20.4 20.3 20.0 Gross fixed capital formation (real growth rates, in %) 7.1 -23.8 -15.3 -5.5 -8.2 -1.6 -4.0 -0.9 As a % of GDP4 28.6 23.1 19.7 18.6 17.8 17.7 17.2 17.1 Sources of data: SURS, BS, Eurostat, calculations and forecasts by IMAD (Autumn Forecast, September 2013). Notes: 1Measured 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 July 2013. PRODUCTION 2010 2011 2012 2011 2012 2013 2011 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 7 8 9 10 11 INDUSTRIAL PRODUCTION, y-o-y growth rates, % Industry B+C+D 7.1 1.3 -1.1 2.8 -0.8 -3.8 -0.2 -1.6 -0.4 -2.2 -2.3 -1.1 -2.1 -2.1 1.5 -3.1 -0.4 B Mining and quarrying 13.9 -7.9 -7.4 -9.0 -9.6 -8.7 -10.2 -2.3 -3.5 -13.3 8.7 -7.8 -9.1 -17.2 -2.4 -7.2 -3.0 C Manufacturing 7.6 1.1 -2.3 2.9 -1.1 -4.6 -1.0 -3.0 -2.1 -3.1 -3.6 -1.4 -2.5 -3.3 1.8 -3.8 -1.6 D Electricity, gas & steam supply1 1.8 5.0 10.5 3.8 5.1 4.0 8.3 12.7 16.1 6.1 7.9 2.4 4.3 11.9 -0.3 4.7 13.2 CONSTRUCTION,2 real indices of construction put in place, y-o-y growth rates, % Construction, total -16.9 -24.8 -16.8 -30.1 -24.5 -19.1 -15.3 -16.7 -13.2 -21.6 -24.5 -10.3 -26.2 -30.4 -16.3 -24.4 -7.8 Buildings -14.0 -39.7 -17.3 -46.5 -34.3 -35.9 -13.0 -6.7 -18.1 -30.0 -40.9 -24.8 -36.0 -36.7 -30.0 -33.3 -28.6 Civil engineering -19.0 -15.3 -16.6 -20.7 -19.9 -10.1 -21.2 -20.9 -10.1 -16.2 -8.5 -2.6 -21.2 -28.0 -9.7 -21.0 0.7 TRANSPORT, tonne-km in m, y-o-y growth rates, % Tonne-km in road transport 7.9 3.2 -3.4 1.5 3.6 11.7 6.0 -5.3 -5.9 -7.8 -2.7 - Tonne-km in rail transport 28.2 9.7 -7.5 10.8 8.5 -1.6 -8.7 -8.0 -5.8 -7.5 -0.1 - Distributive trades, y-o-y growth rates, % Total real turnover* 3.6 3.1 0.2 3.6 2.9 -0.5 0.6 -4.3 -3.2 -2.7 -4.9 -5.8 0.0 6.3 2.4 0.7 -0.5 Real turnover in retail trade -0.1 1.4 0.3 0.4 2.2 0.2 2.5 -2.7 -1.7 -1.0 -2.6 -3.8 -1.1 5.6 2.1 0.5 1.3 Real turnover in the sale and maintenance of motor vehicles 12.2 6.6 0.0 9.9 4.4 -1.9 -2.8 -7.2 -5.7 -6.4 -9.8 -10.3 2.2 8.0 3.0 1.3 -3.6 Nominal turnover in wholesale trade & commission trade 1.3 5.8 0.6 3.8 4.6 3.4 3.4 -0.6 1.2 -1.2 -5.4 1.2 -0.3 8.5 5.6 5.7 5.6 TOURISM, y-o-y growth rates, %, new methodology from 2009 onwards Total, overnight stays -1.5 5.3 -4.0 6.6 6.6 3.1 0.7 1.2 1.2 1.9 -3.4 -1.5 4.1 7.0 9.8 1.9 7.0 Domestic tourists, overnight stays -4.2 0.5 -10.9 0.4 0.8 0.4 -0.5 -4.6 -7.5 -5.2 -6.1 -5.3 -3.7 2.1 7.3 -2.9 8.6 Foreign tourists, overnight stays 0.7 9.1 0.9 11.3 10.2 5.5 2.0 5.1 6.3 8.1 -0.6 0.9 9.7 10.0 11.2 5.5 5.2 Nominal turnover market services (without distributive trades) 2.7 3.7 -1.1 4.7 4.8 -0.3 -0.6 0.5 -0.4 -3.7 -6.2 -2.8 2.2 4.8 7.5 -1.5 0.2 AGRICULTURE, y-o-y growth rates, % Purchase of agricultural products, SIT bn, since 2007 in EUR m 454.5 478.9 481.7 113.3 125.7 139.5 108.4 110.4 128.4 134.5 104.4 111.1 42.2 39.8 43.7 48.9 44.0 BUSSINES TENDENCY (indicator values**) Sentiment indicator -9 -7 -17 -4 -6 -10 -12 -16 -19 -21 -15 -1^ -5 -7 -6 -10 -10 Confidence indicator - in manufacturing -1 0 -11 3 0 -7 -6 -11 -13 -13 -9 -5 1 -1 -1 -8 -7 - in construction -57 -46 -41 -46 -44 -43 -40 -44 -40 -39 -30 -22 -46 -44 -43 -42 -45 - in services -3 1 -12 3 3 -4 -8 -8 -14 -18 -12 -12 3 5 2 0 -2 - in retail trade 7 8 2 12 1 12 6 4 1 -3 -4 2 1 -11 12 13 14 Consumer confidence indicator -25 -25 -35 -24 -24 -24 -26 -36 -39 -37 -29 -33 -23 -27 -23 -26 -26 Source of data: SURS. Note: 'Only 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. 2011 2012 2013 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 -8.3 0.5 3.3 -3.6 2.2 -3.9 -2.6 3.6 3.1 -6.8 5.2 -4.8 -7.5 0.2 -0.5 -6.0 3.4 -1.9 -4.6 2.7 - -17.0 6.1 -11.4 -22.0 -8.2 9.8 -7.0 -5.7 1.4 -5.8 1.2 -17.9 -24.9 -9.6 12.9 24.1 -2.5 -9.2 -11.5 3.1 -8.8 0.1 1.9 -4.2 1.9 -5.5 -4.9 1.8 1.6 -8.4 4.7 -5.4 -9.1 -1.1 -0.7 -8.3 3.1 -2.3 -4.9 2.6 -4.0 3.5 16.3 5.3 5.6 9.4 24.0 22.6 16.2 9.8 11.8 2.3 4.9 12.3 0.9 11.1 7.2 1.7 -1.4 2.9 - -24.0 -21.7 -24.3 -3.1 -13.5 -23.8 -11.7 -19.6 -14.4 -6.4 -22.5 -26.1 -14.8 -23.2 -14.0 -31.7 -18.7 -11.6 -1.7 0.5 -44.5 -31.1 -31.0 27.6 -7.2 -15.6 4.4 -23.9 -11.9 -18.6 -34.6 -19.4 -35.4 -38.2 -28.0 -50.1 -36.2 -24.2 -13.0 -19.6 -7.0 -18.1 -22.8 -22.0 -18.6 -26.5 -17.0 -17.1 -15.7 1.2 -15.0 -27.2 -2.1 -8.6 -0.6 -13.6 -6.3 -5.9 3.5 9.4 - - - - - - - - -1.8 2.6 1.0 -1.8 -4.0 -5.2 -3.7 -0.6 -3.8 -10.3 -3.4 -5.4 -8.0 -4.8 -8.7 -7.6 2.8 1.3 2.8 -4.1 - -1.1 4.0 3.5 -0.1 -3.5 -3.1 -1.5 -0.6 -0.8 -6.5 -4.1 -5.8 -7.5 -4.4 -9.4 -7.2 -1.7 -1.7 -3.7 -4.8 -3.4 -0.1 -3.5 -4.8 -5.1 -8.8 -7.7 -0.6 -10.8 -17.9 -2.1 -4.5 -9.2 -5.6 -7.4 -8.4 11.5 6.9 15.5 -2.8 -0.9 8.6 3.9 -0.9 0.1 0.4 -2.2 7.2 2.8 -5.4 4.8 -2.0 -6.5 1.5 -5.6 -10.9 5.8 -0.8 -1.2 0.6 1.2 0.2 -0.3 2.4 -0.9 7.9 -1.9 1.3 2.5 -1.4 -3.5 9.3 2.2 -10.5 0.2 0.6 -11.6 9.2 -2.4 3.4 - -3.3 -0.3 -3.3 2.8 -14.3 -1.6 0.9 -9.9 -4.1 -9.8 -6.6 -8.1 -0.7 -10.0 -1.3 -8.2 -6.0 2.0 -10.0 0.7 5.8 0.6 4.5 1.9 9.4 14.1 -3.7 8.4 6.3 3.1 -1.3 28.2 4.9 -10.8 2.5 9.3 -15.0 13.3 2.6 4.8 0.5 0.3 -3.6 1.4 -0.9 2.6 -0.1 1.1 0.6 -2.9 -4.2 -0.3 -6.6 -7.5 -3.6 -7.4 -2.6 -2.7 -3.0 1.0 46.7 34.3 35.1 39.0 37.0 38.3 35.1 47.2 37.9 43.3 47.1 41.0 46.3 33.9 32.2 38.4 37.5 38.7 34.9 45.1 - - -11 -12 -12 -12 -16 -14 -17 -16 -19 -21 -23 -22 -17 -16 -16 -13 -14 -14 -12 -12 -12 -12 -5 -3 -6 -8 -9 -11 -13 -11 -14 -15 -17 -14 -9 -12 -8 -7 -9 -5 -2 -5 -3 -3 -41 -43 -39 -39 -44 -44 -43 -41 -37 -41 -42 -41 -35 -30 -30 -30 -26 -20 -20 -22 -15 -16 -9 -11 -9 -5 -8 -7 -10 -11 -14 -17 -20 -19 -15 -13 -13 -11 -9 -14 -14 -11 -9 -14 10 5 8 6 8 2 3 -1 1 3 -3 -4 -3 -1 -6 -4 -6 -4 16 12 3 1 -20 -27 -26 -26 -39 -33 -36 -35 -35 -46 -39 -38 -34 -30 -31 -26 -26 -37 -37 -37 -33 -31 LABOUR MARKET 2010 2011 2012 2011 2012 2013 2011 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 8 9 10 FORMAL LABOUR FORCE (A=B+E) 935.5 934.7 920.2 937.5 931.1 933.3 926.6 923.7 915.2 915.2 912.9 913.8 930.0 931.5 935.3 PERSONS IN FORMAL EMPLOYMENT (B=C+D)' 835.0 824.0 810.0 828.4 823.9 821.7 812.7 816.5 809.1 801.7 789.2 795.0 823.0 824.5 824.4 In agriculture, forestry, fishing 33.4 38.8 37.0 40.1 38.8 38.0 35.2 37.8 37.4 37.4 37.4 38.9 38.8 38.8 38.1 In industry, construction 287.3 272.9 263.1 274.2 272.7 271.0 265.4 266.3 263.1 257.5 249.9 252.5 272.8 272.7 273.5 Of which: in manufacturing 188.6 184.8 182.9 184.7 184.4 186.2 184.6 184.1 182.5 180.4 177.8 177.6 184.0 185.2 186.8 in construction 78.5 67.8 59.8 69.3 67.9 64.4 60.5 61.6 60.1 56.9 52.0 54.6 68.4 67.0 66.2 In services 514.3 512.3 510.0 514.1 512.4 512.7 512.1 512.4 508.6 506.8 502.0 503.6 511.4 513.1 512.8 Of which: in public administration 52.0 51.4 50.7 51.5 51.4 51.3 50.9 51.2 50.8 50.0 49.3 49.3 51.5 51.2 51.3 in education, health-services, social work 116.7 118.8 120.9 118.8 118.5 120.1 120.7 121.6 120.3 121.0 120.7 121.1 118.1 119.3 119.8 FORMALLY EMPLOYED (C)1 747.2 729.1 717.0 731.9 728.9 727.4 720.9 722.7 716.2 708.4 696.1 700.0 728.1 729.7 730.1 In enterprises and organisations 685.7 671.8 662.6 673.9 671.3 670.7 666.4 667.4 661.4 655.1 645.8 648.5 670.5 672.2 672.7 By those self-employed 61.5 57.2 54.5 58.0 57.6 56.6 54.5 55.4 54.8 53.3 50.2 51.5 57.5 57.4 57.4 SELF-EMPLOYED AND FARMERS (D) 87.8 94.9 93.0 96.5 95.0 94.4 91.8 93.8 92.9 93.3 93.1 95.0 95.0 94.8 94.3 REGISTERED UNEMPLOYMENT (E) 100.5 110.7 110.2 109.1 107.2 111.6 114.0 107.2 106.1 113.5 123.7 118.8 107.0 107.0 110.9 Female 47.9 52.1 52.2 50.9 51.1 53.3 53.2 51.0 50.9 53.8 57.0 56.7 51.0 51.3 53.5 By age: under 26 13.9 12.9 11.9 12.6 11.3 13.4 12.7 10.8 10.1 14.0 14.2 13.0 11.1 11.2 13.6 aged over 50 31.4 39.0 38.2 39.1 38.7 38.2 39.2 38.1 37.4 38.1 40.7 39.3 38.8 38.4 38.2 Unskilled 37.5 39.5 39.4 39.2 38.1 39.3 41.0 39.2 37.8 39.5 43.4 40.6 37.9 38.3 38.7 For more than 1 year 42.8 50.2 55.2 48.6 49.6 53.8 57.2 55.1 54.5 53.9 54.4 54.3 49.6 50.4 51.8 Those receiving benefits 30.0 36.3 33.9 36.4 34.9 34.4 37.8 33.2 31.5 33.0 39.3 33.7 35.1 34.4 33.9 RATE OF REGISTERED UNEMPLOYMENT, E/A, in % 10.7 11.8 12.0 12.2 11.5 12.0 12.3 11.6 11.6 12.4 13.5 13.0 11.5 11.5 11.9 Male 10.1 11.4 11.5 11.9 10.9 11.3 11.9 11.1 11.0 11.9 13.4 12.5 10.9 10.8 11.1 Female 11.6 12.4 12.6 12.5 12.3 12.7 12.7 12.3 12.3 13.0 13.8 13.7 12.3 12.3 12.7 FLOWS OF FORMAL LABOUR FORCE 13.3 2.7 5.3 -6.9 0.0 5.7 -1.9 -5.2 -0.2 12.6 4.6 -6.0 -0.6 0.1 3.9 New unemployed first-job seekers 16.8 14.4 16.3 2.0 2.7 6.5 2.4 1.9 3.0 9.0 3.7 2.6 0.7 1.4 4.4 Redundancies 83.5 82.2 90.3 16.8 18.7 22.3 22.6 17.9 20.9 28.9 27.1 18.5 5.7 6.6 6.9 Registered unemployed who found employment 57.0 61.0 58.3 17.2 13.4 12.9 17.3 14.0 13.5 13.5 17.2 18.1 4.1 5.4 4.4 Other outflows from unemployment (net) 29.9 32.8 43.1 8.5 8.0 10.2 9.6 11.1 10.7 11.8 9.2 9.1 2.9 2.5 3.1 WORK PERMITS FOR FOREIGNERS 41.6 35.6 33.9 35.5 34.7 34.3 34.2 34.4 33.9 33.2 32.6 31.7 34.7 34.9 34.5 As % of labour force 4.4 3.8 3.7 3.8 3.7 3.7 3.7 3.7 3.7 3.6 3.6 3.5 3.7 3.7 3.7 Source of data: SURS, PDII, ESS. Note: 'In January 2005, the SORS adopted new methodology of obtaining data on persons in paid employment. The new source of data for employed and self-employed persons excluding farmers is the Statistical Register of Employment (SRE), while data on farmers are forecast using the ARIMA model based on quarterly figures for farmers from the Labour Force Survey. ^According to ESS. 2011 2012 2013 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 934.5 930.1 927.5 927.1 925.4 926.0 923.7 921.3 917.4 914.5 913.8 918.0 916.5 911.0 913.0 912.9 912.7 914.3 914.0 913.1 911.5 823.4 817.3 811.6 812.0 814.5 816.9 816.9 815.7 810.5 808.4 808.3 807.1 805.0 792.9 788.7 788.9 790.1 793.0 795.4 796.5 794.4 38.1 37.9 35.2 35.1 35.3 37.7 37.8 37.9 37.2 37.4 37.6 37.5 37.4 37.4 37.5 37.3 37.4 38.7 39.0 39.1 38.1 272.1 267.4 265.4 264.7 266.1 266.6 266.6 265.7 264.0 263.2 262.2 261.1 259.5 251.9 249.8 249.5 250.3 251.6 252.6 253.1 253.4 186.6 185.1 184.6 184.6 184.6 184.4 184.2 183.8 182.9 182.5 182.1 181.8 181.2 178.4 177.8 177.8 177.9 177.5 177.7 177.7 177.6 65.0 62.1 60.7 59.9 61.0 61.7 61.8 61.4 60.5 60.2 59.6 59.0 58.1 53.5 52.0 51.8 52.4 54.0 54.8 55.2 55.5 513.2 512.0 510.9 512.2 513.1 512.6 512.5 512.1 509.3 507.9 508.5 508.5 508.1 503.7 501.4 502.1 502.4 502.6 503.8 504.3 502.9 51.4 51.2 50.8 50.9 50.9 51.1 51.2 51.2 50.8 50.8 50.7 50.2 50.2 49.6 49.2 49.4 49.2 49.3 49.3 49.4 49.1 120.2 120.3 119.9 120.8 121.5 121.6 121.7 121.4 120.3 119.8 120.8 121.1 121.3 120.6 120.4 120.8 121.0 120.9 121.2 121.3 120.3 729.0 723.0 719.6 720.3 722.7 723.0 723.1 722.1 717.7 715.6 715.2 713.7 711.6 699.9 695.5 695.8 696.9 698.2 700.3 701.5 699.8 671.9 667.6 665.2 666.1 667.9 667.7 667.7 666.7 662.8 660.9 660.5 659.2 657.7 648.3 645.3 645.8 646.4 647.0 648.7 649.7 648.0 57.0 55.5 54.5 54.2 54.8 55.3 55.4 55.3 55.0 54.7 54.7 54.5 53.9 51.6 50.3 50.0 50.5 51.1 51.5 51.8 51.8 94.5 94.3 91.9 91.8 91.8 93.9 93.8 93.6 92.8 92.8 93.1 93.4 93.4 93.1 93.2 93.0 93.2 94.8 95.1 95.0 94.6 111.1 112.8 116.0 115.0 110.9 106.8 106.8 105.6 106.9 106.1 105.4 110.9 111.5 118.1 124.3 124.1 122.6 121.3 118.6 116.6 117.1 53.4 53.2 54.2 53.4 52.0 51.7 50.9 50.5 51.2 50.9 50.5 53.3 53.3 54.9 57.2 56.9 56.9 57.3 56.7 56.2 57.3 13.5 13.2 13.2 12.9 12.0 11.4 10.7 10.3 10.2 10.1 10.1 14.2 14.0 13.8 14.4 14.4 13.8 13.1 13.1 12.6 12.5 37.9 38.4 39.6 39.4 38.6 38.5 38.1 37.7 37.9 37.4 37.1 37.0 37.1 40.2 41.2 40.9 40.1 39.5 39.5 38.9 38.6 39.0 40.1 41.4 41.6 40.0 40.0 39.0 38.4 38.2 37.7 37.5 38.3 38.7 41.6 43.6 43.8 42.8 41.8 40.5 39.6 39.2 52.9 56.7 58.0 57.3 56.3 55.4 55.0 54.7 54.6 54.6 54.3 54.3 53.6 53.8 54.7 54.4 54.2 54.6 54.4 53.9 54.7 33.7 35.5 38.5 38.3 36.7 34.2 33.4 31.9 32.1 31.4 31.2 31.5 31.9 35.6 40.3 39.2 38.4 35.8 33.9 31.4 31.0 11.9 12.1 12.5 12.4 12.0 11.8 11.6 11.5 11.7 11.6 11.5 12.1 12.2 13.0 13.6 13.6 13.4 13.3 13.0 12.8 12.9 11.2 11.6 12.1 12.1 11.6 11.3 11.0 10.9 11.0 11.0 10.9 11.4 11.6 12.7 13.4 13.5 13.2 12.8 12.4 12.1 12.0 12.7 12.7 13.0 12.8 12.5 12.4 12.2 12.2 12.4 12.4 12.3 12.9 12.9 13.3 13.8 13.8 13.7 13.8 13.6 13.5 13.8 0.2 1.7 3.2 -0.9 -4.2 -1.8 -2.3 -1.2 1.3 -0.8 -0.6 5.4 0.6 6.6 6.2 -0.2 -1.4 -1.3 -2.8 -2.0 0.5 1.3 0.8 0.8 0.7 0.8 0.7 0.6 0.6 0.8 0.8 1.4 6.3 1.8 0.9 1.5 1.1 1.1 1.1 0.8 0.8 1.0 7.1 8.2 10.6 6.1 5.9 6.5 5.8 5.6 8.0 5.6 7.3 8.4 8.2 12.2 14.2 6.3 6.6 7.1 6.1 5.3 7.7 4.5 4.0 5.0 5.2 7.1 5.5 4.7 3.9 4.0 4.0 5.5 4.9 5.1 3.4 6.2 4.8 6.2 6.3 6.5 5.3 5.3 3.8 3.3 3.3 2.6 3.7 3.5 4.1 3.5 3.5 3.3 3.8 4.3 4.3 3.2 3.4 2.8 3.0 3.1 3.2 2.7 2.9 34.3 34.2 34.2 34.2 34.2 34.7 34.4 34.1 33.8 33.9 33.9 33.6 33.3 32.7 32.9 32.8 32.2 32.3 32.0 31.0 30.4 3.7 3.7 3.7 3.7 3.7 3.7 3.7 3.7 3.7 3.7 3.7 3.7 3.6 3.6 3.6 3.6 3.5 3.5 3.5 3.4 3.3 WAGES AND INDICATORS OF OVERALL COMPETITIVENESS 2010 2011 2012 2011 2012 2013 2011 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 9 10 11 GROSS WAGE PER EMPLOYEE, y-o-y growth rates, % Activity - Total 3.9 2.0 0.1 2.0 1.7 1.1 1.6 0.3 -0.7 -1.0 -1.0 -0.5 1.4 1.5 1.1 A Agriculture, forestry and fishing 5.7 3.1 -1.1 4.2 1.1 0.4 0.1 -1.0 -1.5 -2.0 -0.8 1.1 1.1 0.2 4.1 B Mining and quarrying 4.0 3.9 3.6 0.3 5.8 5.9 8.4 10.6 2.2 -5.2 4.1 -6.8 6.6 9.7 2.2 C Manufacturing 8.9 3.9 2.5 3.6 3.5 3.1 3.4 2.5 2.0 2.3 1.6 2.9 3.4 2.8 4.6 D Electricity, gas, steam and air conditioning supply 3.8 2.3 3.3 5.2 3.5 -0.5 5.6 3.9 4.9 -0.5 6.2 2.8 2.2 3.7 -8.1 E Water supply sewerage, waste management and remediation activities 2.2 -0.1 0.1 1.5 1.1 -2.7 2.1 -0.5 0.4 -1.4 0.3 0.1 1.1 2.2 -7.5 F Constrution 4.5 1.9 -2.5 1.5 0.3 0.5 -0.3 -2.8 -2.8 -3.8 -2.4 -2.1 0.8 -0.5 2.3 G Wholesale and retail trade, repair of motor vehicles and motorcycles 3.7 2.8 0.8 2.6 2.3 3.0 2.1 1.6 0.0 -0.3 -0.2 0.0 1.7 2.4 4.3 H Transportation and storage 2.0 2.7 -0.4 3.0 3.9 1.6 2.2 0.6 -1.7 -2.3 -1.1 0.2 -1.5 3.5 0.8 I Accommodation and food service activities 4.0 2.1 -0.8 2.4 2.0 -0.6 -0.4 -0.7 -1.0 -1.1 -1.3 -0.7 1.6 0.6 -1.9 J Information and communication 2.6 0.9 -0.4 1.2 1.8 -0.2 0.3 1.3 -1.2 -2.0 -0.6 -2.7 3.1 1.2 -0.4 K Financial and insurance activities 1.0 0.7 1.1 2.4 0.8 -2.4 4.5 -1.7 2.2 -0.3 -2.1 1.2 0.9 -0.6 -6.2 L Real estate activities 2.9 3.0 -0.6 2.9 3.4 1.6 1.1 -1.3 -0.6 -1.3 -1.1 0.2 3.4 1.7 1.0 M Professional, scientific and technical activities 1.6 -0.4 -1.1 0.2 -0.6 -1.6 -0.5 -0.8 -1.7 -1.3 -2.2 -3.4 -0.9 0.5 -2.9 N Administrative and support service activities 4.0 3.5 0.7 3.2 3.9 2.7 3.0 0.3 -0.9 0.2 -2.4 0.7 5.2 2.4 3.2 O Public administration and defence, compulsory social security -0.6 0.3 -1.8 0.6 -0.1 -0.4 -0.2 -1.5 -3.2 -2.4 -2.4 -2.1 -0.6 -1.3 0.2 P Education 0.6 0.2 -3.3 -0.1 -0.3 0.4 -0.3 -2.2 -5.0 -5.6 -5.4 -4.2 0.1 1.0 -0.4 Q Human health and social work activities -0.3 -0.7 -1.3 -0.8 -0.5 -0.5 -0.5 -1.0 -1.7 -2.1 -2.3 -2.3 -0.5 -0.5 -0.4 R Arts, entertainment and recreation 0.5 -0.7 -2.8 -1.2 -1.0 -0.3 -0.6 -1.5 -4.4 -4.6 -5.7 -3.8 -1.4 1.6 -1.6 S Other service activities 4.2 0.9 -0.9 1.5 0.6 -1.1 0.5 -0.6 -1.0 -2.4 -0.6 -0.7 1.1 0.0 -1.6 INDICATORS OF OVERALL COMPETITIVENESS1, y-o-y growth rates, % Effective exchange rate,2 nominal -2.1 -0.1 -1.2 0.6 0.4 0.1 -0.5 -1.3 -1.8 -1.4 0.2 0.6 0.4 -0.1 0.2 Real (deflator HICP) -1.8 -1.0 -1.1 -0.5 -1.2 -0.5 -0.9 -1.3 -1.2 -0.8 0.9 0.8 -0.6 -0.5 -0.3 Real (deflator ULC) -1.6 -2.2 -3.0 -1.5 -2.3 -2.4 -2.0 -3.3 -3.5 -3.2 -2.7 USD/EUR 1.3268 1.3917 1.2856 1.4393 1.4126 1.3480 1.3110 1.3196 1.2515 1.2974 1.3204 1.3066 1.3770 1.3706 1.3556 Source of data: SURS, ECB; calculations by IMAD. Note: 1 Change of the source for effective exchange rate series as of April 2012: a new source, ECB; before that, own calculations (IMAD). 2 Harmonised effective exchange rate - a group of 20 EU Member States and 17 euro area countries; an increase in value indicates appreciation of the national currency and vice versa. 2011 2012 2013 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 0.8 2.2 2.0 0.7 1.0 1.3 -1.3 -0.1 -0.7 -1.2 0.4 -2.4 -0.7 -0.3 -1.7 -1.0 -0.2 -0.8 -0.4 0.8 -3.5 2.1 0.3 -2.1 -0.1 -0.5 -2.5 1.3 -1.9 -3.9 2.5 -5.9 -2.0 1.8 -4.6 0.2 0.6 1.5 1.1 2.2 6.8 10.0 11.9 3.8 4.0 14.9 13.2 1.4 5.4 -0.2 1.5 1.7 -18.0 10.4 0.6 1.1 -5.4 -10.3 -4.8 -1.8 1.8 4.5 3.8 1.9 2.7 3.9 1.0 4.3 1.3 0.3 5.2 0.5 1.4 3.5 0.3 1.1 4.4 2.3 2.0 3.4 5.6 5.5 8.0 3.6 5.2 6.5 0.3 4.0 2.6 8.3 7.8 -6.6 -0.5 5.0 2.6 10.9 6.6 0.7 1.3 10.0 -1.3 3.1 2.8 0.5 0.4 0.7 -2.5 4.0 -0.1 -2.6 2.2 -7.0 1.5 2.7 -1.1 -0.8 1.6 -0.2 -1.1 -0.5 -0.5 1.1 1.4 -3.1 -1.3 -0.4 -6.6 -1.4 -1.9 -5.1 0.2 -6.8 -4.6 -1.2 -3.0 -2.9 -2.2 -3.2 -0.9 1.1 2.4 3.3 2.2 1.0 2.9 1.8 0.0 0.7 0.5 -1.0 0.5 -0.8 -0.6 -0.6 -0.5 0.4 -0.5 0.6 -0.1 1.1 0.8 3.7 0.8 2.0 1.5 2.1 -1.9 -6.3 -1.3 2.7 -1.1 -3.9 -1.6 -1.1 -1.4 -0.8 0.7 0.3 -0.4 1.7 -0.3 0.2 0.4 -1.7 -1.4 0.5 -1.2 -0.1 -1.1 -1.9 -0.9 -0.9 -1.4 -2.4 -1.3 -0.2 0.1 -0.6 -1.7 -0.7 -1.3 0.1 0.2 0.5 2.3 1.7 -0.1 0.8 -1.2 -3.1 0.1 -7.1 1.6 -1.1 -0.5 -0.1 -4.3 -1.9 -1.9 -0.8 0.5 1.5 8.4 3.8 -0.4 -4.4 -0.2 1.8 1.8 3.0 3.5 -4.0 0.3 -1.0 -3.6 -1.6 0.4 3.5 -0.1 4.0 2.0 2.3 2.5 -1.5 -0.1 -1.3 -2.4 0.1 -1.0 -1.1 0.1 -2.3 -1.6 -0.4 -2.1 -0.7 -0.2 0.6 0.2 -0.3 -2.3 0.0 -0.5 -1.1 -0.7 1.0 -2.7 -0.8 -1.9 -2.4 -0.9 -1.9 -1.0 -0.3 -3.5 -2.8 -3.0 -4.1 -3.0 -2.3 2.5 2.1 5.1 2.0 -0.2 1.7 -0.6 -0.1 0.0 -2.5 1.4 -1.1 0.5 -0.5 -4.3 -2.3 1.4 0.0 0.9 0.8 -0.1 0.6 -0.4 -0.7 -0.7 -0.3 -3.5 -3.4 -3.3 -2.9 -2.9 -2.6 -1.6 -1.7 -2.9 -2.6 -2.2 -3.0 -1.0 -0.4 0.5 0.1 -0.6 -0.5 -1.5 -0.4 -4.6 -4.8 -5.0 -5.2 -5.8 -5.8 -5.3 -5.9 -5.0 -5.4 -4.2 -5.8 -2.5 -2.4 -0.5 -0.5 -0.4 -0.6 -0.3 -1.0 -1.6 -2.2 -2.0 -1.0 -2.8 -3.0 -0.4 -2.7 -2.5 -1.6 -3.0 -2.1 -1.7 -2.2 -0.8 -1.3 -1.9 1.3 -0.9 0.0 -3.5 -4.1 -3.6 -5.4 -6.3 -3.9 -3.7 -4.7 -4.7 -7.5 -4.0 -3.2 -4.2 -0.7 -1.8 2.0 -0.4 0.0 -0.6 0.1 -1.2 -0.1 -2.2 -0.7 -1.2 -4.0 -1.9 -0.8 -0.1 -0.7 1.0 -1.2 -1.9 -0.8 0.1 -0.1 -0.4 -0.9 -1.2 -1.2 -1.5 -1.8 -2.1 -1.5 -1.6 -1.7 -0.9 0.1 0.4 0.1 0.2 0.4 1.1 1.6 -0.7 -0.9 -0.6 -1.3 -1.1 -1.4 -1.5 -1.5 -1.5 -0.5 -1.0 -1.3 -0.2 0.8 1.3 0.5 0.4 0.4 1.6 2.7 1.3179 1.2905 1.3224 1.3201 1.3162 1.2789 1.2526 1.2288 1.2400 1.2856 1.2974 1.2828 1.3119 1.3288 1.3359 1.2964 1.3026 1.2982 1.3189 1.3080 PRICES 2010 2011 2012 2011 2012 2013 2011 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 6 7 8 9 10 CPI, y-o-y growth rates, % 1.8 1.8 2.6 1.7 1.3 2.5 2.5 2.5 2.9 2.6 2.3 1.5 1.3 0.9 0.9 2.1 2.7 Food, non-alcoholic beverages 1.0 4.4 4.1 5.0 3.7 5.1 3.9 4.2 3.9 4.4 4.4 3.6 4.6 2.9 3.8 4.4 5.6 Alcoholic beverages, tobacco 7.2 5.7 6.5 6.3 3.7 4.9 4.2 5.1 7.2 9.5 10.6 7.5 6.2 5.4 2.8 3.0 4.8 Clothing and footwear -1.9 -1.5 -0.2 -2.4 -4.2 0.9 -2.2 1.6 0.7 -0.8 2.1 -1.2 -3.0 -4.2 -4.9 -3.4 2.0 Housing, water, electricity, gas 10.2 5.6 3.8 5.4 4.8 5.4 4.9 4.2 4.4 1.8 2.1 2.9 3.9 4.4 4.9 5.1 5.5 Furnishings, household equipment 1.4 2.7 0.1 3.9 2.4 1.7 1.2 0.0 -0.1 -0.9 -1.1 -1.8 3.9 3.5 1.7 2.1 1.8 Medical, pharmaceutical products 2.1 1.6 0.4 2.6 0.8 0.3 -0.2 1.4 0.2 0.3 -0.2 -2.1 2.8 1.0 0.8 0.5 0.5 Transport -0.3 1.0 3.3 0.5 1.1 1.7 2.6 3.2 3.9 3.5 1.5 -0.5 0.4 0.1 1.1 2.0 1.9 Communications 1.4 1.2 -2.4 1.6 2.3 -1.8 -1.2 -2.9 -3.6 -2.0 -3.8 -1.9 0.5 3.4 2.5 0.9 -1.8 Recreation and culture 0.4 -1.5 1.4 -1.0 -1.7 -0.8 2.6 1.2 1.2 0.4 -0.3 -0.5 -1.3 -1.8 -2.0 -1.2 -0.3 Education 1.6 1.7 2.9 1.6 1.9 1.4 1.1 1.3 4.3 4.8 4.6 4.6 1.6 1.6 1.6 2.5 1.8 Catering services -2.5 -6.8 4.5 -10.9 -6.2 2.0 2.3 2.5 3.7 9.4 9.2 8.8 -10.5 -10.2 -9.8 2.7 2.0 Miscellaneous goods & services 1.4 2.2 2.4 2.3 2.4 2.6 2.5 1.2 3.3 2.8 2.4 2.7 2.2 2.2 2.3 2.7 2.4 HCPI 2.1 2.1 2.8 2.0 1.5 2.6 2.5 2.5 3.2 3.0 2.7 1.8 1.6 1.1 1.2 2.3 2.9 Core inflation (excluding fresh food and energy) 0.3 1.3 2.0 1.1 1.2 2.3 2.2 1.8 2.0 1.9 1.9 1.4 1.1 1.0 0.8 1.9 2.3 PRODUCER PRICE INDICES, y-o-y growth rates, % Total 2.1 4.5 0.9 4.8 4.1 3.6 1.3 0.8 0.6 0.6 0.8 0.2 4.4 4.1 4.2 4.1 3.7 Domestic market 2.0 3.8 1.0 4.1 3.7 2.9 1.1 0.9 0.9 1.2 1.1 0.3 3.7 3.7 3.8 3.6 3.1 Non-domestic market 2.2 5.3 0.7 5.5 4.6 4.4 1.6 0.7 0.4 0.1 0.4 0.2 5.1 4.6 4.6 4.6 4.3 euro area 2.2 6.1 0.1 6.5 5.1 4.6 0.8 0.2 0.1 -0.5 0.4 0.0 5.8 4.8 5.2 5.2 4.4 non-euro area 2.1 3.6 2.0 3.1 3.5 3.8 3.4 2.0 1.3 1.5 0.6 0.7 3.6 4.1 3.2 3.2 4.1 Import price indices 7.4 5.4 1.9 5.5 4.5 2.9 1.9 1.2 1.3 3.2 0.8 -0.5 5.0 4.5 4.8 4.3 4.1 PRICE CONTROL,1 y-o-y growth rates, % Energy prices 16.5 10.9 12.7 9.9 8.3 10.8 12.1 12.5 14.5 11.6 5.6 0.1 7.9 6.3 9.1 9.6 10.8 Oil products 17.3 11.9 13.0 10.5 9.9 11.7 12.3 12.7 14.4 12.6 6.4 0.4 8.7 7.7 10.8 11.3 12.3 Transport & communications 1.8 1.1 1.6 1.1 1.1 1.1 0.7 0.0 0.0 5.7 8.6 8.6 1.1 1.1 1.1 1.1 1.1 Other controlled prices 1.3 0.0 -0.6 0.1 0.0 -0.2 -0.2 -0.3 0.1 -1.8 -3.9 -2.9 0.0 0.0 0.0 0.0 -0.2 Direct control - total 14.2 2.8 9.2 1.5 0.5 2.1 7.3 9.5 11.0 8.9 4.3 0.5 0.1 -1.0 1.1 1.4 2.2 Source of data: SURS; calculations by IMAD. Note: 1 The structure of groups varies. Data for individual years are not fully comparable to those published previously. On 1 July 2007, the electricity market was liberalised. Since July 2007, the data are not comparable. 2 After a longer period of unchanged prices, at the beginning of 2013, the Decree on the pricing of mandatory local public services in the field of environmental protection (Official Gazette of the RS, No. 87/2012) transferred the responsibility for approving price changes to local communities. 2011 2012 2013 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 2.7 2.0 2.3 2.9 2.3 2.6 2.4 2.3 2.4 2.9 3.3 2.7 2.3 2.7 2.4 2.7 2.0 1.5 1.2 1.9 2.6 2.2 4.8 4.9 3.9 3.9 4.0 4.7 4.3 3.7 4.1 3.7 4.0 4.3 4.2 4.7 5.2 4.1 3.9 3.3 3.1 4.4 4.4 4.3 4.9 4.9 4.1 3.9 4.7 5.1 5.2 5.1 7.4 7.1 7.0 9.6 9.5 9.4 11.2 10.7 10.0 7.8 7.4 7.5 7.5 7.5 2.1 -1.5 -2.2 -3.5 -1.2 0.2 3.0 1.6 0.8 1.8 -0.3 -1.5 -1.7 0.8 1.6 6.5 -1.3 0.0 -3.1 -0.5 1.1 0.1 5.7 5.0 4.7 5.3 4.7 4.0 3.7 4.9 3.9 4.2 5.2 2.7 1.5 1.3 0.7 2.8 2.9 3.3 2.8 2.5 3.4 2.7 2.0 1.4 1.3 1.5 0.8 0.7 0.1 -0.7 -0.3 0.1 -0.2 -0.8 -1.2 -0.7 -0.5 -1.5 -1.1 -2.2 -1.9 -1.4 -1.3 -0.8 0.2 0.0 -0.3 -0.3 0.1 1.5 1.5 1.3 0.1 0.2 0.3 0.3 0.4 0.2 -0.1 0.2 -0.7 -2.0 -2.1 -2.2 0.0 0.3 1.9 1.4 2.0 2.5 3.3 4.1 2.8 2.6 2.4 4.5 4.7 3.9 3.3 3.4 2.0 1.9 0.6 -0.9 -0.9 0.2 2.0 0.0 -0.3 -3.3 -0.1 -1.2 -2.4 -2.6 -3.2 -2.8 -3.1 -4.4 -3.2 -1.6 -3.3 -1.1 -3.6 -4.6 -3.2 -2.2 -2.3 -1.3 0.0 2.5 -0.9 -1.2 0.8 6.8 0.4 0.9 1.2 1.6 1.3 1.2 1.2 0.1 0.9 0.2 -0.4 -0.4 -0.1 -0.4 -0.5 -0.6 0.7 0.9 0.9 1.6 1.0 1.1 1.2 1.3 1.3 1.3 1.3 5.9 5.7 4.8 5.0 4.7 4.6 4.7 4.7 4.6 4.6 4.6 4.6 0.1 2.0 2.2 2.5 2.4 2.1 2.8 2.6 2.1 1.4 0.9 8.9 9.1 9.7 9.3 9.3 9.2 9.0 8.6 8.6 9.1 9.6 9.9 2.5 2.8 2.9 2.7 1.9 1.9 1.1 0.6 2.5 3.7 3.7 3.1 2.9 2.4 2.4 2.5 2.4 2.1 2.9 3.1 1.2 0.2 2.8 2.1 2.3 2.8 2.4 2.9 2.4 2.4 2.6 3.1 3.7 3.2 2.8 3.1 2.8 2.9 2.2 1.6 1.6 2.2 2.8 2.2 2.5 2.1 2.4 2.6 1.6 1.9 1.9 1.7 1.9 2.0 2.0 1.9 1.8 2.0 1.9 2.2 1.6 1.4 1.3 1.5 2.0 2.1 3.6 3.6 2.4 0.8 0.7 0.7 1.0 0.7 0.8 0.4 0.7 0.8 0.7 0.4 0.4 1.1 0.8 0.5 0.2 0.0 -0.3 0.0 2.9 2.6 1.9 0.7 0.6 0.7 1.3 0.8 0.9 0.8 0.9 1.2 1.3 1.0 1.1 1.1 1.1 0.6 0.1 0.1 0.1 0.2 4.3 4.5 3.0 0.9 0.8 0.8 0.8 0.5 0.6 0.1 0.6 0.4 0.1 -0.2 -0.3 1.0 0.5 0.5 0.3 -0.2 -0.6 -0.2 4.7 4.7 2.8 -0.1 -0.2 0.0 0.4 0.1 0.5 -0.5 0.2 -0.1 -0.6 -0.8 -0.8 1.2 0.7 0.3 0.0 -0.4 -0.8 -0.3 3.5 4.0 3.5 3.3 3.4 2.8 1.7 1.4 1.0 1.3 1.6 1.7 1.8 1.1 1.0 0.6 0.2 0.8 1.1 0.3 -0.3 0.0 3.0 1.8 0.9 2.1 2.8 2.0 1.2 0.3 0.1 1.1 2.7 2.9 3.7 3.0 2.1 0.6 -0.3 -0.6 -1.3 0.5 1.2 -0.4 11.9 9.7 10.3 12.0 13.8 14.7 11.8 10.9 10.1 14.6 18.8 14.7 10.4 9.8 7.5 6.4 2.9 -0.6 -0.7 1.8 3.8 -1.3 12.7 10.3 10.5 12.2 14.2 15.3 11.9 10.8 9.2 14.4 19.4 15.8 11.4 10.5 8.1 7.7 3.6 -0.8 -0.9 3.1 5.5 -0.3 1.1 1.1 1.1 1.1 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 8.6 8.6 8.6 8.6 8.6 8.6 8.6 8.6 17.3 17.3 -0.2 -0.2 -0.2 -0.2 -0.3 -0.3 -0.3 -0.3 0.1 0.1 0.1 -3.0 -1.1 -1.1 -3.9 -3.9 -3.9 -3.8 -3.8 -1.1 -0.8 -0.8 2.9 1.3 2.0 9.5 10.6 11.1 9.0 8.5 7.9 11.0 14.0 10.1 8.5 8.1 5.6 4.9 2.4 -0.1 -0.3 2.0 4.3 0.5 BALANCE OF PAYMENTS 2010 2011 2012 2011 2012 2013 2011 Q^ Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 7 8 9 10 BALANCE OF PAYMENTS, in EUR m Current account -50 146 1,159 120 -47 0 96 262 320 482 497 685 45 -110 17 84 Goods1 -830 -957 -110 -189 -194 -356 -149 -45 60 24 150 235 29 -132 -91 -39 Exports 18,973 21,450 21,631 5,539 5,285 5,403 5,364 5,559 5,283 5,424 5,405 5,653 1,798 1,546 1,942 1,849 Imports 19,804 22,407 21,741 5,728 5,479 5,758 5,514 5,604 5,223 5,400 5,255 5,418 1,769 1,677 2,033 1,888 Services 1,281 1,476 1,803 406 377 375 418 444 528 414 499 527 89 132 155 152 Exports 4,593 4,842 5,166 1,186 1,393 1,217 1,118 1,237 1,502 1,310 1,195 1,303 465 467 461 414 Imports 3,312 3,365 3,363 781 1,016 841 700 793 974 896 696 776 376 335 305 263 Income -588 -524 -552 -128 -235 -81 -145 -168 -198 -42 -72 -80 -93 -87 -55 -29 Receipts 583 936 699 249 221 259 131 188 174 206 224 234 74 65 82 81 Expenditure 1,172 1,460 1,251 378 456 340 276 356 372 247 296 314 167 153 137 110 Current transfers 88 151 18 32 4 62 -28 31 -70 86 -80 3 20 -23 8 0 Receipts 1,231 1,404 1,410 328 319 371 348 366 285 411 332 353 120 74 125 96 Expenditure 1,143 1,253 1,392 296 315 310 377 336 355 325 412 350 100 97 118 96 Capital and financial account 530 -474 -1,206 -257 -81 -175 67 -249 -540 -484 -897 -913 57 -43 -94 -297 Capital account 54 -85 -92 0 -3 -80 -24 11 -30 -49 -5 -40 -5 -2 5 0 Financial account 476 -389 -1,114 -257 -78 -94 91 -260 -511 -434 -891 -873 62 -41 -99 -297 Direct investment 428 633 166 236 260 151 146 98 84 -162 -61 -650 69 68 123 -83 Domestic abroad 156 -85 212 32 54 -156 41 127 39 5 -108 56 -44 41 57 -77 Foreign in Slovenia 272 718 -46 204 206 307 105 -29 45 -167 46 -706 113 26 66 -6 Portfolio investment 1,956 1,839 -218 -297 -441 -20 -923 124 -982 1,564 132 1,977 70 -63 -448 225 Financial derivatives -117 -155 -203 -19 -28 -24 -23 -21 -31 -129 19 -229 -3 -4 -21 -8 Other investment -1,810 -2,777 -890 -188 98 -221 851 -455 439 -1,726 -1,048 -1,952 -62 -57 218 -417 Assets 779 -1,490 -1,474 -169 -363 567 -1,466 -95 205 -118 -1,295 -671 -504 -25 166 -361 Commercial credits -174 -49 65 -88 44 316 -347 -35 109 339 -359 -45 -39 202 -118 -135 Loans 203 -55 -319 -22 48 19 3 -95 84 -310 25 -181 -20 27 41 -48 Currency and deposits 669 -1,341 -1,177 -58 -422 249 -1,131 11 -33 -24 -956 -369 -431 -235 244 -187 Other assets 81 -46 -45 0 -33 -18 10 24 45 -124 -6 -77 -14 -18 -1 9 Liabilities -2,589 -1,287 584 -19 461 -788 2,317 -359 234 -1,608 247 -1,281 442 -32 51 -56 Commercial credits 362 107 265 -19 -82 17 161 136 -96 63 -303 99 -7 -253 178 -20 Loans -986 -1,234 -729 -298 203 -752 -121 -223 -178 -208 374 602 240 -41 5 -201 Deposits -1,954 -169 1,026 334 340 -57 2,287 -288 530 -1,503 188 -1,981 202 237 -99 158 Other liabilities -11 9 23 -36 0 3 -11 17 -22 39 -12 -2 7 25 -33 7 International reserves2 19 72 31 12 33 19 39 -6 -21 19 67 -19 -12 15 29 -15 Statistical error -480 328 47 137 128 174 -163 -13 220 2 400 228 -102 153 77 214 EXPORTS AND IMPORTS BY END-USE OF PRODUCTS, in EUR m Export of investment goods 1,875 2,042 2,112 532 514 540 477 569 514 552 516 524 182 156 176 175 Intermediate goods 10,172 12,008 12,138 3,124 3,024 2,931 3,063 3,101 3,019 2,955 3,077 3,168 1,014 910 1,100 1,037 Consumer goods 6,592 6,950 6,811 1,769 1,631 1,803 1,685 1,734 1,604 1,788 1,676 1,833 564 441 627 597 Import of investment goods 2,324 2,505 2,402 617 589 736 562 584 570 687 644 661 205 166 219 203 Intermediate goods 12,247 14,107 14,005 3,610 3,472 3,490 3,636 3,578 3,410 3,382 3,473 3,462 1,125 1,065 1,283 1,209 Consumer goods 5,530 5,943 5,671 1,526 1,502 1,524 1,435 1,400 1,350 1,486 1,395 1,491 476 474 552 504 Source of data: BS, SURS. Note: 1Exports and imports (F.O.B.) include also the adjustment for exports and imports of goods by ITRS and duty-free shops reports. 2Reserve assets of the BS. 2011 2012 2013 11 12 1 2 3 4 5 6 7 8 9 10 11 12 12 3 4 5 6 7 7 -91 -23 -76 195 89 23 150 59 61 200 196 230 56 61 80 337 295 139 251 231 -106 -211 -115 -39 4 7 -31 -21 48 -73 84 43 98 -117 -47 62 124 137 -15 119 116 1,913 1,641 1,646 1,726 1,992 1,807 1,862 1,891 1,829 1,606 1,848 1,961 1,926 1,537 1,717 1,741 1,935 1,965 1,847 1,832 1,947 2,019 1,851 1,761 1,765 1,988 1,800 1,892 1,912 1,781 1,679 1,764 1,918 1,828 1,654 1,764 1,680 1,810 1,828 1,862 1,713 1,832 127 97 152 106 161 148 156 140 147 189 192 183 145 86 164 118 210 165 179 177 194 381 421 377 325 417 392 410 434 512 512 477 467 415 427 385 347 458 422 429 449 530 254 325 225 219 256 244 254 295 366 323 285 284 270 341 220 229 248 257 250 273 336 -37 -14 -35 -41 -68 -44 -99 -25 -110 -32 -56 -8 -14 -19 -26 -24 -23 -21 -31 -28 -31 78 100 41 42 48 54 63 72 54 55 65 58 59 88 74 73 77 78 78 78 78 115 114 77 83 116 98 162 97 164 87 121 66 73 108 100 97 99 99 109 106 109 24 38 -25 -101 98 -23 -3 56 -25 -24 -21 -21 1 106 -30 -76 26 14 6 -16 -47 117 158 73 68 207 97 113 156 112 85 88 90 109 212 86 95 151 138 115 102 100 94 120 97 169 110 120 116 100 137 109 109 112 108 106 116 171 125 124 109 118 147 -53 176 87 152 -172 -168 -162 81 -55 -243 -242 -384 -348 248 -402 -96 -409 -342 -178 -349 -269 11 -91 -4 -6 -14 24 5 -18 9 -10 -29 -13 -40 3 -1 -5 0 0 -27 -13 4 -64 267 90 158 -158 -193 -167 100 -65 -233 -213 -372 -308 245 -402 -91 -409 -342 -151 -336 -273 -51 285 -53 77 123 -92 144 45 87 -28 25 -45 31 -149 53 30 -137 -697 0 58 49 3 -83 -12 17 36 -6 53 80 13 43 -16 -6 42 -32 -6 -3 -91 -7 26 40 -4 -54 367 -41 60 87 -86 91 -35 74 -71 41 -39 -11 -117 60 32 -46 -691 -26 18 53 -179 -66 221 -820 -324 76 133 -86 -644 -152 -187 1,674 -54 -56 -156 17 271 -143 2,585 -405 -129 2 -18 0 9 -31 -6 -7 -7 -9 -3 -19 -44 -40 -44 -34 65 -8 -8 -68 -153 -83 120 76 -10 834 27 -171 -435 151 541 -46 -56 -1,982 -256 512 -288 -213 -569 490 -2,694 224 -28 301 628 -612 102 -956 -383 119 169 122 147 -64 -294 -422 597 -343 -385 -591 -246 -426 -26 -15 42 409 -86 -85 -176 24 -32 -27 16 158 -65 -28 37 330 -65 -80 -214 -30 58 -73 -3 23 44 22 128 -147 -153 -28 86 40 51 -8 17 -49 -277 4 9 13 -71 -68 -41 24 233 203 -544 42 -629 -258 164 105 36 -77 8 -132 -406 514 -291 -315 -377 -75 -418 98 -38 3 -29 -3 17 -4 4 15 5 30 15 0 -151 -4 31 8 1 -13 -70 3 -10 2 -181 -551 602 732 983 212 -554 -18 419 -193 8 -1,688 166 -85 55 172 22 735 -2,268 250 -13 133 -96 -79 147 93 -16 -72 224 -8 -144 56 6 18 40 -234 86 -152 2 34 62 -134 -429 -121 77 -211 14 103 -213 -114 -83 -62 -32 14 -194 -28 34 -151 492 675 -14 -59 -396 103 -319 550 833 904 115 -278 -126 527 12 -9 -1,726 358 -136 274 234 -319 68 -2,299 251 524 12 -15 54 -36 -29 10 9 -2 -17 1 -6 18 -17 38 -18 3 2 -10 12 -4 -7 44 -10 -68 59 48 0 -2 -4 -41 -3 23 26 11 -18 22 11 33 17 25 -61 -82 46 -85 -64 -76 -23 80 139 -231 -4 182 42 188 118 -304 341 15 72 47 39 98 37 179 186 144 159 175 183 189 196 172 164 179 193 191 168 155 159 202 180 176 168 N/A 1,058 837 957 996 1,110 1,009 1,049 1,042 1,052 935 1,032 1,116 1,062 777 1,007 989 1,082 1,110 1,051 1,007 N/A 632 573 500 528 657 559 572 603 554 460 590 610 628 550 507 557 612 635 582 616 N/A 226 307 174 159 228 186 201 197 217 163 190 219 209 259 195 195 254 218 259 184 N/A 1,262 1,018 1,171 1,171 1,294 1,177 1,209 1,192 1,175 1,096 1,140 1,244 1,160 978 1,222 1,109 1,144 1,201 1,200 1,061 N/A 537 483 447 456 533 449 475 475 442 447 461 530 508 448 444 467 483 493 489 509 N/A MONETARY INDICATORS AND INTEREST RATES 2010 2011 2012 2011 2012 4 1 5 1 6 1 7 1 8 1 9 1 10 1 11 1 12 1 1 2 SELECTED CLAIMS OF OTHER MFI ON DOMESTIC SECTORS, end of the month, in EUR m Claims of the BS on central government 138 102 221 76 76 76 76 76 77 76 83 102 111 119 Central government (S. 1311) 3,419 4,299 5,057 3,319 3,327 3,282 3,276 3,328 3,355 3,387 3,436 4,299 4,465 4,580 Other government (S. 1312, 1313, 1314) 526 584 610 532 530 533 534 536 535 541 554 584 588 589 Households (S. 14, 15) 9,282 9,454 9,267 9,304 9,383 9,425 9,507 9,490 9,468 9,481 9,467 9,454 9,421 9,391 Non-financial corporations (S. 11) 21,646 20,876 19,470 21,782 21,714 21,725 21,656 21,537 21,369 21,444 21,434 20,876 20,976 20,896 Non-monetary financial institutions (S. 123, 124, 125) 2,497 2,229 2,135 2,350 2,341 2,325 2,323 2,292 2,298 2,286 2,277 2,229 2,210 2,234 Monetary financial institutions (S. 121, 122) 5,811 5,445 5,194 5,179 5,275 5,259 5,224 5,422 5,375 5,491 5,224 5,445 5,111 4,846 Claims on domestic sectors, TOTAL In domestic currency 35,994 35,692 34,558 35,736 35,811 35,836 35,720 35,854 35,763 35,970 35,784 35,692 35,407 35,334 In foreign currency 1,843 1,536 1,309 1,689 1,751 1,724 1,794 1,705 1,628 1,586 1,557 1,536 1,529 1,505 Securities, total 5,345 5,659 5,862 5,043 5,008 4,990 5,007 5,046 5,008 5,075 5,052 5,659 5,837 5,697 SELECTED OBLIGATIONS OF OTHER MFI ON DOMESTIC SECTORS, end of the month, in EUR m Deposits in domestic currency, total 26,767 28,420 29,582 27,080 27,205 27,384 27,392 27,423 27,337 27,631 27,376 28,420 28,359 27,926 Overnight 8,155 8,245 8,678 8,206 8,237 8,259 8,303 8,241 8,236 8,058 8,436 8,245 8,399 8,195 With agreed maturity -short-term 8,193 7,868 7,056 8,477 8,614 8,615 8,471 8,468 8,369 8,372 7,791 7,868 7,688 7,468 With agreed maturity -long-term 10,337 12,248 13,780 10,375 10,324 10,470 10,567 10,662 10,683 11,148 11,089 12,248 12,180 12,171 Short-term deposits redeemable at notice 82 59 68 22 30 40 51 52 49 53 60 59 92 92 Deposits in foreign currency, total 463 579 552 444 459 464 488 476 486 494 538 579 570 564 Overnight 285 386 372 286 295 304 317 305 320 329 365 386 391 384 With agreed maturity -short-term 121 133 123 107 111 107 113 108 109 109 114 133 117 120 With agreed maturity -long-term 55 59 56 50 52 52 57 62 57 55 58 59 61 59 Short-term deposits redeemable at notice 2 1 1 1 1 1 1 1 0 1 1 1 1 1 INTEREST RATES OF MONETARY FINANCIAL INSTITUTIONS, % New deposits in domestic currency Households Overnight deposits 0.21 0.22 0.20 0.21 0.21 0.21 0.23 0.23 0.24 0.24 0.26 0.24 0.24 0.24 Time deposits with maturity of up to one year 1.81 2.15 2.31 2.08 2.15 2.20 2.20 2.18 2.17 2.24 2.27 2.28 2.39 2.35 New loans to households in domestic currency Housing loans, 5-10 year fixed interest rate 5.53 5.46 5.48 5.51 5.42 5.52 5.39 5.49 5.45 5.50 5.43 5.27 5.37 5.40 New loans to non-financial corporations in domestic currency Loan over EUR 1 million, 1-5 year fixed interest rate 5.76 5.69 5.32 5.25 5.82 5.97 6.17 6.48 5.91 4.25 5.20 6.51 3.79 3.00 INTEREST RATES OF THE EUROPEAN CENTRAL BANK, % Main refinancing operation^ 1.0^ 1.2^ 0.8^ 1.2^ 1.2^ 1.2^ 1.5^ 1.5^ 1.5^ 1.5^ 1.2^ 1.0^ 1.0^ 1.00 INTERBANK INTEREST RATES EURIBOR 3-month rates 0.81 1.39 0.57 1.32 1.42 1.49 1.60 1.55 1.54 1.58 1.48 1.43 1.22 1.05 6-month rates 1.08 1.64 0.83 1.62 1.71 1.75 1.82 1.75 1.74 1.78 1.71 1.67 1.50 1.35 LIBOR CHF 3-month rates 0.19 0.12 0.07 0.18 0.18 0.18 0.18 0.06 0.01 0.04 0.05 0.05 0.06 0.08 6-month rates 0.27 0.18 0.15 0.26 0.25 0.24 0.24 0.12 0.05 0.08 0.09 0.10 0.11 0.14 Source of data: BS, BBA - British Bankers' Association. 2012 2013 3 1 4 1 5 1 6 1 7 1 8 1 9 1 10 1 11 1 12 1 |2|3|4|5|6|7|8 182 169 188 204 227 227 207 226 224 221 232 233 229 233 233 233 233 232 4,801 4,752 4,796 4,811 4,870 4,814 4,874 5,138 5,144 5,057 5,036 5,111 5,048 5,451 5,361 4,999 5,108 5,024 588 591 580 584 589 590 585 583 580 610 609 613 609 610 600 600 601 601 9,412 9,380 9,380 9,362 9,341 9,346 9,338 9,341 9,318 9,267 9,191 9,160 9,159 9,141 9,107 9,099 9,050 9,059 20,933 20,922 20,843 20,693 20,561 20,506 20,398 20,294 20,044 19,470 19,425 19,265 19,152 19,022 18,889 18,832 18,639 18,633 2,323 2,320 2,300 2,291 2,247 2,244 2,210 2,204 2,186 2,135 2,116 2,102 2,028 2,000 1,990 1,999 1,992 1,983 5,644 5,527 5,613 5,918 5,248 5,229 5,210 4,930 5,012 5,194 5,085 5,300 5,389 4,957 5,423 5,255 5,190 5,320 36,103 35,955 35,979 36,202 35,461 35,440 35,316 35,131 34,943 34,558 34,349 34,342 34,336 33,765 34,040 33,902 33,612 33,754 1,492 1,472 1,458 1,439 1,423 1,402 1,372 1,354 1,348 1,309 1,263 1,277 1,264 1,236 1,235 1,223 1,203 1,192 6,105 6,066 6,076 6,018 5,972 5,886 5,928 6,004 5,990 5,862 5,846 5,927 5,780 6,177 6,091 5,657 5,762 5,669 30,197 30,165 30,208 30,322 29,703 29,591 29,354 29,457 30,062 29,582 29,575 29,961 30,070 29,665 30,497 29,943 30,228 30,184 8,177 8,404 8,375 9,151 8,573 8,632 8,523 8,648 8,763 8,678 8,726 9,185 8,997 8,919 8,806 8,923 9,124 9,055 7,553 7,362 7,441 7,111 7,134 7,052 6,964 6,980 7,417 7,056 6,905 6,827 7,140 7,148 7,712 7,626 7,652 7,696 14,395 14,319 14,309 13,982 13,930 13,852 13,751 13,755 13,763 13,780 13,863 13,829 13,775 13,424 13,787 13,189 13,203 13,159 72 80 83 78 66 55 116 74 119 68 81 120 158 174 192 205 249 274 577 568 559 583 597 591 579 571 576 552 538 554 549 520 548 536 520 541 384 385 381 397 410 412 397 388 399 372 372 383 363 361 354 340 342 362 132 124 116 125 125 119 124 126 119 123 109 114 128 103 103 113 97 95 60 58 61 60 61 59 57 56 57 56 56 56 57 55 91 82 81 84 1 1 1 1 1 1 1 1 1 1 1 1 1 1 0 1 0 0 0.23 0.22 0.22 0.22 0.19 0.19 0.18 0.17 0.17 0.17 0.14 0.13 0.13 0.13 0.12 0.11 0.10 2.38 2.38 2.37 2.29 2.27 2.23 2.23 2.28 2.28 2.24 2.28 2.18 2.10 2.01 2.01 1.97 1.89 5.46 5.36 5.45 5.42 5.37 5.41 5.62 5.53 6.00 5.31 5.46 6.40 5.03 5.49 5.39 5.30 5.34 6.04 5.81 6.27 5.83 3.94 5.06 6.52 6.51 5.48 5.57 3.75 3.76 3.70 3.48 5.68 3.03 1.0^ 1.0^ 1.0^ 1.0^ 0.7^ 0.7^ 0.7^ 0.7^ 0.7^ 0.7^ 0.7^ 0.7^ 0.7^ 0.7^ 0.^ 0.^ 0.^ 0.5 0.86 0.74 0.68 0.66 0.50 0.33 0.25 0.21 0.19 0.19 0.20 0.22 0.21 0.21 0.20 0.21 0.22 0.23 1.16 1.04 0.97 0.93 0.78 0.60 0.48 0.41 0.36 0.32 0.34 0.36 0.33 0.32 0.30 0.32 0.34 0.34 0.10 0.11 0.11 0.09 0.07 0.05 0.05 0.02 0.03 0.01 0.02 0.02 0.02 0.02 0.02 0.02 0.16 0.18 0.19 0.18 0.18 0.16 0.16 0.11 0.12 0.07 0.08 0.08 0.09 0.08 0.08 0.08 PUBLIC FINANCE 2010 2011 2012 2011 2012 2013 2011 2012 Q^ Q3 1 Q4 Q1 1 Q2 1 Q3 1 Q4 Q1 1 Q2 12 1 CONSOLIDATED BALANCE OF PUBLIC FINANCING (GFS-IMF methodology), current prices, EUR m GENERAL GOVERNMENT REVENUES TOTAL REVENUES 14,794.0 14,982.3 14,999.1 3,826.7 3,538.4 4,016.5 3,618.4 3,712.2 3,577.2 4,091.3 3,419.8 3,495.0 1,364.8 1,181.7 Current revenues 13,771.5 14,037.9 14,030.6 3,638.6 3,319.1 3,715.6 3,410.8 3,485.9 3,367.4 3,766.5 3,184.5 3,293.4 1,214.8 1,152.0 Tax revenues 12,848.4 13,209.2 13,118.3 3,451.0 3,129.7 3,472.7 3,172.7 3,314.0 3,170.4 3,461.2 2,946.8 3,107.4 1,116.8 1,106.6 Taxes on income and profit 2,490.7 2,723.5 2,656.6 827.7 562.9 697.5 629.5 723.0 511.1 793.0 577.1 510.9 246.2 214.7 Social security contributions 5,234.5 5,267.6 5,244.1 1,316.9 1,303.8 1,346.2 1,342.5 1,332.8 1,306.4 1,262.4 1,264.9 1,283.4 485.8 443.5 Taxes on payroll and workforce 28.1 29.2 25.6 7.6 6.7 8.2 7.2 6.4 5.8 6.1 5.5 6.1 3.3 2.0 Taxes on property 219.7 215.2 233.9 53.8 84.2 53.1 26.6 64.8 79.4 63.1 24.2 67.8 14.5 8.2 Domestic taxes on goods and services 4,780.7 4,856.2 4,876.1 1,217.4 1,148.4 1,324.9 1,164.0 1,164.5 1,244.1 1,303.4 1,039.2 1,224.7 373.0 443.6 Taxes on international trade & transactions 90.7 100.2 82.5 27.6 23.8 25.1 22.3 21.9 17.9 20.5 19.4 22.9 9.2 6.7 Other taxes 4.0 17.2 -0.6 -0.1 -0.2 17.6 -19.4 0.5 5.8 12.6 16.5 -8.4 -15.0 -12.1 Non-tax revenues 923.0 828.7 912.3 187.6 189.5 242.9 238.1 171.9 197.0 305.3 237.7 186.1 98.0 45.4 Capital revenues 175.7 65.3 62.5 21.6 14.4 21.7 10.5 10.8 11.7 29.5 10.7 13.1 12.0 2.2 Grants 12.6 10.4 9.2 3.0 1.0 4.0 1.3 1.8 1.6 4.5 12.9 2.6 1.2 0.2 Transferred revenues 109.5 53.8 51.7 0.4 50.5 0.6 0.1 0.5 50.0 1.1 0.5 0.4 0.3 0.1 Receipts from the EU budget 724.7 814.9 845.1 163.2 153.3 274.6 195.6 213.2 146.6 289.7 211.2 185.5 136.6 27.2 GENERAL GOVERNMENT EXPENDITURES TOTAL EXPENDITURES 16,692.7 16,546.3 16,125.7 4,159.0 3,955.7 4,240.0 4,326.5 3,857.4 3,836.0 4,105.7 4,129.3 4,002.9 1,542.9 1,491.0 Current expenditures 6,960.4 6,926.7 6,813.5 1,742.3 1,645.5 1,640.3 1,995.1 1,668.7 1,553.2 1,596.6 1,838.8 1,814.0 565.2 679.4 Wages, salaries and other personnel expenditures 3,912.4 3,882.7 3,727.7 1,010.3 955.0 950.4 958.3 973.9 910.8 884.7 903.6 931.8 308.2 331.1 Expenditures on goods and services 2,512.4 2,443.4 2,373.0 615.7 603.4 638.9 589.7 599.1 551.1 633.1 559.9 565.7 238.0 206.6 Interest payments 488.2 526.7 647.9 108.1 78.0 29.3 431.8 81.5 79.4 55.3 319.1 295.2 5.6 136.4 Reserves 47.4 73.9 64.9 8.2 9.1 21.6 15.3 14.3 11.8 23.4 56.2 21.3 13.4 5.4 Current transfers 7,628.5 7,818.9 7,687.0 2,076.4 1,855.7 1,944.4 1,957.3 1,878.7 1,903.2 1,947.8 1,945.0 1,890.4 694.0 707.5 Subsidies 581.9 496.3 502.7 127.6 69.1 128.2 177.1 107.8 57.3 160.5 190.5 111.9 71.9 117.0 Current transfers to individuals and households 6,277.7 6,533.5 6,384.2 1,745.6 1,583.0 1,598.3 1,609.2 1,588.7 1,636.6 1,549.7 1,576.8 1,586.0 531.9 535.4 Current transfers to non-profit institutions, other current domestic transfers 728.8 737.2 741.0 186.2 189.0 203.2 158.0 169.6 196.7 216.8 154.4 181.8 77.8 49.0 Current transfers abroad 40.1 52.0 59.0 17.0 14.5 14.6 13.0 12.5 12.6 20.8 23.3 10.7 12.4 6.1 Capital expenditures 1,310.6 1,023.5 915.0 196.5 266.5 391.6 165.3 179.2 223.4 347.2 141.1 145.9 185.6 56.7 Capital transfers 396.4 372.1 319.9 73.3 97.0 159.4 47.0 44.3 74.3 154.3 42.5 52.0 61.9 12.3 Payments to the EU budget 396.8 405.1 390.3 70.6 91.0 104.4 161.8 86.5 82.0 59.9 161.8 100.5 36.2 35.1 SURPLUS / DEFICIT -1,898.7 -1,564.1 -1,126.6 - - - - - - - - - - - Source of data: Bulletin of Government Finance. Note: In line with the changed methodology of the International Monetary Fund of 2001, social security contributions paid by the general government are not consolidated. * Data on revenues for November 2012 include corrections in DURS records for the period January-October 2012, which were due to the rectification of technical errors in the new DURS information system. 2012 2013 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 1 10 1 11M 12 1|2|3|4|5|6|7 1,094.3 1,342.3 1,283.2 1,159.7 1,269.3 1,188.8 1,234.9 1,153.5 1,300.4 1,304.0 1,486.9 1,183.0 1,143.6 1,093.2 1,186.8 1,134.2 1,174.1 1,289.6 1,056.4 1,202.5 1,230.7 1,101.4 1,153.8 1,120.0 1,189.9 1,057.5 1,256.4 1,228.5 1,281.6 1,130.4 1,072.6 981.5 1,107.7 1,061.3 1,124.4 1,225.1 952.1 1,114.0 1,174.5 1,049.3 1,090.3 1,059.0 1,107.5 1,003.9 1,188.8 1,161.5 1,111.0 1,076.5 955.1 915.2 1,046.5 997.0 1,063.9 1,061.0 219.2 195.6 248.3 194.8 279.9 91.6 210.5 209.0 215.7 311.1 266.3 199.9 194.1 183.1 70.9 163.5 276.6 62.6 438.0 461.0 441.3 449.0 442.5 432.2 446.0 428.2 430.0 360.0 472.3 424.7 418.9 421.4 432.4 426.3 424.7 423.0 2.0 3.2 2.2 2.2 2.0 2.2 1.7 1.9 2.0 1.6 2.5 1.9 1.8 1.8 2.1 2.0 2.0 2.2 9.7 8.7 10.5 27.4 26.9 26.3 26.4 26.6 20.0 30.5 12.7 6.1 9.0 9.0 17.3 30.4 20.1 32.1 282.4 438.0 460.7 371.2 332.7 496.8 414.2 333.2 512.5 444.9 346.1 438.3 319.3 281.6 521.1 375.5 328.1 527.3 7.3 8.3 8.8 6.6 6.5 5.9 5.6 6.3 7.6 7.5 5.4 5.3 6.3 7.9 8.3 7.6 7.0 6.6 -6.6 -0.7 2.7 -1.9 -0.3 4.2 3.0 -1.4 1.0 5.9 5.7 0.3 5.7 10.5 -5.7 -8.2 5.5 7.2 104.3 88.5 56.2 52.1 63.6 60.9 82.4 53.6 67.6 67.0 170.7 54.0 117.5 66.3 61.2 64.4 60.5 164.0 4.2 4.1 2.4 3.5 4.8 4.7 2.9 4.1 3.6 5.3 20.6 4.0 3.5 3.1 4.1 4.6 4.4 5.8 0.3 0.8 0.6 0.9 0.4 0.4 0.7 0.4 0.3 1.1 3.1 0.2 12.4 0.3 0.9 0.3 1.3 10.4 0.0 0.0 0.1 0.0 0.4 0.0 0.1 49.8 0.5 0.2 0.3 0.4 0.0 0.1 0.0 0.0 0.3 0.3 33.5 134.9 49.4 53.9 109.9 63.7 41.3 41.6 39.7 68.9 181.1 47.9 55.1 108.2 74.0 67.9 43.6 48.0 1,446.9 1,388.7 1,366.7 1,249.3 1,241.5 1,346.7 1,241.2 1,248.1 1,332.7 1,352.4 1,420.6 1,456.7 1,346.6 1,326.0 1,450.1 1,255.1 1,297.8 1,367.7 648.3 667.4 628.1 515.4 525.2 530.0 507.0 516.2 563.7 530.6 502.2 663.6 566.9 608.3 725.5 517.2 571.4 498.6 316.5 310.7 329.8 315.6 328.5 323.3 305.0 282.5 294.3 314.8 275.6 325.5 267.4 310.8 292.9 279.1 359.8 289.6 191.7 191.4 216.0 192.1 191.0 199.0 195.1 157.0 215.4 209.5 208.3 198.1 155.3 206.6 197.3 193.6 174.8 198.4 134.8 160.6 77.3 2.6 1.6 5.1 2.2 72.1 48.5 2.3 4.5 133.3 101.8 83.9 227.9 38.8 28.5 3.9 5.3 4.7 5.0 5.2 4.1 2.5 4.7 4.6 5.5 4.1 13.8 6.8 42.4 7.0 7.3 5.7 8.3 6.5 632.8 617.1 638.5 627.2 613.0 697.0 607.4 598.8 611.3 662.3 674.2 679.6 639.7 625.7 637.5 630.3 622.6 731.7 40.5 19.6 47.2 31.8 28.8 14.7 20.6 22.0 27.4 68.1 65.0 94.2 60.0 36.3 33.2 44.7 34.1 28.4 534.5 539.3 530.2 531.1 527.4 611.7 519.8 505.1 524.2 511.8 513.6 526.3 521.5 529.0 534.5 525.5 526.0 610.4 53.4 55.6 56.3 59.0 54.2 67.3 62.3 67.0 56.7 70.0 90.1 54.5 41.5 58.5 67.2 54.6 60.0 67.1 4.3 2.6 4.6 5.2 2.7 3.3 4.6 4.7 3.0 12.3 5.5 4.6 16.8 1.9 2.6 5.6 2.5 25.8 55.0 53.6 50.9 63.9 64.3 76.7 72.4 74.2 86.5 95.7 165.0 49.5 50.4 41.2 37.8 50.6 57.5 80.9 18.6 16.1 14.3 10.2 19.8 23.5 24.5 26.3 43.3 41.6 69.4 12.6 11.9 17.9 16.1 23.3 12.7 23.0 92.2 34.6 34.9 32.5 19.1 19.5 29.9 32.6 27.9 22.2 9.8 51.3 77.5 33.0 33.2 33.7 33.6 33.5 - - - - - - - - - Acronyms Acronyms in the text AJPES - Agency of the Republic of Slovenia for Public Legal Records and Related Services, BoE - Bank of England, BoJ -Bank of Japan, BS - Bank of Slovenia, CHF - Swiss Franc, EAGF - European Agricultural Guarantee Fund, EC - European Commission, ECB - European Central Bank, EIA - Energy Information Administration, EMU - European Monetary Union, ES - European Council, ESA - European System of Accounts, ESI - Economic Sentiment Indicator, ESS - Employment Service of Slovenia, ESSPROS - European System of Integrated Social Protection Statistics, Euribor - Euro Interbank Offered Rate, EUROSTAT - Statistical Office of the European Union, FED - Federal Reserve System, GBP - British pound, GDP - Gross domestic product, HICP-Harmonised Index of Consumer Prices, HUF - Hungarian Forint, ICT - Information and Communication Technology, ifo - Institut für Wirtschaftsforschung, IMAD - Institute of Macroeconomic Analysis and Development, IMD - International Institute for Management Development, IMF - International Monetary Fund, JPY -Japanese yen, LFS - Labour Force Survey, Libor - London Interbank Offered Rate, MF - Ministry of Finance, NEER - Nominal Effective Exchange Rate, NFI - Non-monetary Financial Institutions, OECD - Organization for Economic Co-operation and Development, OI - core inflation, OP RR - Operational Programme for Strengthening Regional Development Potentials, OP RČV, - Operational Programme for Human Resource Development, OP ROPI - Operational Programme of Environmental and Transport Infrastructure Development, PDII - Pension and Disability Insurance Institute, PMI - Purchasing Managers Index, PRS - Slovenian Business Register, REER - Real Effective Exchange Rate, RS - Republic of Slovenia, RULC - Relative Unit Labor Cost, SCA - Standard Classification of Activities, SRE - Statistical Register of Employment, SURS - Statistical Office of the Republic of Slovenia, ULC - Unit Labour Costs, USA - United States of America, USD - US Dollar, VAT - value added tax, WEF - World Economic Forum, WIIW - The Wienna Institute for International Economic Studies, WTO - World Trade Organization, ZEW - Centre for European Economic Research, ZUJF - Fiscal Balance Act , ZZZS - The Health Insurance Institute of Slovenia. Acronyms of Standard Classification of Activities (SCA) A - Agriculture, forestry and fishing, B - Mining and quarrying, C - Manufacturing, 10 - Manufacture of food products, 11 - Manufacture of beverages, 12 - Manufacture of tobacco products, 13 - Manufacture of textiles, 14 - Manufacture of wearing apparel, 15 - Manufacture of leather and related products, 16 - Manufacture of wood and of products of wood and cork, except furniture, manufacture of articles of straw and plaiting materials, 17 - Manufacture of paper and paper products, 18 - Printing and reproduction of recorded media, 19- Manufacture of coke and refinedpetroleum 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 - Manufactureof motorvehicles,trailersand semi-trailers, 30 - Manufactureof othertransportequipment, 31 - Manufacture of furniture, 32 - Other manufacturing, 33 - Repair and installation of machinery and equipment, D-Electricity,gas,steamandairconditioningsupply,E-Watersupplysewerage,wastemanagementandremediationactivities, F - Construction, G - Wholesale and retail trade, repair of motor vehicles and motorcycles, H - Transportation and storage, I - Accommodation and food service activities, J - Information and communication, K - Financial and insurance activities, L -Real estate activities, M - Professional, scientific and technical activities, N - Administrative and support service activities, O -Public administration and defence, compulsory social security, P - Education, Q - Human health and social work activities, R - Arts, entertainment and recreation, S - Other service activities, T - Activities of households as employers, undifferentiated goods- and services- producing activities of households for own use, U - Activities of extraterritorial organizations and bodies. Acronyms of Countries AT-Austria, BA-Bosnia and Herzegovina, BE-Belgium, BG-Bulgaria, BY-Belarus, CH-Switzerland, HR-Croatia, CZ-Czech Republic, CY-Cyprus, DE-Germany, DK-Denmark, ES-Spain, EE-Estonia, GR-Greece, FR-France, FI-Finland, HU-Hungary, IE-Ireland, IL-Israel, IT-Italy, JP-Japan, LU-Luxembourg, LT-Lithuania, LV-Latvia, MT-Malta, NL-Netherlands, NO-Norway, PL-Poland, PT-Portugal, RO-Romania, RS-Republic of Serbia, RU-Russia, SE-Sweden, SI-Slovenia, SK-Slovakia, TR-Turkey, UA-Ukraine, UK-United Kingdom, US-United States of America. Slovenian economic mirror September 2013, No. 9, Vol. XIX