.^'IMAD O fü Q) £ u E o X X O Ü) O u 0) o fN cu .Q E cu > o Slovenian Economic Mirror ISSN 1318-3826 No. 11 / Vol. XX / 2014 Publisher: IMAD, Ljubljana, Gregorčičeva 27 Responsible Person: Boštjan Vasle, MSc, Director Editor in Chief: Barbara Ferk, MSc Authors of Current Economic Trends (listed alphabetically): Jure Brložnik, Gonzalo Caprirolo, MSc, Janez Dodič, Marjan Hafner, MSc, Matevž Hribernik, Mojca Koprivnikar Šušteršič, Tanja Kosi Antolič, PhD, Janez Kušar, Jože Markič, PhD, Tina Nenadič, MSc, Mitja Perko, MSc, Jure Povšnar, Ana T. Selan, MSc, Dragica Šuc, MSc, Miha Trošt Authors of Selected Topics: Ana T. Selan, MSc (Wage adjustment and changes in wage inequality during the crisis), Mitja Perko, MSc (Unemployment outflow rate), Matevž Hribernik (The Doing Business 2015 report by the World Bank), Excessive macroeconomic imbalances in the EU) Editorial Board: Marijana Bednaš, MSc, Lejla Fajič , Alenka Kajzer, PhD, Rotija Kmet Zupančič, MSc, Janez Kušar, Boštjan Vasle, MSc Translator: Marija Kavčič Data Preparation and Graphs: Bibijana Cirman Naglič, Marjeta Žigman Concept and Design: Katja Korinšek, Pristop DTP: Bibijana Cirman Naglič Print: SURS Circulation: 80 copies © The contents of this publication may be reproduced in whole or in part provided that the source is acknowledged. Contents In the spotlight................................................................................................................................................................3 Current economic trends..............................................................................................................................................5 International environment...............................................................................................................................................7 Economic developments in Slovenia.............................................................................................................................8 Labour market..................................................................................................................................................................13 Prices..................................................................................................................................................................................15 Balance of payments.......................................................................................................................................................17 Financial markets.............................................................................................................................................................19 Public finance....................................................................................................................................................................21 Boxes Box 1: Gross domestic product, Q3 2014.......................................................................................................................9 Box 2: Drawing of cohesion funds in the 2007-2013 programming period, with emphasis on 2014...........................23 Selected topics Wage adjustment and changes in wage inequality during the crisis....................................................................29 Unemployment outflow rate.........................................................................................................................................32 The Doing Business 2015 report by the World Bank.................................................................................................33 Excessive macroeconomic imbalances in the EU.......................................................................................................34 Statistical appendix.....................................................................................................................................................37 The Economic Mirror is prepared based on statistical data available by 5 December 2014. On January 2008, the new classification of activities of business entities NACE Rev.2, which replaced NACE Rev. 1.1, came into force in all EU Member States. In the Republic of Slovenia, the national version of the standard classification, SKD 2008, which includes the entire European classification of activities but also adds some national subclasses, came into force on the mentioned date. In the Slovenian Economic Mirror, all analyses are based on the SKD 2008, except when the previous SKD 2002 classification is explicitly referred to. More general information about the introduction of the new classification is available on the SURS website http://www.stat.si/enq/ skd nace 2008.asp. All seasonally adjusted data in the Economic Mirror are calculations by IMAD. In the spotlight The weak economic recovery in the euro area continued in the third quarter of this year but the forecasts for 2014 and 2015 are lower than previous projections. The 0.8% year-on-year growth was mainly driven by private consumption, while investment continued to decline. Similar to other institutions, the OECD cut its forecasts for economic growth in November. Euro area GDP is now projected to rise 0.8% this year and 1.1% in 2015, the main factors for the revision being deteriorating business confidence and weaker investment growth. The downside risks to economic growth remain elevated, arising mainly from geopolitical risks, less favourable world economic prospects and the still vulnerable financial markets. The slump in commodity prices continued in October and November, the price of Brent crude oil averaging USD 79.5 per barrel in November, which is the lowest figure in the past four years. In the third quarter Slovenia's GDP was up 0.7% relative to the previous quarter (seasonally adjusted) and up 3.2% compared with the previous year, largely owing to accelerated growth in exports. Total exports were up 6.8% over the same period of 2013 (in quarterly terms up 3.1%, seasonally adjusted), which is related to improvement in export competitiveness and some major export transactions amid the otherwise weak recovery in Slovenia's main trading partners. The year-on-year growth of value added strengthened in manufacturing and some other export-related sectors. Domestic consumption also increased further in year-on-year terms. The quarterly rise in gross fixed capital formation (1.0%, seasonally adjusted) was similar to that in the second quarter but its structure was slightly different. Growth in construction investment related to the strong absorption of EU funds moderated, while investment in machinery and equipment rose. Household consumption went up modestly (0.8% year-on-year), reflecting the recovery on the labour market and higher consumer confidence. After declining year-on-year for a long period, government consumption remained at the same level as the year before mostly on the back of lager expenditure on intermediate consumption. The labour market situation continues to improve gradually. After recording strong growth in the first half of the year, employment rose noticeably again in the third quarter (by 0.5%, seasonally adjusted). The movements of the number of the registered unemployed have also been favourable since March (seasonally adjusted), primarily on account of increased hiring. At the end of November, 115,411 persons were registered as unemployed, down 3.3% from the previous November. Slightly rising since mid-2013, average gross earnings per employee increased by a further 0.5% in the third quarter (seasonally adjusted). In the private sector they have been rising steadily for one and a half years, but this year they are also growing in the public sector for the first time in two years (owing to the beginning of the disbursement of suspended promotions, the base effect due to the expiry of the latest austerity measures in the general government sector and further growth in public corporations). In November, Slovenia recorded deflation at the annual level for the fourth month in a row (-0.2%). The decline in consumer prices in recent months was, alongside modest household consumption, also due to a huge year-on-year slump in global oil prices in euros. Durable and semi-durable goods prices also fell. Services prices otherwise stand out among all groups of prices that have increased this year, but their contribution dropped in November on account of lower supplementary health insurance premiums (one-off factor). The euro area recorded the lowest inflation in the past five years (0.3% year-on-year in November), which is explained by the same factors as in the domestic environment. The repairing of bank balance sheets continues but the situation remains fairly tight. In October, EUR 1.1 bn of claims were transferred from banks included in the restructuring process to the BAMC. In the ten months to October, the volume of loans to domestic non-banking sectors thus shrank by EUR 2.3 bn. Household loans fell marginally, while government loans enjoyed modest growth. Household and government deposits have otherwise been increasing in 2014 but in the last two months the increase in household deposits came to a halt. At the end of the third quarter, the quality of bank assets started to deteriorate more rapidly again. The share of arrears of more than 90 days (EUR 6.2 bn) stood at 15.7% at the end of September, which is almost 1 percentage point higher than a month earlier. The general government deficit in the first three quarters amounted to EUR 1.032 bn, down EUR 314.9 m from the same period of 2013. The year-on-year growth in general government revenue (5.0%), mainly the result of public finance measures, was to some extent also due to stronger economic activity. Among tax revenues excluding social contributions (which were up 6.7%), corporate income tax and value added tax recorded the highest growth. Revenue from personal income tax and social contributions also increased as a result of improving labour market conditions and a reduction in some tax allowances. Growth in general government expenditure (2.2%) was lower than growth in general government revenue. It was driven by strong investment growth and rising interest payments, while other major expenditure categories were down year-on-year. The revised state budget adopted in November 2014 anticipates a EUR 197 m higher deficit in 2014 than planned in November 2013, the main reasons for the shortfall being expenditure on interest payments, transfers to the pension fund and expenditure on goods and services, which were set to low in the original budget, and more modest absorption of EU cohesion funds. ■o £ Ol E o £ 0 u 01 £ 01 3 U International environment The weak recovery of the euro area economy continued in the third quarter of this year. According to Eurostat's estimate, euro area GDP rose by 0.2% in the third quarter, seasonally adjusted, and was up 0.8% year-on-year. Activity otherwise increased slightly more than expected by the European Commission, but among Slovenia's trading partners, only Germany and France recorded growth. Data on GDP growth structure in these two countries indicate that the main driver of growth was domestic demand, as private and government consumption increased, while investment, particularly in machinery and equipment, dropped considerably. In Germany a positive contribution to growth also came from foreign demand (net exports), while in France growth was up on account of changes in inventories. In October and November, the confidence and business climate indicators for the euro area (PMI, ESI) - which had deteriorated in the third quarter - indicated that economic recovery would also be slow in the last quarter of the year. Figure 1: Quarterly growth rates in selected EU countries, 2014 Table 1: Comparison of GDP growth forecasts by international institutions -0.4 EMU Germany France Italy Austria Source: Eurostat, EC forecast (November 2014). Similar to other institutions, the OECD also cut its forecasts for economic growth in November, as expected. Euro area GDP is now projected to rise 0.8% this year and 1.1% next year (in both years by 0.4 percentage points less than expected in the spring). The main factors for the revision are business confidence, which has been deteriorating since spring 2014, and significantly weaker investment growth than expected. On the other hand, positive contributions to growth should come from the depreciation of the euro against the US dollar and lower commodity prices. The recovery will accelerate somewhat next year, but the downside risks to growth remain elevated, arising mainly from geopolitical risks, less favourable world economic prospects and the still vulnerable financial markets. The OECD also mentions the 2014 2015 IMF Oct 14 CONS Nov 14 EC Nov 14 OECD Nov 14 IMF Oct 14 CONS Nov 14 EC Nov 14 OECD Nov 14 EMU 0.8 0.8 0.8 0.8 0.8 1.1 1.1 1.1 EU N/A 1.3 1.3 N/A N/A 1.6 1.5 N/A DE 1.4 1.4 1.3 1.5 1.5 1.4 1.1 1.1 IT -0.2 -0.3 -0.4 -0.4 0.9 0.5 0.6 0.2 AT 1.0 1.1 0.7 0.5 1.9 1.5 1.2 0.9 FR 0.4 0.3 0.3 0.4 1.0 0.8 0.7 0.8 UK 3.2 3.0 3.1 3.0 2.7 2.6 2.7 2.7 US 2.2 2.2 2.2 2.2 3.1 3.0 3.1 3.1 Source: IMF World Economic Outlook (October 2014), Consensus Forecasts (November 2014), European Economic Forecast Autumn 2014 (November 2014), OECD Economic Outlook (November 2014). Note: N/A - not available. risk of secular stagnation,1 which is related to the very low interest rates and persistently low inflation (i.e. deflation). The ECB kept its interest rates unchanged in November. In order to strengthen the transmission mechanism, it is willing to take further steps to adjust the monetary policy, in addition to the already adopted non-standard measures. At October's meeting, the ECB confirmed and announced details on the implementation of the programmes of asset-backed securities and covered bond purchases (ABSPP and CBPP). Besides the measures that are already underway,2 the ECB will examine possibilities for additional steps to further enhance the functioning of the transmission mechanism and facilitate lending to businesses. These should include purchases of various types of assets, primarily government and corporate bonds. Oil prices slumped further in November. The price of Brent crude oil, having exceeded USD 115 per barrel in the middle of June, declined by more than 35% in the last five months, to around USD 72 per barrel by the end of November. The average price of Brent crude oil in November was USD 79.5, which is its four-year low. Despite the significant depreciation of the euro against the US dollar, oil prices in euros also fell significantly, averaging EUR 69.5 per barrel in November. According to the IEA, since June oil prices have mainly been falling owing to higher oil supply from non-OPEC countries (US, UK), as oil demand increases more slowly than oil supply.3 Moreover, October recorded a further decline in non-energy commodity prices (down 1.4% year-on-year), particularly metal prices, which fell to a five-year low. 1 Secular stagnation is a prolonged period of very low or zero growth in the market economy, which is, despite low interest rates, mainly a consequence of low aggregate demand. 2 In addition to the asset-backed securities purchase programme (ABSPP) and the covered bond purchase programme (CBPP), the 2nd auction of targeted longer-term refinancing operations (TLTROs) will take place in December, where 47% of the surveyed banks plan to participate, according to the ECB lending survey. 3 Oil supply amounted to 93.6 m barrels per day in the third quarter, 0.9% more than in the second quarter. This was the highest oil supply growth on record in the last few years. Table 2: Money market interest rates and the exchange rates of national currencies against the EUR Interest rates average, in % change, in b. p. 2013 XI 13 X 14 XI 14 XI 14/X 14 XI 14/XI 13 3-month EURIBOR rate 0.220 0.223 0.083 0.081 -0.2 -14.2 3-month USD LIBOR rate 0.268 0.239 0.232 0.233 0.1 -0.6 3-month CHF LIBOR rate 0.021 0.020 0.009 0.007 -0.2 -1.3 Exchange rates average change, in % 2013 XI 13 X 14 XI 14 XI 14/X 14 XI 14/XI 13 EUR/USD 1.328 1.349 1.267 1.247 -1.6 -7.6 EUR/CHF 1.231 1.232 1.208 1.208 0.0 -1.9 EUR/GBP 0.849 0.838 0.789 0.790 0.2 -5.7 EUR/JPY 129.66 134.97 136.85 144.79 5.8 7.3 Source: Euribor, ECB, calculations by IMAD. Figure 2: Prices of Brent crude oil and USD/EUR exchange rate -Price in EUR (left axis) -Price in USD (left axis) -USD to EUR exchange rate (right axis) Figure 3: Non-energy commodity prices in dollars 140 1^100 P. 80 D m ^ 60 1.8 1.4 - 1.2 9 1.0 260 240 220 200 180 160 140 120 100 80 60 - Non-energy commodities Agricultural raw materials - Food - Industrial inputs Metals Source: ECB, EIA; calculations by IMAD. Table 3: Oil and non-energy commodity prices Source: IMF. Oil average change, in % 2013 XI 13 X 14 XI 14 XI 14/X 14 XI 14/XI 13 Brent USD 108.56 107.79 87.43 79.45 -9.1 -26.3 Brent EUR 81.66 79.91 69.46 64.38 -7.3 -19.4 Commodities change, in % 2013/2012 XI 14/X 14 XI 14/XI 13 Non-energy commoditites -1.2 -1.4 -6.5 Food 1.1 -1.2 -8.0 Agricultural raw materials 1.4 -0.8 -1.2 Metals -4.2 -2.9 -12.3 Source: EIA, ECB, IMF, calculations by IMAD. Economic developments in Slovenia In the third quarter, real growth in merchandise exports increased further (4.2%), while growth in imports continued (2.5%, seasonally adjusted).4 Growth in merchandise 4 According to the National Accounts Statistics. exports, which started in the second quarter of last year, coincides with an increase in demand from the EU. According to our estimate, it is also a result of improved export competitiveness, which is reflected in market share growth.5 In the third quarter, too, growth was based on exports to the EU. Among exports to Slovenia's main 5 For more on this see SEM, September 2014, Box 1, p. 10. 120 1.6 40 20 Box 1: Gross domestic product, Q3 2014 In the third quarter, GDP growth (3.2%, year-on-year) continued primarily owing to faster growth in exports. Relative to the previous quarter, GDP rose by 0.7% (seasonally adjusted), the main factor being a further strengthening of growth in merchandise exports. Total exports were thus up 6.8% over the same period of 2013, which is, amid the otherwise weak economic recovery in Slovenia's main trading partners, attributable to an improvement in export competitiveness and to some major export transactions in the last period (an increase in road vehicle exports). In the context of export movements, the year-on-year growth of value added strengthened further in manufacturing and some other activities that are at least partly related to exports (particularly in the transportation sector). Year-on-year growth in imports (5.5%) was also higher than in the first half of the year, the contribution of net exports being significant again, at 1.4 percentage points. The third quarter also recorded further growth in domestic consumption and value added in predominantly domestic-market-oriented activities. The quarterly rise in gross fixed capital formation (1.0%, seasonally adjusted) was similar to that in the second quarter but its structure was slightly different. Growth in construction investment related to the strong absorption of EU funds eased, as already indicated by indicators of construction activity. Value added in the construction sector even fell relative to the previous quarter, so that its year-on-year growth (10.1%) also slowed, after the pronounced growth in the first half of the year. Investment in machinery and equipment rose quarter-on-quarter, being also up slightly in year-on-year terms (1.0%). Investment in transport equipment and investment in other equipment and machinery increased. The latter nevertheless remains lower than in the same period last year, which we estimate is largely the result of the base effect, as last year the level of this investment was fairly high due to the imports of equipment for a large energy facility. The year-on-year growth in household consumption (0.8%) continued, reflecting the recovery on the labour market and higher consumer confidence. Growth in employment and nominal gross earnings increased further year-on-year in the third quarter, by 0.9% and 1.3%, respectively. Durable goods consumption was up again, as already suggested by current indicators (first passenger car registrations and turnover in the sale of durable goods), while consumption of other goods stagnated. After declining year-on-year for a long period, government consumption remained unchanged relative to the same period of 2013, the main reason being higher expenditure on intermediate consumption, which had still recorded a considerable year-on-year decline in the first half of the year. Compensation of employees was also up amid growth in employment (especially in the sectors of health and social work and education) and average gross earnings (the payments of suspended promotions) in the general government. Figure 4: GDP level in Slovenia and its main trading partners —«—Slovenia -Germany ---------France ----Italy -Austria ---------Croatia 104 c5 98 iS 96 IS 94 J^ 92 90 tin 88 86 -........ 1 1 : \ V ............ \ V. —. 1 cS cS cS cS <3 Source: Eurostat; calculations by IMAD. cS Figure 5: Expenditure structure of the year-on-year change in GDP, Slovenia ^■Private consumption Government consumption Gross fixed capital formation wmrn Changes in inventories and valuables Exports of goods and services ^«Imports of goods and services 8 ■ 6 . 4 1! 5 (D 0 O -5 -10 (D i^-20 u -25 0 ;s -6Si -8 -10 - -12 a a a Source: SURS. trade partners, in particular exports to France expanded during the summer months. The latter is mainly a consequence of higher road vehicle exports, which were, according to our estimate, also the main driver of total export growth relative to the previous quarter, together with exports of metal products, primary products and 6 Nominal data on the structure of merchandise exports and imports are available for the first eight months of this year. machinery.6 Against the background of export growth, a modest recovery of domestic consumption and some one-off factors, merchandise imports have also been picking up since the beginning of last year. According to the available data, imports of all main end-product groups (for private, intermediate and investment 106 2 -2 -4 -30 Table 4: Selected monthly indicators of economic activity in Slovenia in % 2013 IX 14/ VIII 14 IX 14/ IX 13 I-IX 14/ I-IX 13 Exports1 2.5 26.8 12.0 5.2 -goods 1.8 39.2 14.0 5.9 -services 5.6 -9.0 3.9 2.2 Imports1 -1.5 19.1 6.1 5.0 -goods -1.9 22.3 6.8 4.2 -services 1.4 3.1 2.5 10.4 Industrial production -0.9 0.42 3.33 3.63 -manufacturing -1.5 -0.22 2.23 3.03 Construction -value of construction put in place -2.6 -8.62 6.23 30.43 Real turnover in retail trade -3.7 0.22 4.13 0.33 Nominal turnover in market services (without trade) -0.3 -0.92 2.43 3.33 Sources: BoS, Eurostat, SURS; calculations by IMAD. Notes: 'balance of payments statistics, 2seasonally adjusted, 3working-day adjusted data. Figure 7:Trade in services - nominal -Exports of services -Imports of services 1,200 |5 1,100 is ^ 1,000 Ču 900 a a a a a Source: BoS; calculations by IMAD. Figure 6: Merchandise trade - Merchandise exports - Slovenia -Merchandise imports -EU - Merchandise imports - Slovenia ----Domestic consumprtion - Slovenia a a a a a Source: SURS, Eurostat; calculations by IMAD. consumption) increased further in the third quarter. In the first three quarters, real merchandise exports were up 6.3% year-on-year, according to original data, while imports increased by 3.7%. After the increase in services trade in the second quarter, nominal exports maintained their level in the third quarter, while imports decreased, seasonally adjusted.7 Exports of transport and other business services continued to grow; exports of travel have stagnated in the past year while exports of the group of other services have decreased.8 7 According to the balance of payments statistics. 8 When adjusting data for seasonal effects, we placed communication, construction, financial, computer and information activities, personal service activities, arts, entertainment and recreation activities, government services, insurances and licences, patents and copyrights into the group of other services. Together, they account for almost a fifth of services exports and nearly a third of services imports. The decline in the latter is due to lower exports of licences, patents and copyrights, personal, cultural, recreation and communication services. Nominal imports of services fell owing to a renewed decline in imports of travel and the group of other services (notably licences, patents and copyrights). Imports of transport services also declined in the third quarter, while imports of other business services remained roughly unchanged for the second quarter in a row. In the first three quarters of the year, nominal exports of services were up 2.2% year-on-year, according to original data, while imports increased by 10.4%. Production volume in manufacturing increased further in the third quarter owing to strong growth in July. In quarterly terms, it was up 1.2% (seasonally adjusted) primarily on account of growth in more technology- Figure 8: Production volume in manufacturing industries according to technology intensity —•— Low-technology -Medium-low-technology 110 105 Ei100 Ji 95 90 ■Ö 85 J^ 80 c 75 iS 70 65 60 • Medium-high-and high-technology - Manufacturing, total ........f- J, /; i..... ^---i V ............I............ W y 1 .................. rN m O O O O O O O Source: SURS; calculations by IMAD. 1,400 1,300 800 700 intensive industries where production volume has risen the most since the beginning of the year. Medium-low-technology production remained practically unchanged for the second consecutive quarter, while low-technology production decreased slightly and returned to the level seen at the beginning of the year. In the first nine months, production volume in manufacturing was 3.0% higher (working-day adjusted) than in the same period of 2013.9 Modest activity in some low-technology industries is the main reason for a wider gap with the production levels in 2008 of the manufacturing sector in Slovenia compared with the EU. Production levels in the textile, wood-processing and furniture industries are half lower than in 2008. Some medium-low-technology industries (the rubber industry, repair and installation of machinery and equipment) and the more technology-intensive manufacture of transport equipment are much further away from the pre-crisis level than their counterparts in the EU. Activity in the manufacture of transport equipment, having declined in the past three years after the phase-out of the incentives for new car purchases in the main trading partners, was up 25.4% year-on-year in the third quarter. In our estimation, its growth was mainly due to the beginning of the sale of a new passenger car in the second half of this year. In the third quarter, more than 20% higher activity than in the same period last year was recorded in the manufacture of ICT equipment and electrical appliances, and in the leather industry, where it also increased most notably in the first nine months (by a solid 10%). Figure 9: Production volume by manufacturing activity in Slovenia and the EU-28, 3rd quarter 2014 120 110 100 Ei 90 Ji 80 70 60 ^^ 50 40 I EU-28, seasonally adj. Index ■ Slovenija, original Index ■■"T..........T..........T C .1= ti 3= E Low-technology Source: Eurosta •l^i c Medium-low-technology SURS; calculation E Medium-high and high-technology by IMAD. Construction activity declined by 6.6% in the third quarter, seasonally adjusted. On the back of growth in the preceding period, the value of construction put in place was otherwise still 19.3% higher year-on-year in the third 9 It was lower in some industries of lower technology-intensity, such as the textile and furniture industries, the sector of repair and installation of machinery and equipment, etc. quarter. After having strengthened noticeably at the end of last and in the first half of 2014, activity fell in civil engineering while remaining almost unchanged in the construction of buildings. At the end of September, the stock of contracts in the construction sector was 17.3% lower than at the end of 2013. Last year, it otherwise increased considerably, by 35.5%. In civil engineering, the stock of contracts fell by 7.2% this year, in the construction of residential and nonresidential building even more. Data on issued building permits show a similarly unfavourable picture: the total floor area of buildings planned by issued building permits was significantly lower year-on-year in both the last quarter of 2013 and the first three quarters of 2014. Figure 10: Value of construction output, seasonally adjusted 40 20 Construction Residential buildings Civil-engineering structures Non-residential buildings Source: SURS; calculations by iMAd. ° Figure 11: Total floor area of buildings planned by issued building permits in the last four quarters 2,800,000 2,400,000 2,000,000 1,600,000 1,200,000 800,000 400,000 140 120 100 80 SS 60 0 0 Activity in all three trade sectors strengthened in the third quarter (seasonally adjusted); turnover was also up year-on-year. In retail trade, turnover rose in the third quarter after stagnating for a year, and was up year-on-year for the first time in more than two years. Turnover in wholesale trade also rose after the stagnation in the first half of the year. With increased sales of new passenger cars,10 turnover continued to grow in the sale and repair of motor vehicles, being up more than a tenth relative to last year. Figure 12: Turnover in trade sectors 105 95 85 - Retail trade, real ■ Sale, repair of motor vehicles, real - Wholesale trade, nom. 70 a a a a Source: SURS; calculations by IMAD. Turnover in retail trade rose in the third quarter in the sale of automotive fuels and non-food products (seasonally adjusted). Turnover in the sale of food, beverages and Figure 13: Turnover in retail trade 105 100 95 90 85 80 70 - Sale of automotive fuel - Sale of food,beverages and tobacco products ■ Sale of non-food products 65 O O O O Source: SURS; calculations by IMAD. tobacco products continued to decline. Modest growth, first seen at the end of last year, continued in the sale of non-food products, where the sale of household appliances and audio and video recordings rose for the fourth quarter in a row, exceeding last year's level by more than a fifth. After the fluctuations in previous quarters, turnover in the sale of automotive fuels also rose substantially. It was also much higher year-on-year, in our assessment as a result of increased trade in other goods and services that are also sold by companies registered in this activity,11 as the quantity of sold automotive fuels was similar to the third quarter of 2013. Nominal turnover in market services (excluding trade)12 was also up in the third quarter (seasonally adjusted). Turnover increased in most main market services (year-on-year, in all of them). Turnover in transportation services, having started to rise at the beginning of 2013, has since increased by almost a tenth. Within these services, particularly strong growth was recorded by storage activities, while growth in land transportation came to a standstill. After growing for one and a half years, turnover in accommodation and food service activities stagnated in the third quarter due to a decline in September. Turnover in professional and technical services is increasing rapidly this year, mainly on the back of growth in architectural and engineering services where it was declining for several years and is therefore still much lower than before the crisis. The vigorous growth in turnover in administrative and support service activities is driven by employment activities. Turnover has otherwise been slightly falling for the better part of the year only in information and communication services, primarily owing to a decline in the telecommunication sector. Figure 14: 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) 115 100 95 90 80 a a a a a Source: SURS; calculations by IMAD. First passenger car registrations increased by 6.9% year-on-year in the third quarter, of which registrations by legal entities by 8.5% and registrations by natural persons by 1.7%. 11 Such as electricity, natural gas, merchandise and some services. 12 Activities from H to N (SCA 2008) subject to the Council Regulation (EC) No. 1165/98 concerning short-term statistics. 100 90 80 75 105 75 85 75 Confidence in the economy remains practically unchanged in the second half of the year, after it was still improving in the first. It increased relative to the first half of the year particularly in retail trade and service activities. It maintains similar levels as on average in the first half of the year in construction and manufacturing, but has been deteriorating in these sectors in the past few months. Consumer confidence fell notably in November, but this had improved substantially in the last year and a half. Figure 15: Business trends 30 ra 20 = 10 5 0 j -10 1 -20 j 3 -30 2 ■40 ■50 ■60 ■70 IS Source: SURS; calculations by IMAD. Labour market The number of employed persons^^ rose again notably in the third quarter (by 0.5%, seasonally adjusted). Having started to increase slowly in the second quarter last year, Figure 16: Employed persons by activity 1Q3 2013 1Q4 2013 1Q1 2014 1Q2 2014 1Q3 2014 1.0 ä 0.5 -1.5 Manufacturing Construction Market services Public services Source: SURS, calculations by IMAD. Figure 17: Employed according to SRE and registered unemployed -Employed according to SRE (left axis) -Registered unemployed (right axis) 820 800 780 760 740 720 12 700 180 160 140 120 -i^ E (u 100 |5 80 iB Source: SURS:rESS; ca^lation"srby IMAD. it strengthened in February 2014 and was also rising in the third quarter (1.2% year-on-year). In the first nine months of this year, the number of employed persons was up particularly in some market service activities14 (notably employment activities leasing labour), education and health and, to some extent, manufacturing. It was also higher in arts, entertainment and recreation and Table 5: Indicators of labour market trends in % 2013 IX 14/ VIII 14 IX 14/ IX 13 I-IX 14/ I-IX 13 Labour force -0.7 0.2 0.9 0.5 Persons in formal employment -2.0 0.21 1.3 0.3 Employed in enterprises and organisations and by those self-employed -2.6 0.5 1.1 0.4 Registered unemployed 8.8 -0.41 -1.8 1.4 Average nominal gross wage -0.2 0.21 1.6 1.1 - private sector 0.6 0.21 1.6 1.5 - public sector -1.3 0.21 2.0 0.7 -of which general government -2.5 0.11 1.5 0.3 2013 IX 13 VIII 14 IX 14 Rate of registered unemployment (in %), seasonally adjusted 13.1 13.2 12.9 12.9 Average nominal gross wage (in EUR) 1.523.18 1.495.28 1.516.93 1.519.32 Private sector (in EUR) 1.404.40 1.375.60 1.393.05 1.397.15 Public sector (in EUR) 1.740.78 1.715.40 1.751.21 1.750.56 -of which general government (in EUR) 1.716.48 1.705.40 1.723.88 1.731.75 Sources: ESS. SURS; calculations by IMAD. Note: 1seasonally adjusted. 13 According to the Statistical Register of Employment; these are employed and self-employed persons excluding self-employed farmers. 14 It was higher in administrative and support service activities, professional, scientific and technical, information, and transportation and storage activities, and, modestly higher, in real estate activities, while it was lower in financial and insurance activities, wholesale and retail trade, maintenance and repair of motor vehicles, and, somewhat lower, in accommodation and food service activities. 860 240 840 220 200 40 680 60 660 40 1.5 a-1.0 Table 6: Employed persons by activity Number in '000 Change in Number 2013 VIII 13 VII 14 VIII 14 VIII 14/ VIII 13 I-VIII 14/ I-VIII 13 Manufacturing 177.7 177.6 178.5 179.0 1,402 397 Construction 54.3 56.0 55.1 55.7 -386 -315 Market services 333.1 333.3 340.5 342.0 8,649 4,613 -of which: Wholesale and retail trade, repair of motor vehicles and motorcycles 104.2 103.4 103.7 104.0 606 -716 Public services 170.1 170.1 170.0 171.3 1,164 795 Public administration and defence, compulsory social security 49.1 48.9 48.9 48.9 30 -305 Education 65.4 65.4 64.7 66.0 559 567 Human health and social work activities 55.6 55.8 56.3 56.4 575 533 Other 58.4 58.5 57.6 57.7 -829 -2,745 Total 793.6 795.5 801.7 805.5 10,000 2,745 Source: SURS; calculations by IMAD. Table 7: Unemployment flows I-XII 13 I-XI 13 I-XI 14 XI 14 INFLOW OF UNEMPLOYED - TOTAL 108,344 97,374 91,773 7,646 First-time jobseekers 19,071 17,700 17,579 1,466 Jobseekers who lost work 88,710 79,375 74,103 6,176 Bankruptcy of the company 3,732 3,470 3,462 150 Business reasons or compulsory settlement 17,896 15,952 13,696 1,082 Termination of fixed-term contracts 54,004 47,962 45,116 3,850 Other reasons 13,078 11,991 11,829 1,094 Other (transitions between records) 563 299 91 4 OUTFLOW OF UNEMPLOYED - TOTAL 102,390 96,122 100,377 8,136 Unemployed who found work 65,054 61,546 67,732 4,722 Public works 5,423 5,389 5,834 131 Self-employment 5,789 5,081 3,038 233 Transitions into inactivity 13,295 12,377 11,644 1,200 Retirement 8,511 7,904 6,434 652 Breaches of regulations 14,772 13,594 11,247 1,288 Other (transfer to other registers, other) 9,269 8,605 9,754 926 other activities, owing mainly to a larger number of self-employed persons. According to the LFS, it remained 0.4% higher year-on-year in the third quarter. Compared with the previous quarter, employment declined on account of a lower number of self-employed persons and unpaid family workers. Employment as measured by national accounts statistics was also up year-on-year (by 0.8%). Registered unemployment has been falling since March (seasonally adjusted), mainly due to increased hiring. At the end of November, 115,411 persons were registered as unemployed, 3.3% fewer than in the previous November. In the first eleven months to November, fewer persons registered as unemployed than in the same period last year, chiefly on account of a smaller inflow into unemployment as a result of the termination of fixed-term contracts and fewer dismissals for economic reasons. The outflow from unemployment was larger than in the same period last year, the main factor being that more people found work. On the other hand, there were fewer transitions into inactivity and fewer breaches of regulations. The registered unemployment rate fell further in September (by 0.1 percentage points to 12.9%, seasonally adjusted) and was also slightly lower year-on-year. The number of the unemployed as measured by the LFS also dropped further in the third quarter, while the unemployment rate remained unchanged at 9.6%, seasonally adjusted. Slightly rising since mid-2013, average gross earnings per employee rose by a further 0.5% in the third quarter (seasonally adjusted). After stagnating in 2012, gross earnings in the private sector have been gradually rising for one and a half years (by 0.3% in the third quarter, seasonally adjusted). For the first time in two years, in 2014, gross earnings are also increasing in the public sector. Amid further growth in public corporations15 15 Public corporations are corporations controlled by units of the general government sector, the basic criterion for determining control being majority ownership (owning more than half of the voting shares). They include companies, banks, insurance corporations, old people's homes, pharmacies, etc. Table 8: Wages by activities Gross wage per employee, in EUR Change, in % 2013 IX 2014 2013/ 2012 IX 14/ VIII 14 IX 14/ IX 13 I-IX 14/ I-IX 13 Average gross wage per employee 1,523.18 1,519.32 -0.2 0.2 1.6 1.1 Private sector activities (A-N; R-S) 1,473.47 1,466.18 0.7 0.0 1.8 1.5 Industry (B-E) 1,482.76 1,498.95 2.6 -0.2 4.2 3.3 - of which manufacturing 1,436.53 1,449.36 2.8 0.2 3.7 3.3 Construction 1,188.38 1,191.67 -1.4 1.4 0.7 0.1 Traditional services (G-I) 1,355.65 1,341.52 0.1 0.3 1.4 0.9 Other market services (J-N;R-S) 1,691.40 1,651.20 -1.3 -0.4 -0.9 -0.1 Public service activities (O-Q) 1,670.91 1,679.73 -2.3 0.5 1.2 0.1 - Public administration and defence, compulsory social security 1,727.19 1,767.42 -1.4 0.9 2.8 0.8 - Education 1,621.86 1,632.56 -3.3 2.2 0.6 -0.2 - Human health and social work activities 1,677.78 1,654.95 -2.0 -2.0 0.4 -0.3 Source: SURS; calculations by IMAD. (where they otherwise fluctuate significantly), they also rose again in the general government in the third quarter (0.4%, seasonally adjusted). As the suspended promotions16 to public servants started to be paid in April 2014 and as one year had passed since the introduction of the latest austerity measures, average gross earnings in the general government were slightly higher year-on-year in the first nine months (by 0.3%; last year in the same period: -3.0%). In the public sector, they increased slightly more relative to the same period last year owing to faster growth in public corporations (1.7%), which was similar to that in the private sector (1.5%). Slika 18: Average gross earnings per employee -Total -----Private sector -Public sector ---- - of which general government sector ......... -of which public corporations 1,900 1,800 1,700 1,600 1,500 1,400 1,300 1,200 a a a Source: SURS. 16 The suspended promotions are public servants' promotions from 2011 (promotions to a higher job title) and 2012 (promotions to a higher job title and pay rank), which, in line with the 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 of the RS, No. 46/2013) started to be paid only in April 2014. Prices Amid continued weak demand and in the absence of international inflationary pressures, consumer prices were down again year-on-year17 in November (-0.2 %). Deflation was recorded for the fourth consecutive month, the main factors being the continuation of modest household consumption and the developments on the world markets where commodity prices have fallen noticeably this year. The decline is still mainly reflected in the year-on-year falling of prices of food and energy (particularly liquid fuels). The latter have been influenced primarily by a pronounced year-on-year decline in global oil prices in euros in recent months.18 Prices of durable and semi-durable goods were also lower (their contribution amounting to -0.4 percentage points). Among all groups Slika 19: Share of the CPI with year-on-year growth lower than 0% -CPI (left axis) -Growth lower than 0% (right axis) 80 70 60 50 # 40 c^ u 30 10 0 -10 17 Given month/the same month one year previously. 18 Brent oil prices in EUR were down 20% year-on-year in November. 8 7 6 5 4 3 2 0 -1 Table 9: Breakdown of the HICP in sub-groups - October 2014 Slovenia Euro area Cum. % Weight % Contribution in p.p. Cum. % Weight % Contribution in p.p. Total HICP 0.7 100.0 0.7 0.0 100.0 0.0 Goods 0.0 64.8 0.0 -0.2 57.2 -0.1 Processed food, alcohol and tobacco 0.9 16.1 0.1 0.6 12.3 0.1 Non-processed food 0.4 7.5 0.0 -1.5 7.5 -0.1 Non-energy industrial goods -0.2 26.4 -0.1 0.2 26.7 0.1 Durables -1.6 8.7 -0.1 -0.6 8.4 -0.1 Non-durables 0.0 8.5 0.0 0.4 8.1 0.0 Semi-durables 2.3 9.2 0.2 2.5 10.2 0.3 Energy -1.2 14.7 -0.2 -1.8 10.8 -0.2 Electricity for households -3.2 2.8 -0.1 1.7 2.7 0.0 Natural gas 1.8 1.1 0.0 -1.7 1.8 0.0 Liquid fuels for heating 1.5 1.3 0.0 -9.3 0.9 -0.1 Solid fuels -8.5 1.0 -0.1 -0.4 0.1 0.0 District heating 1.9 0.8 0.0 -0.3 0.6 0.0 Fuels and lubricants -0.5 7.6 0.0 -2.7 4.8 -0.1 Services 2.5 35.2 0.9 0.6 42.8 0.3 Services - dwellings 4.2 3.2 0.1 1.5 10.5 0.2 Services - transport 2.6 6.2 0.2 1.1 7.3 0.1 Services - communications -0.3 3.6 0.0 -2.7 3.1 -0.1 Services - recreation, repairs, personal care 2.3 14.3 0.3 0.6 14.7 0.1 Services - other services 2.8 8.0 0.2 1.4 7.2 0.1 HICP excluding energy and non-processed food 1.2 77.8 0.9 0.5 81.7 0.4 Source: Eurostat; calculations by IMAD. Note: ECB classification Figure 20: Headline and core inflation in Slovenia and in the euro area Figure 21: Breakdown of year-on-year inflation s 3 ^ 2 -Slovenia HICP ■ Slovenia HICP -core inflation -Euro area HICP ■ Euro area HICP -core inflation 7 6 5 o 2 (D 1 d O " 0 -1 -2 Other Services Fuels and energy Food o o ^ ^ "Soui^ce: SuUrS;(Calculation;; by I^AD. Source: Eurostat. of prices that have risen this year,19 services prices stand out but their contribution dropped by 0.3 to 0.1 percentage points in November on account of lower supplementary health insurance premiums (one-off factor). Core inflation remained modest amid low food and energy prices. 9 Given month/December one year previously. 8 8 5 4 0 The euro area recorded the lowest inflation20 in the past five years. According to Eurostat's flash estimate, prices increased by 0.3 % year-on-year in the euro area in November. The low inflation was, alongside the movements of global commodity prices, primarily due to lower energy prices (contribution: -0.3 percentage points). The main factor in growth was higher prices of services. Growth in prices of other goods decelerated amid continued weak demand. The latest available data (for the month of October) show deflationary movements in two euro area countries, while in others, inflation was significantly below the ECB's medium-term target (2%). Figure 22: Euro area inflation, October 2014 2.5 12013 ■ October 2014 2.0 1.5 1.0 CL — CQU— Source: Eurostat; calculations by IMAD. Table 10: Industrial producer prices and import prices Industrial producer prices Change, in % 2013 X14 Total -0,5 0,0 Domestic market -0,3 -1,0 Foreign market -0,7 1,1 Import prices 2013 X 14 Total -0,9 -0,5 Euro area 0,4 -1,9 Non-euro area -2,6 1,5 Source: SURS; calculations by IMAD. In October, industrial producer prices remained lower year-on-year on the domestic market (-1.0%), while they were up on foreign markets (1.1%). Price movements on the domestic market were mainly marked by lower prices in the manufacture of ICT equipment and electrical appliances (-2.0%); prices in the manufacture of metals were up again (3.5%). Besides higher prices in the manufacture of transport equipment (5.2%), the latter contributed to growth on foreign markets, which remains Figure 23: Movement of industrial producer prices -PPI (domestic market) -----Mfr.of basic metals,fabricated metal prod.,ex. mach.,equip.(domestic) -----Mfr.of food products;beverages;tobacco products (domestic) - PPI (foreign market) . ......... 1 - VVi . L __________ .....I i i.....y T.......... 1 « •• 1 _ • A..... 1 J '...........'.................'........... ...........r...........!...........T...........1' 0 As measured by the HICP. 20 16 12 # 8 4 0 (Z (U -8 -12 -16 Source: SURS. higher for the second consecutive month. In October, the year-on-year decline in import prices was somewhat smaller than in September (-0.5%). This was, in addition to lower prices in the manufacture of chemical products, due to higher prices in the manufacture of metals (3.6%) and a continuation of subdued growth in the manufacture of ICT equipment and electrical appliances (0.4%). Balance of payments The current account of the balance of payments has been in surplus for the third consecutive year. In addition to growing exports, the high surplus mainly reflects the deleveraging process in the private sector, which continues to make net repayments abroad amid limited access to funding. The surplus in current transactions reached EUR 634.2 m in the third quarter of this year and was higher year-on-year mostly due to a higher surplus in goods and services. The deficit in factor income was lower, while the deficit in current transfers remained roughly unchanged relative to the same period last year. In the first nine months, the current account surplus totalled EUR 1,558.3 m, compared with EUR 1,604.5 m in the same period last year. In the third quarter, Slovenia recorded the widest surplus in external trade since 1996. The surplus in external trade (EUR 922.3 m) widened year-on-year on account of a higher surplus in goods and services. The improvement in the balance of payments was mainly due to quantity factors (faster growth in exports than imports) and better terms of trade. The latter were mainly the result of lower import prices of manufactured goods, energy and raw materials denominated in euros. The surplus in trade in services was also up in the third quarter, mainly due to a wider surplus in transport and construction services, as revenue of Slovenian construction companies abroad increased slightly. A significant decline was recorded for -1.0 -1.5 -2.0 expenditure on construction works carried out by foreign companies in Slovenia, which is related to last year's large investment in an energy facility. The surplus in trade in travel narrowed year-on-year. As a result of a worse tourist season (weather conditions, last year's sports event), revenue from non-residents' travel declined, while domestic spending abroad continued. In the first nine months, the surplus in external trade totalled EUR 2,341.0 m, compared with EUR 2,195.5 m in the same period last year. Despite the rising net interest payments, the deficit in the balance of factor income was down year-on-year in the third quarter. This was mainly attributable to income from labour and capital. Because of a larger number of daily migrants working abroad, income from labour rises, but expenditure from labour also started to increase in the second half of last year due to increased hiring of foreigners. The deficit in capital income narrowed year-on-year, largely as a result of a lower net outflow of income from equity capital of direct investment. Net interest payments continue to increase, having totalled EUR 566.8 m in the first nine months (EUR 369.3 m in the same period last year). Figure 24: Components of the current account of the balance of payments ■ Merchandise trade ■ Factor income -Current account Services trade ■ Currenti transfers 1000 800 600 400 E 200 cc ZD uu 0 -200 -400 -600 -800 -1000 a a a a a Source: BoS; calculations by IMAD. International financial transactions continue to reflect limited access to international financial markets. The third quarter recorded a net capital outflow again, at EUR 1,101.1 m. In the first nine months, the net capital outflow stood at EUR 2,132.1 m, compared with EUR 2,256.7 m in the same period last year. Households and enterprises increased deposits at foreign banks, while commercial banks continued to make debt repayments abroad. This year's net inflow of direct investment is primarily due to the sale of domestic companies to foreign owners. The net inflow in the third quarter, which amounted to EUR 285.9 m, was also mainly the result of equity capital related to the sale of a domestic company to a German investor. Inter-company lending and the coverage of corporate losses by reinvested profits were lower. After the high inflows in the first two quarters due to the sale of long-term bonds, portfolio investment recorded a net outflow in the third quarter (EUR 66.1 m). The general government sector repaid a portion of long-term liabilities to foreign portfolio investors. The BoS reduced the volume of long-term capital investment, while commercial banks were selling bonds and notes to foreign investors. Figure 25: Financial transactions of the balance of payments ■ Direct investment I Financial derivatives -Net financial flow I Portfolio investment ■ Other investment 3,500 3,000 2,500 2,000 1,500 1,000 ^ 500 D ^ 0 -500 -1,000 -1,500 -2,000 -2,500 -3,000 -3,500 -4,000 a a a a a a a Source: BoS; calculations by IMAD. Gross external claims in debt instruments stood at EUR 32.8 bn at the end of September (88.7% of GDP) and were EUR 4.9 bn higher relative to December 2013. The increase was mainly underpinned by financial investment of the BoS, in addition to higher short-term claims of the banking and other sectors (a rise in financial assets and deposits in foreign accounts). Owing to further growth in exports of goods and services, there was also an increase in short-term credits used by enterprises to finance the external sector. The net outflow of other investment continued and reached EUR 1,320.0 m in the third quarter, once again as a result of a net outflow of currency and deposits. As deposits are less risky than other investment, the BoS increased its financial assets in the form of currency and deposits. Gross external debt amounted to EUR 44.0 bn at the end of September (119.1% of GDP), up EUR 4.1 bn from December 2013. The increase was the result of general government borrowing by selling long-term bonds. Banks continued to repay long-term loans, while non-residents were withdrawing deposits from Slovenian banks. After the BoS still recorded EUR 1.1 bn in liabilities at the end of 2013, the Target position has been positive since the first quarter of this year. At the end of September, Slovenia's net external debt amounted to EUR 11.2 bn (30.4% of the estimated GDP) and was only EUR 0.8 bn lower than in December 2013 (3 percentage points of GDP). Figure 26: Slovenia's net external debt ■ General government sector ■ Private sector i Bank of Slovenia -Net external debt 20000 10000 -10000 a a a a a a a Source: BoS. Note: A positive (negative) value means net external debt (net external claims). Table 11: Balance of payments I-IX 14, in EUR m Inflows Outflows Balance1 Balance, I-IX 13 Current account 23,045.8 21,487.5 1,558.3 1,604.5 - Trade balance (FOB) 17,405.2 16,469.7 935.5 622.3 - Services 4,136.3 2,730.8 1,405.5 1,573.3 - Income 531.3 1,190.4 -659.1 -481.3 Current transfers 973.0 1,096.6 -123.6 -109.8 Capital and financial account 5,459.4 -7,710.6 -2,251.1 -2,259.5 - Capital account 318.9 -346.1 -27.2 32.8 - Capital transfers 223.1 -259.4 -36.3 21.8 - Non-produced, non-financial assets 95.8 -86.7 9.1 11.1 - Financial account 5,140.5 -7,364.5 -2,223.9 -2,292.4 - Direct investment 772.9 21.8 794.7 -682.3 - Portfolio investment 4,153.1 74.7 4,227.7 1,806.2 - Financial derivates -15.5 30.5 15.0 -17.0 - Other investment 230.1 -7,399.7 -7,169.6 -3,363.5 - Assets 214.8 -5,018.4 -4,803.6 -2,004.5 - Liabilities 15.3 -2,381.3 -2,366.0 -1,359.0 - Reserve assets 0.0 -91.8 -91.8 -35.7 Net errors and omissions 692.8 0.0 692.8 655.1 Source: BoS. 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. Financial markets The repairing of bank balance sheets continues but the situation remains fairly tight. In October, EUR 1.1 bn of claims were transferred from the banks included in the restructuring process to the BAMC. In the ten months to October,21 the volume of loans to domestic non-banking sectors thus shrank by EUR 2.3 bn. The decline was almost entirely (more than 95%) the result of a smaller amount of corporate and NFI loans due to the deleveraging and the transfer of claims to the BAMC. Household loans fell marginally, while government loans enjoyed modest growth. This year, household and government deposits have otherwise been rising but in the last two months the growth of household deposits came to a halt. The quality of bank claims started to deteriorate more rapidly in September, which is in our estimation also attributable to a different assessment of existing risks. The volume of household loans at domestic banks remains low. Household loans shrank by around EUR 110 m in the ten months of this year, which is 55% less than in the same period last year. A decline in household deleveraging is primarily the result of lower repayments of consumer loans and, to some extent, renewed growth in housing loans, which increased almost by EUR 35 m in the first ten months. Corporate and NFI deleveraging at domestic banks continues this year. In the ten months to October, the volume of corporate and NFI loans fell by EUR 2.2 bn. EUR 1.1 bn of the decline was accounted for by corporate and NFI deleveraging, which is approximately one quarter less than in the same period of last year, while the second half was the result of the transfer of claims to the BAMC. More than 90% of the total decline was attributable to a smaller volume of corporate loans. Corporate and NFI borrowing abroad is fairly volatile this year. Corporate net deleveraging abroad amounted to more than EUR 150 m in the first three quarters of this year, while in the comparable period of 2013, borrowing and deleveraging abroad was balanced, according to our estimate.22 Total net repayments are the result of accelerated repayments of long-term loans (EUR 1.3 bn). Data on long-term borrowing (which is still very high, at EUR 1.1 bn) indicate that Slovenian enterprises have relatively good access to international credit markets. The net flow of short-term loans exceeded EUR 110 m in the first nine months of this year, recording one of the highest levels since the onset of the international financial crisis. The gaps between domestic and average interest rates in the euro area persist at around 200 basis points, approximately. In contrast to deposit interest rates, they have not yet declined significantly since the beginning of the banking system restructuring. 21 In the loan movements in the first nine or ten months, the change in loan volume as at 30 September or 31 October 2014 compared with 31 December 2013 is shown. 22 We eliminated the impact of two one-off events, i.e., the requalification of liabilities from foreign direct investment into loans from non-affiliated companies and increased borrowing of one of the energy companies, which contributed EUR 1.1 bn to total net flows, according to our estimate. 15000 5000 0 -5000 Figure 27: Changes in the volume of loans to households, enterprises and NFIs and the government Households Enterprises and NFIs I Government - Total Source: BoS; calculations by IMAD. After significant deleveraging in previous years, banks continue to make debt repayments abroad. In the first nine months of the year, banks recorded EUR 980 m in net repayments abroad, which is otherwise the lowest figure in the past four years. The bulk of net repayments are attributable to repayments of loans (solely long-term loans), the net outflow of foreign deposits from banks totalling more than EUR 250 m. The inflow of bonds due to the issuance of a new bond of one of the banks was positive in the nine months to September, almost at EUR 140 m. Figure 28: Net repayments of foreign liabilities of domestic banks 2,000 1,500 1,000 Bonds Deposits Short-term loans Long-term loans Total bonds -1,000 -1,500 Source: BoS; calculations by IMAD. The volume of government deposits at banks is increasing, while growth in household deposits came to a halt. In the first ten months, government deposits expanded by EUR 1.3 bn as a result of government borrowing and the transfer of assets from the central banks to accounts with commercial banks. The government placed the bulk of funds (70%) in short-term deposits. Household deposits stopped increasing at the end of the third and the beginning of the last quarter but were still EUR 600 m higher than at the end of 2013 in October. The maturity of household deposits is deteriorating relatively rapidly due to extremely low deposit interest rates, according to our estimate. Among time deposits, the volume of long-term deposits is still rising but their increase accounts for less than a third of the increase in overnight deposits, which totalled EUR 700 m in the first ten months of 2014 and was the largest since comparable data have been available.23 At the end of the third quarter, the quality of bank assets started to deteriorate more rapidly again after the moderation in previous months. The share of arrears of more than 90 days (EUR 6.2 bn) thus stood at 15.7% at the end of September, which is almost 1 percentage point more than a month earlier. According to our estimate, this is also attributable to a different assessment of existing risks. This was also reflected in a slightly more intense creation of impairments and provisions, which amounted to around EUR 75 m in September and almost EUR 360 m in the first nine months, which is otherwise three quarters less than in the same period of 2013. Figure 29: Creation of impairments and provisions and the share of arrears of more than 90 days in the Slovenian banking system Provisions and impairments -Share of arrears of more than 90 days (right axis) 500 -450 400 350 300 250 200 150 100 50 0 J -50 — lüi! ■Ill 22 20 18 16 14 12 10 8 6 4 2 0 Source: BoS; calculations by IMAD. In November, the monthly average of the 10-year euro government bond yield decreased by 12 basis points to 2.52% compared with that in the previous month, while the average spread against the benchmark Bund remained constant (173 basis points). The market volatility, which also affected bond yields in the previous month, eased 3 From 2005 onwards. 500 - 0 -500 Table 12: Financial market indicator Domestic bank loans to nonbanking sector and household savings Nominal amounts, EUR bn Nominal loan growth, % 31. XII 13 31. X 14 31. X 14/30. IX 14 31. X 14/31. XII 13 31. X 14/31. X 13 Loans total 26,176.0 23,850.5 -4.5 -8.9 -19.9 Enterprises and NFI 15,594.8 13,373.5 -7.7 -14.2 -29.8 Government 1,664.0 1,669.8 0.4 0.4 -0.9 Households 8,917.3 8,807.2 -0.1 -1.2 -2.5 Consumer credits 2,213.4 2,140.9 -0.2 -3.3 -7.8 Lending for house purchase 5,306.5 5,341.0 0.2 0.6 1.7 Other lending 1,397.3 1,325.2 -0.7 -5.2 -9.1 Bank deposits total 14,588.1 15,190.3 0.0 4.1 4.1 Overnight deposits 6,446.6 7,146.8 0.1 10.9 12.4 Short-term deposits 3,681.9 3,355.3 -0.8 -8.9 -10.3 Long-term deposits 4,456.1 4,683.2 0.4 5.1 4.3 Deposits redeemable at notice 3.5 4.9 8.9 39.8 5.9 Mutual funds 1,854.6 2,114.3 -0.8 14.0 14.7 Government bank deposits, total 1,284.1 2,570.6 18.2 100.2 -31.4 Overnight deposits 22.9 455.2 1,092.7 1,889.0 15.9 Short-term deposits 512.8 1,414.2 -2.1 175.8 -20.7 Long-term deposits 738.5 615.9 -0.1 -16.6 -59.4 Deposits redeemable at notice 9.8 85.3 12.8 767.1 53.2 Sources: Monthly Bulletin of the BoS, SMA (Securities Market Agency); calculations by IMAD. in November. The government bond yield started to decrease towards the end of the month, particularly in the last days. Poor inflation data increased expectations that the ECB would eventually initiate large purchases of government securities, which triggered a fall in government bond yields to historic lows across Europe. Figure 30: 10-year government bond yield spread vis-avis German bond - Slovenia - Italy - Portugal Ireland -Spain ----France ^ ^ 4 I ^ 1 ;3 \ : 2 ^^ ^^ Source: Bloomberg; calculations by IMAD. Public finance The general government deficit24 in the first three quarters as a whole amounted to EUR 1.032 bn; this is EUR 314.9 m less than in the same period last year and 85% of the deficit according to the revised state budget for 2014 (EUR Figure 31: Consolidated general government revenue and expenditure 17.5 16.5 15.5 15.0 14.0 ^ rN rN m Crt c^ CD CD Source: MF; calculations by IMAD. 24 According to the consolidated general government budgetary accounts on a cash basis. 7 6 1.215 bn).25 The revision of the state budget, which was approved by the National Assembly on 19 November, was required mainly due to higher-than-planned expenditure on interest payments, transfers to the pension fund, expenditure on goods and services and more modest absorption of EU cohesion policy funds, and to a smaller extent to the failure to introduce the real estate tax, as this was mostly offset by other tax and non-tax revenues. The year-on-year decline in the general government deficit is explained by higher growth in general government revenue (by EUR 459.2 m or 5.0%) - which was mainly the result of public finance measures and to a lesser degree the pick-up of economic activity - than growth in general government expenditure (totalling EUR 260.4 m or 2.2%) in the first three quarters of the year. The bulk of the year-on-year increase in general government revenue in the first three quarters stems from higher tax revenues; non-tax revenues were also up substantially. Among tax revenues excluding social contributions - which were EUR 361.6 m or 6.7% higher year-on-year - the highest growth was recorded by corporate income tax (by EUR 186.8 m or 114.5%) and value added tax (by EUR 167.7 m or 7.9%). It was mainly the result of lower (year-on-year) refunds of overpaid tax for the previous year (in the case of the former) and the effect of tax rates increases (in the latter) and not so much of the strengthening of economic activity. Moreover, the year-on-year growth of gross earnings and the number of persons in formal employment, coupled with the reduction in some tax allowances,26 increased revenue from personal income tax (up EUR 32.0 m or 2.3%) and social contributions (up EUR 97.6 m or 2.6%). Given the delay in collecting compensation for the use of building ground (after the government failed to introduce the real estate tax), taxes on property still lag behind their levels in the same period of last year, by EUR 34.5 m or 18.8%. Excise duties were also slightly lower than last year (by EUR 8.8 m or 0.8%), as were customs duties (by EUR 3.9 m or 6.4%), which is related to Croatia's accession to the EU. Non-tax revenues continued to increase year-on-year, mainly on the back of one-off and extraordinary revenues; receipts from the EU budget were also higher than in the comparable period of last year. Non-tax revenues were up EUR 156.4 m (21.0%) year-on-year in the first three quarters, which was due to the one-off revenue from the sale of wireless spectrum licences, higher payments of treasury single account surpluses (from 2013) into the state budget and foreign exchange gains in the conversion of bonds. After the partial release of the suspended reimbursements of Cohesion Policy funds into the state budget in August,27 25 The general government deficit is almost entirely due to the state budget. 26 Tying the mandatory valorisation of allowances and the brackets to more than 3% growth in consumer prices, and the abolition of seniority tax allowance. 27 The remaining reimbursements suspended by the Commission in March 2014 were formally released only at the end of October. The funds will be paid over the next months. Figure 32: Contributions of individual revenue categories to year-on-year revenue growth ■ Capital and transferred revenues and donations received ■ Receipts from the EU budget Non-tax revenues Tax revenues ^ »Total revenues ■^^i 2 H o 0 2010 2011 2012 2013 2013 2014 (Jan-Sep) (Jan-Sep) Source: MF - Bulletin of Government Finance; calculations by IMAD. receipts from the EU budget had risen to a level just above that in the same period of 2013 by the end of the third quarter (an increase of EUR 24.4 m or 4.5%). Other revenues together (transferred revenues from other extra-budgetary funds, capital revenues and donations received) were down EUR 64.6 m (54.4%). The year-on-year growth of general government expenditure in the first three quarters arises from strong investment growth, which continued in September, and interest payments, while all other major expenditure categories declined year-on-year. In the first three quarters as a whole, capital expenditure and transfers were up EUR Figure 33: Contributions of individual expenditure categories to year-on-year expenditure growth I Salaries, wages, oth. personnel expendit. with social security contribut. Expenditure on goods and services ■ Interest payments ■ Reserves ■ Current transfers »Capital expenditure and capital transfers ■ Payments to the EU budget • Total expenditure 4 2 2010 2011 2012 2013 2013 2014 (Jan-Sep) (Jan-Sep) Source: MF -Bulletin of Government Finance;calculations by IMAD. P -4 -6 3 0 -1 -2 -3 4 Box 2: Drawing of cohesion funds in the 2007-2013 programming period, with emphasis on 2014 Figure 34: Absorption of Cohesion Policy funds in the 2007-2013 programming period (as at 31.12.13) ■ Appropriations ■ Signed contracts ■ Payments to beneficiaries ■ Certified claims for reimbursement ■ Delays ■ Absorption relative to financial allocation for 2007-2013, 30 Sep. 2014 A Absorption relative to financial allocation for 2007-2013, 31 Dec. 2013 2000 1500 100 80 In the 2007-2013 financial framework,1 Slovenia was committed EUR 4.1 bn for the implementation of Cohesion Policy programmes (OP SRDP,2 OP HRD,3 OP ETID4). Together with additional appropriations,5 EUR 4.3 bn (106.3% of the available funds) had been allocated by the end of September 20146 (operations confirmed either through calls for tenders or directly).7 EUR 3 bn was paid for all three operational programmes from the state budget by the end of September (74.5% of the allocated funds); reimbursements to the state budget amounted to EUR 2.6 bn in the same period (64.3% of the allocated funds). The highest percentage of allocated funds with regard to the available funding was recorded by the OP ETID (116.8%), which is otherwise the OP with the lowest absorption rate (55.9% in payments and 39.9% in reimbursements). In terms of reimbursements to the state budget, the most successful operational programme is the OP SRDP (80.6% of the available funds), followed by the OP HRD (76.1%). The drawing of resources from Structural Funds intended for the OP SRDP and OP HRD poses no major problems, but there are still difficulties in the implementation of large infrastructure projects (OP ETID). To avoid problems, riskier projects are being replaced by contingency projects (that involve minimal risk) and postponed to the 2014-2020 financial perspective. The highest absorption rate is recorded by projects in the fields of sustainable energy use (81.5% of the allocated funds) and road and port infrastructure (77.0% of the allocated funds) and the lowest by projects in the area of municipal waste management (29.3%). 40 Source: Governm^ent^Office for Deve 0 Cohesion Policy. The absorption of cohesion funds in the first nine months of 2014 was higher than in the same period last year. Reimbursements to the state budget amounted to EUR 451.0 m compared with EUR 375.5 m last year. Delays8 in the total programming period (1 January 2007-30 September 2014) decreased substantially, to EUR 178.3 m. Broken down by statistical regions, the most cohesion funds (EUR 990.9 m or 78.7% of the foreseen payments) were paid to Slovenia as a single region (particularly under the OP SRDP and OP HRD) and the least to the Zasavska statistical region (EUR 34.6 m or 60.6% of the foreseen payments). The highest amounts of grants for infrastructure and environmental projects were paid to beneficiaries in the Pomurska statistical region (EUR 202.3 m or 24.8% of all payments for OP ETID projects). In 2014, the European Commission suspended the payments of cohesion funds to Slovenia due to alleged irregularities in the operational programmes ETID and SRDP established during the audit procedure.9 The suspension has however not affected the implementation of Cohesion Policy programmes, as the EU-funded projects are financed from the state budget in advance, meaning that beneficiaries have already received the necessary funds (from Slovenia's state budget). Urged by Slovenia to unblock funds for the so-called non-problematic projects where no irregularities were found, the Commission decided in October to release the suspended funds (EUR 251.8 m) in tranches paid at the end of 2014 and the beginning of 2015. On the initiative of eight Member States, discussions with the European Commission are currently underway concerning an extension of the eligibility for funds until the end of 2016, which would ease the burden of advance payments on the state budget. 1 The 2007-2013 programming period formally came to an end, but in accordance with the n+2/3 rule, the funds can be drawn until the end of 2015/16. 2 Operational Programme for Strengthening Regional Development Potentials. 3 Operational Programme for Human Resource Development. 4 Operational Programme for Environmental and Transport Infrastructure Development. 5 Additional funds allocated for contingency projects to prevent the risk of losing EU funds in the event of not carrying out the already approved projects. 6 As at 30 September 2014. 7 In the case of public tenders, projects are approved by the relevant line ministry, while in directly confirmed operations, smaller projects are approved by the managing authority and larger projects (over EUR 50,000) by the European Commission. 8 I.e. the difference between payments to beneficiaries and certified claims for reimbursement. 9 In March 2014, the European Commission suspended the payments for OP ETID and OP SRDP projects in the amount of EUR 354.6 m due to irregularities in the supervision and management of programmes and a lack of transparency in public procurement. Table 13: Consolidated general government revenue and expenditure 2013 EUR m Growth, % EUR m % of GDP Structure, % 2013 (I-IX) 2014 (I-IX) IX 14/ IX 13 I-IX 14/ I-IX 13 REVENUES (consolidated) - total 14,728.2 40.7 100.0 10,647.9 11,223.3 8.5 5.4 TAX REVENUES 12,648.4 35.0 85.9 9,242.3 9,701.5 8.0 5.0 Personal income tax 1,868.0 5.2 12.7 1,363.9 1,395.9 2.1 2.3 Corporate income tax 265.2 0.7 1.8 163.2 350.1 12.5 114.5 Taxes on property 254.1 0.7 1.7 183.3 148.8 31.5 -18.8 Value added tax 3,029.1 8.4 20.6 2,135.1 2,302.7 1.8 7.9 Excise duties 1,490.7 4.1 10.1 1,109.3 1,100.5 34.0 -0.8 Customs duties 77.5 0.2 0.5 60.5 56.6 19.3 -6.4 Social security contributions 5,127.2 14.2 34.8 3,809.6 3,907.2 2.9 2.6 NON-TAX REVENUES 989.0 2.7 6.7 746.3 902.6 20.4 21.0 CAPTIAL REVENUES, DONATIONS RECEIVED AND TRANSFERRED REVENUES 152.4 0.4 1.0 118.7 54.1 -85.6 -54.4 RECEIPTS FROM THE EU BUDGET 938.4 2.6 6.4 540.7 565.1 106.9 4.5 EXPENDITURES (consolidated) - total 16,286.4 45.1 100.0 11,995.1 12,255.6 1.9 2.2 CURRENT EXPENDITURE 6,838.4 18.9 42.0 5,158.6 5,196.0 1.6 0.7 Salaries, wages and other personnel expenditures 3,616.7 10.0 22.2 2,716.4 2,714.2 1.6 -0.1 Expenditure on goods and services 2,238.9 6.2 13.7 1,651.7 1,613.2 0.8 -2.3 Domestic and external interest payments 840.1 2.3 5.2 692.1 804.7 3.1 16.3 Reserves 142.6 0.4 0.9 98.4 63.9 8.7 -35.1 CURRENT TRANSFERS 7,671.3 21.2 47.1 5,764.7 5,716.2 -3.7 -0.8 Subsidies 519.5 1.4 3.2 379.9 357.2 -20.5 -6.0 Transfers to individuals and households 6,343.1 17.5 38.9 4,788.6 4,783.1 -1.4 -0.1 Transfers to non-profit organisations, other current domestic transfers 734.2 2.0 4.5 528.9 525.5 -11.9 -0.7 Current transfers abroad 74.4 0.2 0.5 67.2 50.5 -61.6 -24.9 CAPITAL EXPENDITURE AND CAPITAL TRANSFERS 1,351.3 3.7 8.3 711.5 1,022.6 45.8 43.7 PAYMENTS TO THE EU BUDGET 425.5 1.2 2.6 360.4 320.8 -50.7 -11.0 SURPLUS (DEFICIT) -1,558.2 -4.3 -1,347.2 -1,032.3 -23.4 Source: Ministry of Finance, Bulletin of Government Finance; calculations by IMAD. Note: * The share of GDP is calculated on the basis on GDP values according to ESA-2010 (36,144,037 EUR m). Figure 35: Receipts from the EU budget in 2013 and 2014 ■ Total receipts in 2014 (January-October) ■ Total receipts in 2013 (January-December) Figure 36: 2014 Planned and absorbed EU funds, 2013 and ■ Absorption rate with regard to the revised budget for 2014 ■ Absorption rate with regard to the revised budget for 2013 Other 100 150 200 250 300 350 400 450 In EUR m Source: MF; calculations by IMAD. 0 10 20 30 40 50 60 70 80 90 100 110 120 In % Source: MF; calculations by IMAD. 0 50 311.1 m (43.7%) year-on-year, while interest payments increased by EUR 112.6 m (16.3%). Within current expenditure, the largest year-on-year declines were recorded for expenditure on goods and services (by EUR 38.5 m or 2.3%), reserves (by EUR 34.5 m or 35.1%) and subsidies (by EUR 22.7 m or 6.0%), despite the year-on-year increase in subsidies to public enterprises. Payments to the EU budget were also considerably lower (by EUR 39.7 m or 11.0%), as a result of lower payments of GNI resources into the EU budget, while current transfers abroad fell by EUR 16.7 m or 24.9%. Owing to September's increase relative to the same month of 2013, salaries, wages and other personnel expenditures including social contributions were just marginally lower year-on-year in the first three quarters (by EUR 2.1 m or 0.1%). With improvement in the labour market situation, transfers to individuals and households dropped slightly below the level seen in the same period last year (by EUR 5.6 m or 0.1%). The favourable fiscal effect of the year-on-year declines in transfers to the unemployed, family benefits and parental compensations and sickness benefits was almost neutralised by growth in other expenditures in this category (on pensions, social security transfers and scholarships). The net surplus of Slovenia's state budget against the EU budget in the first ten months was higher (EUR 338.3 m) than in the same period last year (EUR 217.2 m). The highest absorption rate was recorded for receipts from the Common Agricultural and Fisheries Policies, despite the low payments in the last five months (for example, only EUR 7.3 m in October), and the lowest for receipts from the Cohesion Fund (42.7%; in October EUR 37.9 m, which was the second largest inflow since September). Receipts from Structural Funds (EUR 283.8 m; absorption rate: 55.6%) were similar to those in the same period of 2013 (EUR 290.0 m; 46.5%). Total revenue from the EU budget (EUR 677.8 m; 56.5%) was 13.6% higher than in the same period of 2013 (EUR 596.3 m; 50.3%). At the annual level, revenue is expected to be similar to last year's (planned revenue in 2014: EUR 1,199.5 m; 2013: EUR 1,185.8 m). Payments from the state budget to the EU budget amounted to EUR 339.5 m, 85.5% of the funds appropriated in the state budget. %J a o ■Ö 01 u 31 Ö! V) Wage adjustment and changes in wage inequality during the crisis The crisis has significantly impacted the labour market, the structure and distribution of employment and wage dynamics in recent years, which has, together with the new minimum wage legislation, led to a noticeable reduction in wage inequality of employees. The economic decline in Slovenia, one of the largest in the EU in the 2008-2013 period, triggered the adjustment of the labour market to lower activity, primarily by a substantial reduction in employment.28 Wages were adjusted to a lesser degree (and unevenly), according to our estimate mainly owing to two one-off factors - the new minimum wage legislation and the reform of the wage system in the general government sector. Having been planned for several years, the reform entered into force in the middle of 2008 and - with the disbursement of the first two quarters of funds intended to eliminate wage disparities between individual occupational groups - resulted in relatively strong wage growth just in the period when private sector wages started to slow. Figure 37: Growth in minimum and average gross wages and labour productivity in private sector activities, 1995-2013 Ratio of minimum wage to average gross wage, in %, right axis -Gross wage per employee, left axis -Minimum gross wage, left axis .....Labour productivity in private sector activities, left axis 170 N cS ^^ 160 JZ 150 li 140 :> 130 E t^ 120 110 100 70 SB 60jJ E 50 ^^ (D 40 o 30 ^^ 20 10 0 Source: SURS; Ministry of Labour, Family and Social Affairs; calculations by IMAD. Note: The average wage would have risen even less during the crisis, had it not The increase in the minimum wage in 2010, a major factor hampering a faster adjustment of wages to the crisis, also had a significant impact on the narrowing of income inequality and deterioration in the cost competitiveness of the economy. As the change in legislation coincided with the crisis, the minimum wage recorded 3.9 times faster nominal growth than the average gross wage in the 2008-2013 period. The ratio between the two therefore increased significantly (from 41.1% to 51.4%), placing Slovenia to the top of the EU.29 In 2014, the growth rate of the average gross wage is expected to be higher than the rate of adjustment of the minimum wage (already carried out in January), so that the upward trend in the ratio will come to a halt and amid low inflation, the ratio is also set to fall slightly next year. In the whole period of the crisis, growth in the minimum wage also exceeded growth in labour productivity30 in private sector activities, which exerted pressure on the cost competitiveness of the economy (particularly in companies with large shares of low-skilled workers, who mainly generate products with low value added). Alongside one of the largest economic declines in the EU during the crisis, Slovenia also recorded the largest increase in the minimum wage. While in the period since the beginning of the crisis, the minimum wage in some Member States remained almost unchanged for several years, and in seven even declined in individual years, the minimum wage in Slovenia rose by almost 30% in real terms in 2008-2013. Figure 38: Adjustment of employment and wages to the crisis, private sector Gross wage per employee Number of employees who received wages -Gross wage bill ä 6 E o z -2 n i I I u 2006 2007 2008 2009 2010 2011 2012 2013 2014 Source: SURS; calculations by IMAD. Jan-Sep Although it was adjusted less to the crisis than growth in employment,31 wage growth eased and came to a complete stop in 2012 and 2013 for the first time in twenty years. In 2009, the nominal growth of the gross wage per employee more than halved as a consequence of the private sector's response to the crisis. Had it not been for 28 In the entire country as well as in the private sector and public corporations, but not in the general government sector, which was reducing the wage bill by cutting wages rather than employment during the crisis. 29 Closest to Slovenia is Luxembourg (47.7%; a higher ratio was recorded only in Greece in 2011, 50.1%, which is the latest available figure for this country); the ratio being below 32% and 35% respectively in the Czech Republic and Spain. 30 As measured by value added per employee. 31 This finding is based on the aggregate decomposition of changes in the gross wage bill, which shows that its adjustment to the crisis was mainly due a decline in the number of employees. Nevertheless, data from the Survey of wage and labour costs dynamics from 2014 show that the proportion of enterprises making wage reductions increased from 4% in 2010 to almost 8% in 2013 and was higher than in 2003-2007 (just under 3%) and higher than in the EU overall (2003-2007: 2.3%, 2008-2009: 3.2%), which indicates downward nominal wage rigidity during the crisis (Bank of Slovenia, Macroeconomic Developments and projections, September 2014, p. 25). 12 10 8 4 2 0 4 6 the wage system reform in the general government sector and changes in employment structure due to layoffs of workers with relatively low wages,32 it would have been even lower. Against the background of low economic activity, rising unemployment, low inflation and efforts made by companies to maintain competitiveness, in 2010, the adjustment of wages to the crisis was interrupted by the increase in the minimum wage,33 and, to some extent, changes in employment structure. Without these two factors, the responsiveness of wage policy to the crisis would have been significant - wage growth would have dropped by more than half in 2009-2012, by around 1.3 percentage points per year. Extraordinary and overtime payments have also been cut substantially in recent years and are much lower than before the crisis. A slight moderation was also recorded for wage growth in public corporations, which have dealt with the crisis particularly by cutting jobs. For all these reasons and as a result of austerity measures in the general government sector that have mainly been focused on the level of wages, the gross wage per employee in Slovenia practically stagnated in the last two years. Since mid-2013 it has been gradually rising again in both the private34 and public35 sector amid positive labour market movements, given that in 2014, employment started to increase for the first time since the beginning of the crisis. The wage bill of employees is, consequently, also on the rise again. Figure 39: Adjustment of employment and wages to the crisis, general government sector Gross wage per employee Number of employees who received wages -Gross wage bill o 0 2006 2007 2008 2009 2010 2011 Source: SURS; calculations by IMAD. 2012 2013 2014 Jan-Sep 32 This resulted in a purely statistical increase in the level of the average wage. According to our estimate, 0.9 percentage points of average wage growth in 2009 was due to this effect (0.6 and 0.3 percentage points, respectively, in the next two years). 33 According to our estimate, it contributed around 2.2 percentage points to the increase in the gross wage in 2010 (3.9%). The gradual increases in the minimum wage in 2011-2012 had a smaller effect on average wage growth (around 1 percentage point in both years combined, in our estimation). 34 As a result of economic recovery and improved productivity; particularly in industry, including manufacturing and some market service activities (administrative and support service activities, financial and insurance activities and distributive trades). 35 In both the general government sector (as a result of the disbursement of suspended promotions of public servants) and public corporations. The wage bill, determined by the movement of wages per employee and the number of employees, declined during the crisis in both the private and public sector, but in completely different ways. In the entire 2009-2013 period, the private sector and public corporations were adjusting to lower activity mainly by significant cuts in employment and to a lesser extent by the level of wages, while in the general government, the only factor lowering the wage bill in the last two years was the reduction of wages. Throughout the crisis, the austerity measures aimed at curbing growth in public servants' wages were namely primarily focused on limiting the level of wages rather than hiring, so that this only slowed instead of stopping or even declining as in the private sector (and public corporations). As a result of the increase in the minimum wage, stagnation or decline in wages in some activities with the highest earnings, and structural changes in employment, wage inequality -having already been roughly on a par with the EU average before the crisis - declined rapidly during the crisis. The ratio of the gross wage of the ninth decile to the gross wage of the first decile, having been falling from year to year, reached the lowest level since 1994 in 2013. Inequality has been declining in both the upper and lower parts of the distribution of employees (above and below the median). The Gini coefficient and the Robin Hood index have also been dropping, together with the share of low-wage earners.36 The ratio of the highest to the lowest average gross wages in individual activities otherwise rose slightly in the last two years, when the highest gross wages were recorded in electricity, gas and steam supply,37 but remained lower than before the crisis. Another factor narrowing the wage differences was the savings measures in the general government sector, where the average gross wage per employee was around a fifth higher than the comparable wage in the private sector, albeit mainly due to the better educational structure of employees. The proportion of Table 14: Indicators of inequality of gross wages of employees 2009 2010 2011 2012 2013 9th decile/1st decile 3,67 3,45 3,37 3,26 3,20 Median/1st decile 1,75 1,69 1,65 1,63 1,61 9th decile/median 2,10 2,05 2,04 2,00 1,98 Gini coefficient1 0,287 0,275 0,270 0,264 0,260 Robin-Hood index2 21,0 20,2 19,9 19,4 19,1 Share of employees with below-average gross wages, in % 63,2 63,4 63,5 63,2 63,1 Share of low-wage earners, in % 19,5 18,6 17,8 17,2 16,6 Ratio of the highest to the lowest gross wages in activities 2,32 2,25 2,19 2,23 2,30 Source: SURS; calculations by IMAD. Notes: 1 The Gini coefficient is a measure of (in)equality in the distribution of income and wealth. It ranges from 0 (complete equality) to 1 (complete inequality). 2 The Robin Hood index is a measure of (in)equality in the distribution of income. It is equal to the portion of income that would have to be redistributed from the richer half of the population and given to the poorer half to achieve perfect equality. 36 According to the OECD's methodology, these are full-time workers who receive less than two-thirds of median earnings, i.e. EUR 875 in 2013. 37 Previously, by financial and insurance activities (since 1991). 38 Calculation for B-S activities; excluding O. 10 C 8 Si 6 4 2 2 4 employees with below-average gross wages was stable in the whole period of the crisis, fluctuating only slightly, around 63%. The few wage inequality indicators that are internationally comparable rank Slovenia in the middle of the EU in both the interdecile ratio (2013: 3.2), which was, according to the most recent available data of the pan-European structure of earnings survey38 for 2010, the lowest in Scandinavian countries (between 2.1 and 2.4) and the highest in Romania (4.7), and in the share of low-wage earners (16.6%; EU average in 2010: 17.0%). Despite the more pronounced decline during the crisis, wage inequality remains substantially higher in the private than in the public sector. The latter is otherwise marked by higher inequality in the lower part of the distribution Figure 40: Gini coefficient, 2009-2013 -Slovenia ------Private sector -Public sector -of which: General government sector 0.29 -----of which: Public corporations 0.23 of employees (below the median, due to emergency cuts in public servants' earnings, which concentrated the number of employees in the first income bracket), in contrast to the private sector, which is characterised by significantly higher inequality in the upper part of the distribution (above the median). One tenth of the highest paid employees in the private sector thus accounted for 23.0% of the total gross wage bill and one tenth of the lowest paid for 5.4% (compared with 19.4% and 4.7%, respectively, in the public sector). In 2009, the distribution was slightly less uniform, the ratio being 24.4%:4.7% in favour of better paid employees in the private sector and 19.7%:4.4% in the public sector. Figure 42: Ratio of wages by educational attainment to average wages in 2008 and 2013 180 12008 12013 2009 2010 2011 2012 2013 Source: SURS; calculations by IM AD. Basic or less Upper secondary Higher Source: SURS; calculations by IMAD. Figure 41: Distribution of employees, private sector and public sector, 2013 25,000 20,000 , 15,000 JS 10,000 5,000 I Private sector I Public sector 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Income bracket Source: SURS; calculations by IMAD. Figure 43: Wage growth by occupational group, 20082013 Armed forces occupations Professionals Legislators, senior officials, managers Technicians and associate professionals Service and sales workers Clerical support workers Skilled agric., forestry, fishery and hunting workers Craft and related workers not elsewhere classified Plant and machine operators and assemblers Elementary occupations -18 -15 -12 -9 -6 -3 0 3 6 9 12 Real growth in gross earnings per employee, in % Source: SURS; calculations by IMAD. 160 ^ 100 P 80 60 40 20 0 Wage gaps by occupational group and educational attainment also narrowed in the analysed period. With continuous improvement in the educational structure of employees, the ratio of the average gross wage of employees with a tertiary education to the average gross wage in the country declined noticeably in the 2008-2013 period (from 62.7% to 43.4%), while the gap of low-educated employees with the average narrowed slightly, from -37.6% to -35.1%. Wages of low-educated employees rose relatively the most in the analysed period (by 16.4% in nominal terms), while wages of employees with a higher education who generally create higher value added even dropped slightly, by 1.3%. Owing to the significantly better educational structure in the general government sector (60% of employees had a tertiary education, against just 22% in the private sector), the average gross wage in the general government remained higher than in the private sector, but the gap narrowed considerably during the crisis (2013: 22.9%, 2008: 35.4%). Broken down by educational attainment, only employees with upper secondary education thus earn more than their counterparts in the private sector (2013: 2.7%), while low-skilled employees and employees with a higher education are paid less, on average (-10.8% and -7.5%, respectively). Similar changes were recorded for the wage movement by occupational group, with earnings in elementary occupations having risen at an above-average rate, while wages particularly in occupations which require a higher education (professionals, senior officials, managers, legislators, associate professionals) declined in real terms. The average unemployment outflow rate declined substantially during the crisis. Having been gradually rising before the crisis to reach its high at the end of 2008, the rate had halved by the beginning of 2013, given the surge in unemployment and a decline in vacancies and hence job prospects as a result of the contraction of economic activity. Since the first quarter of 2013, the rate has again been rising, consistent with a slight improvement on the labour market, but remains lower than before the crisis. Figure 44: Unemployment outflow rate by duration of unemployment in Slovenia ■ Less than 3 months - Between 6 and 12 months - Group average ----Between 3 and 6 months —1—Between 12 and 48 months oaoaaaaa Source: Eurostat; calculations by IMAD. Unemployment outflow rate39 The employment prospects of an unemployed person can be measured by the unemployment outflow rate.40 During the economic crisis, the number of unemployed persons surged while their job-finding probability diminished due to the fall in demand. The unemployment outflow rate, calculated on the basis of the monthly probability that an unemployed person will find a job, is expressed as a share of overall unemployment. The calculation is carried out using aggregate data on the number of unemployed persons with regard to the duration of unemployment acquired by the labour force survey. The rate is internationally comparable and serves as an indirect measure of the outflows from unemployment, which are an important indicator of the dynamics and the situation on the labour market. 39 Also called the job-finding rate. 40 The unemployment outflow rate, based on the so-called survival analysis methodology, is defined as the monthly hazard rate of moving from unemployment to employment in the next x months. The methodology, developed by R. Shimer (The Cyclical Behavior of Equilibrium Unemployment and Vacancies. American Economic Review, No. 95, 2005) and refined by M. Elsby et al (Unemployment Dynamics in the OECD, Federal Reserve Bank of San Francisco Working Paper 2009-04, 2011), is based on three strong assumptions: i) workers neither enter nor exit the labour force but simply transit between employment and unemployment; ii) all workers Figure 45: Unemployment outflow rate in Slovenia and the EU-27 for unemployment duration of up to 24 months -Slovenia -EU27 ra 8 SD 7 5 a a a a a a Source: Eurostat; calculations by IMAD. are ex ante identical, which means that all unemployed workers have the same job-finding probability regardless of their characteristics (the rate thus refers to the average representative unemployed person; iii) the rate is constant within the quarter. 10 9 4 3 During the crisis, the unemployment outflow rate by duration declined across all groups of the unemployed, albeit relatively more for the short-term unemployed. This is mainly related to the developments at the onset of the crisis when short-term unemployment rose more notably41 due to increased firing and limited hiring. The unemployment outflow rate for the long-term unemployed42 was nevertheless lower than for the short-term unemployed throughout the analysed period, mostly as the long-term unemployed find it harder to get a job because of a loss of motivation to seek work, skills erosion and a stigma attached to long-term employment. The differences in the rates by unemployment duration also narrowed substantially, which may indicate that the lower employment prospects were a consequence of low demand for labour rather than structural factors.43 The further falling of the rate for the long-term unemployed - after the corresponding rate for the short-term unemployed has started slowly to rise in the past year -nevertheless arouses concern that part of unemployment has become structural amid the protracted period of weak labour demand. The decline in the unemployment outflow rate in Slovenia was stronger than in the EU overall. After equalling the EU average in 2008, the Slovenian unemployment outflow rate fell more strongly mainly owing to an above-average employment adjustment by enterprises amid a larger decline in economic activity than in EU Member States. That it was also lower at the beginning of this year is also due to a larger increase in the share of the long-term unemployed in total unemployment than in the EU. The Doing Business 2015 report by the World Bank44 Slovenia's ranking as measured by the World Bank's Doing Business 2015 indicators deteriorated. Among the 189 countries surveyed, Singapore, New Zealand and Hong Kong top the scale, while Denmark is the best-performing country in the EU. This year's report ranks Slovenia 51s' among all countries (five places lower than last year) and 21s' among the EU Member States (two places lower than in 2014). The decline in the total ranking was not due to the deterioration in the quality of regulatory environment, as the distance to frontier score increased 41 This is also one of the reasons for the decline in the average unemployment outflow rate, the other being an increasing share of the long-term unemployed in overall unemployment, as the long-term unemployed decrease the average unemployment rate owing to lower chances of employment. 42 Those unemployed for more than 12 months. 43 In the case of structural factors, the unemployment outflow rate would have fallen particularly for the long-term unemployed. 44 As in previous years, the methodology of the ranking calculation was changed again in the latest report, so that the countries' ranks are not directly comparable with those for previous years. They can only be compared with results for the preceding year, which were re-calculated by the methodology for the current year. To assess the countries' progress over time, the World Bank regularly releases distance to frontier scores, which slightly, but to the fact that some other, particularly less developed, countries (Columbia, Armenia, Rwanda) made much greater progress than Slovenia in the same period. Among the comparable countries, Slovenia was surpassed by the Czech Republic and Romania. Despite last year's deterioration, the distance to frontier score45 shows that Slovenia has significantly narrowed its gap with the top-ranking countries in the last ten years, mainly as a result of measures that made it easier and faster to start a business and register real estate. The main factor preventing faster progress in the past years has been access to funding. The survey finds that one major reform was carried out in the last year46 to make it easier to do business in Slovenia. Slovenia adopted changes to insolvency legislation,47 which sped up the bankruptcy proceedings to prevent attrition of insolvent debtors. The change has not yet been reflected in Slovenia's rank,48 given that insolvency procedures still take long and that creditors recover only around 50% of debts, which is much less than on average in the OECD. Nevertheless, the amendment simplified debt-equity swaps and allowed new equity holders to take over management of the debtor to ensure continuation of the business. Figure 46: Comparison between Slovenia and the OECD on the Doing Business scale -Slovenia DB 2015 -OECD DB 2015 Starting a business 109,-1 Resolving insolvency Getting electricity etting credit Source:Doing Business. enable year-to-year comparison with the best-performing countries. For more information see http://www.doingbusiness.org/. 45 The main methodological change was in the calculation of indicator values, as the ranking is now based on the distance to frontier score (i.e. the gap between a country's performance and the performance of the topranking country). 46 The survey was conducted in the first half of this year using data available by June 2014. 47 Act Amending the Financial Operations, Insolvency Proceedings and Compulsory Dissolution Act. 48 The ranking deteriorated by three places to 42nd, while the distance to frontier data improved somewhat. Table 15: Slovenia's ranking on the Doing Business scale Rank 2013 (DB 2014) Rank2014 (DB 2015) Change 2014/2013 Ease of doing business 46 51 -5 Starting a business 14 15 -1 Dealing with construction permits 92 90 +2 Registering property 90 90 0 Getting electricity 31 31 0 Getting credit 111 116 -5 Protecting investors 13 14 -1 Paying taxes 40 42 -2 Trading across borders 52 53 -1 Enforcing contracts 122 122 0 Resolving insolvency 39 42 -3 Source: Doing Business, World Bank , 2014. Note: The survey included 189 countries. Because of methodological changes, this year's rankings can only be compared with last year's. Table 16: Duration of procedure in Slovenia in comparison with OECD countries in 2014 Slovenija OECD Starting a business (days) 6 9.2 Dealing with construction permits (days) 109.5 24 Registering property (days) 90 90 Getting electricity (days) 38 76.8 Paying taxes (hours per year) 260 175.4 Trading across borders - exports (days) 16 10.5 Trading across borders - imports (days) 14 9.6 Enforcing contracts (days) 1,270 539.5 Resolving insolvency (years) 2.0 1.7 Source: Doing Business, World Bank , 2014. In the last year, Slovenia's position deteriorated in six areas, improved only in one and remained unchanged in three.49 Although Slovenia declined in several areas, the distance to frontier scores remained the same or improved slightly in most areas. Slovenia ranks highest on protecting minority investors50 (14'h), starting a business (15'h) where its distance to frontier score is closest to those of the best-performing countries (94.39%), and getting electricity (31s'). Similar to previous years, it ranks worst on the ease of enforcing contracts (122nd), where it has not made much progress in the past few years. The World Bank report finds that enforcement proceedings are less costly than on average in the OECD but take much longer. Slovenia also scores low in the area of getting credit, where its ranking declined again (by five places to 116'h). This is a result of deficiencies in the existing legislation 49 The ease on doing business index captures 10 areas, i.e. starting a business, dealing with construction permits, registering property, getting electricity, getting credit, protecting investors, paying taxes, trading across borders, enforcing contracts and resolving insolvency. 50 In contrast to the World Bank, the IMD places Slovenia very low precisely on the indicator of minority shareholder protection, the main difference being that the IMD rankings are based on a survey questionnaire, which is also influenced by managers' confidence. and a lack of good credit information system for users, which also affects the availability and costs of loans for Slovenian enterprises. This is also the area where Slovenia has the highest distance to frontier score (35.0%). The World Bank report provides a good assessment of a country's strengths and weaknesses in comparison with other countries. Slovenia has a wide gap with developed countries (the EU, OECD averages) in three areas, getting credit, enforcing contracts and resolving insolvency. Lengthy procedures appear to represent a significant barrier to doing business in Slovenia. The most time-consuming procedures are related to public services (obtaining the necessary permits from the administration units and registering construction projects in official records, lengthy contract enforcement procedures), the procedures to resolve private/commercial disputes being much shorter. Excessive macroeconomic imbalances in the EU An important feature of the EU's economic governance is the emphasis on the early detection and correction of excessive imbalances, particularly within the euro area. The alert mechanism for detecting potential imbalances at an early stage consists of a set of ten indicators with corresponding indicative thresholds, the crossing of which may be a sign of serious external or internal imbalance. To identify imbalances, the Commission also takes into account other macroeconomic data51 and the in-depth review for the Member State concerned, which explain individual movements or imbalances in more detail. If serious imbalances52 are found, an excessive imbalance procedure is initiated that may include issuing of recommendations to the Member State and requirements with regard to enhanced surveillance and monitoring. In the event that a Member State53 fails to take corrective action, it may be imposed financial sanctions reaching up to 0.1% of GDP. In November, the European Commission prepared a new overview of excessive imbalances, noting that the correction of imbalances (AMR 201554), external imbalances in particular, is underway in all EU Member States. Several countries have improved competitiveness, but some internal macroeconomic imbalances (private sector indebtedness, high general government debt) remain significant and have serious social implications. In the past year, a more visible reduction of imbalances and macroeconomic risks has been impeded by slow economic growth and low inflation. The greatest imbalances were again recorded for countries with the 51 A number of employment and social indicators have also being introduced into the excessive imbalances procedure to gain a better understanding of the labour market and social developments and risks. 52 Regulation (EU) No. 1176/2011 of the European Parliament and of the Council of 16 November 2011 on the prevention and correction of macroeconomic imbalances. 5 This applies only to the Member States that are in the euro area. 54 Alert Mechanism Report 2015, November 2014. Table 17: Indicators of macroeconomic imbalances for EU Member States for 2013 (AMR, 2015) External imbalances Internal imbalances e un a ^^ iS iS ^ iE ^ . O^Q ^ iE «I 1» «1 ^ JS ^ ^^ -iS -year5 oexpn haers (ser ^ e t git ^ J^ ^ ■^(0 «J (OO-O rn ^ ro 3 no ha hs yin ^ ^ IL n a. ^ a otrf G tec of CL ^ e d deD ^ iE eov as g o in s S, ^ ^^ Thresholds +6/-4 % -35 % +-5/+-11 -6 % +9 %/12 % +6 % 15 % 160 % 60 % 10 % 16,5 % BE -1.6 48.8 -0.3 -9.1 8.6 0.0 1.1 163.0 104.5 7.7 -2.4 BG 0.4 -76.2 -1.0 5.7 14.8p -0.1 6.4 134.8 18.3 12.2 3.3 CZ -1.7 -40.1 -3.2 -7.7 3.7 -1.2 3.1p 73.7p 45.7 6.9 9.8p DK 6.1 39.7 -2.6 -17.9 4.0 2.8 -1.4 222.6 45.1 7.4 -0.1 DE 6.7 42.9 -1.9 -10.7 6.4 1.8p 1.2p 103.5p 76.9 5.5 -6.3 EE -1.2 -47.1 3.1 14.0 9.6 7.3 5.4 119.4 10.1 10.3 8.9 IE 1.1 -104.9 -3.9 -4.9 1.3 0.3 -5.7 266.3 123.3 14.2 1.0 EL -3.9 -121.1 -4.5 -27.3 -10.3p -9.3p -1.1 135.6 174.9 23.3 -16.3 ES -0.7 -92.6 -0.4 -7.1 -4.6p -9.9 -10.7 172.2 92.1 24.1 -10.2 FR -1.3 -15.6 -2.3 -13.0 3.9 -2.6 1.8 137.3 92.2 9.8 -0.6 HR -0.1 -88.7 -4.0 -20.9 0.9 -18.1p -0.5 117.6 75.7 15.8 3.4 IT -0.9 -30.7 0.0 -18.4 4.1 -6.9p -3.0 118.8 127.9 10.4 -0.7 CY -4 -156.8 -0.8 -27.2 -5.9p -5.5 -11.2 344.8 102.2 11.9 -19.5 LV -2.8 -65.1 -1.7 8.4 10.5 6.6 0.8 90.9 38.2 14.4 5.2 LT -1.2 -46.4 -0.7 22.1 6.0 0.2 -0.2 56.4 39.0 13.5 -1.8 LU 5.5 216.4 0.7 2.2 10.5 4.9 27.7 356.2 23.6 5.3 8.8 HU 2.2 -84.4 -4.0 -19.2 5.9 -5.0 -1.0 95.5 77.3 10.7 -0.3 MT 4 49.2 -1.3 0.8 9.5 -2.1 0.4 137.1 69.8 6.4 0.7 NL 9.8 31.1 0.4 -9.5 6.3p -7.8 2.1p 229.7p 68.6 5.5 -3.2 AT 1.4 -0.2 0.7 -17.0 6.4 2.5p 0.2 125.5 81.2 4.5 -3.6 PL -3.3 -68 -4.4 2.1 3.9p -4.4p 2.9 74.9 55.7 10.0 7.6 PT -2.5 -116.2 -0.6 -5.3 -3p -2.5 -2.4 202.8 128.0 15.0 -5.3 RO -3.3 -62.4 0.3 16.4 0.7p -4.6p -1.5 66.4 37.9 7.0 3.1 SI 2.8 -38.2 -0.7 -16.6 1.3 -5.8 -4.0 101.9 70.4 9.1 -10.5 SK 0.2 -65.1 2.0 -2.2 2.5 -0.5 5.4 74.8 54.6 14.0 -0.3 FI -1.7 8.8 0.1 -32.2 9.5 -1.3 0.7 146.6 56.0 7.9 -11.8 SE 6.1 -10.8 5.1 -15.0 8.3 4.7 3.7 201.1 38.6 7.9 9.1 UK -3.2 -15.6 3.4 -11.7 3.8 1.6 3.4p 164.5p 87.2 7.9 -7.4 Source: European Commission. Note: The fields in grey indicate values above the indicative thresholds in the macroeconomic imbalances procedure at EU level; p - provisional data; the first values in the real effective exchange rate and unit labour costs columns apply to euro area countries. largest fiscal problems. By spring 2015 the Commission will prepare in-depth reviews for 16 EU Member States,55 fewer than this year. On the basis of the indicators and the in-depth review by the Commission, Slovenia was identified as one of the countries with excessive macroeconomic imbalances. The results of the set of indicators have shown imbalances in the competitiveness of the economy and the financial exposure to the rest of the world in the whole period since 55 Belgium, Bulgaria, Germany, Ireland, Spain, France, Croatia, Italy, Hungary, Netherlands, Portugal, Romania, Slovenia, Finland, Sweden and the United Kingdom. Greece and Cyprus are not covered by the macroeconomic imbalances procedure, as they are subject to surveillance under other programmes. the beginning of the crisis. Although the negative net international investment position and the market share started to improve in 2013, most of the indicators still indicated the existence of macroeconomic imbalances, which was also corroborated by the in-depth review made by the Commission in spring 2013. This pointed to the problem of high corporate sector indebtedness, particularly in light of the negative feedback loop of high corporate debts, weak activity, bank instability and increasing general government debt. Slovenia was given eight recommendations this year,56 which otherwise recognise progress made in implementing 56 For more on the recommendations to Slovenia see http://ec.europa.eu/ europe2020/pdf/csr2014/csr2014_slovenia_sl.pdf the commitments from the previous year (such as repairing the banks' balance sheets). However, the key issues remain a durable correction of fiscal imbalances and a further implementation of privatisation and the remaining structural reforms to improve competitiveness. Slovenia should also take effective measures to fight corruption, which is a new recommendation for Slovenia. In November, the Commission announced that Slovenia was still facing the risk of excessive imbalances (crossing the indicative thresholds in three indicators of the alert mechanism for the early detection of imbalances, and -for the first time - the thresholds in general government debt). The in-depth review will be made in spring 2015: the Commission will examine the implementation of recommendations and assess if Slovenia still belongs to the group of the countries with excessive imbalances. X "ö C O a a (O "iS u (O (O MAIN INDICATORS 2009 2010 2011 2012 2013 2014 2015 2016 Autumn forecast 2014 GDP (real growth rates, in %) -7.8 1.2 0.6 -2.6 -1.0 2.0 1.6 1.6 GDP in EUR million (current prices) 36,166 36,220 36,868 36,006 36,144 36,931 37,755 38,789 GDP per capita, in EUR (current prices) 17,714 17,678 17,960 17,506 17,550 17,899 18,277 18,761 GDP per capita (PPS)1 20,200 20,600 21,200 21,400 21,300 GDP per capita (PPS EU27=100)1 86.2 84.2 84.3 83.7 82.7 Gross national income (current prices and current fixed exchange rate) 35,673 35,868 36,558 35,737 35,877 36,266 37,240 38,256 Gross national disposable income (current prices and current fixed exchange rate) 35,350 35,725 36,473 35,509 35,702 36,053 37,009 37,927 Rate of registered unemployment 9.1 10.7 11.8 12.0 13.1 13.1 13.0 12.7 Standardised rate of unemployment (ILO) 5.9 7.3 8.2 8.9 10.1 10.0 9.9 9.4 Labour productivity (GDP per employee) -6.1 3.5 2.2 -1.8 0.5 1.4 1.2 1.1 Inflation,2 year average 0.9 1.8 1.8 2.6 1.8 0.3 0.6 1.2 Inflation,2 end of the year 1.8 1.9 2.0 2.7 0.7 0.6 1.1 1.3 INTERNATIONAL TRADE - BALANCE OF PAYMENTS STATISTICS Exports of goods and services3 (real growth rates, in %) -16.6 10.1 7.0 0.3 2.6 3.7 4.3 4.9 Exports of goods -17.0 11.9 8.2 0.0 2.8 4.3 4.8 5.1 Exports of services -14.8 3.4 2.5 1.5 1.8 1.2 2.5 4.2 Imports of goods and services3 (real growth rates, in %) -18.8 6.6 5.0 -3.9 1.4 3.1 4.2 4.5 Imports of goods -19.8 7.4 6.0 -4.6 2.2 2.2 4.3 4.5 Imports of services -12.8 2.5 -0.4 0.2 -3.1 9.0 3.7 4.3 Current account balance, in EUR million -173 -50 146 1,026 2,101 2,024 2,128 2,221 As a per cent share relative to GDP -0.5 -0.1 0.4 2.8 5.8 5.5 5.6 5.7 Gross external debt, in EUR million 40,318 40,723 40,100 41,264 39,930 43.995* As a per cent share relative to GDP 111.5 112.4 108.8 114.6 110.5 Ratio of USD to EUR 1.393 1.327 1.392 1.286 1.328 1.353 1.332 1.332 DOMESTIC DEMAND - NATIONAL ACCOUNTS STATISTICS Private consumption (real growth rates, in %) 0.9 1.0 -0.1 -3.0 -3.9 0.5 1.3 1.8 As a % of GDP4 54.7 55.9 55.8 56.2 54.1 53.2 52.9 52.9 Government consumption (real growth rates, in %) 2.4 0.1 -1.3 -1.5 -1.1 -0.4 -1.0 -1.1 As a % of GDP4 20.1 20.4 20.5 20.5 20.4 19.3 18.9 18.4 Gross fixed capital formation (real growth rates, in %) -22.0 -13.7 -4.6 -8.9 1.9 4.5 2.5 0.5 As a % of GDP4 24.3 21.2 20.2 19.2 19.7 20.3 20.6 20.5 Sources of data: SURS, BS, Eurostat, calculations and forecasts by IMAD (Autumn Forecast, September 2014). Notes: 1Measured in purchasing power standard. 2Consumer price index. 3Balance of payments statistics (exports F.O.B., imports F.O.B.); real growth rates are adjusted for inter currency changes and changes in prices on foreign markets. 4Shares GDP are calculated for GDP in current prices at fixed exchange rate (EUR=239.64). 5End September 2014. PRODUCTION 2011 2012 2013 2012 2013 2014 2012 2013 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 10 11 12 1 INDUSTRIAL PRODUCTION, y-o-y growth rates, % Industry B+C+D 1.3 -1.1 -0.9 -0.4 -2.3 -2.6 -1.7 -1.1 1.6 2.5 4.6 5.7 5.2 -4.9 -7.5 -0.1 B Mining and quarrying -7.9 -7.4 1.3 -3.5 -13.3 6.7 -9.6 16.8 -2.4 33.9 -11.2 1.2 -17.9 -24.9 -11.6 C Manufacturing 1.1 -2.3 -1.5 -2.1 -3.1 -3.9 -2.0 -1.4 1.2 3.0 3.2 5.2 4.7 -5.5 -9.1 -1.3 D Electricity, gas & steam supply1 5.0 10.5 3.9 16.1 6.1 7.0 1.9 3.2 3.1 0.1 13.6 13.3 11.8 2.3 4.9 11.3 CONSTRUCTION,2 real indices of construction put in place, y-o-y growth rates, % Construction, total -24.8 -16.8 -2.5 -13.2 -21.6 -24.5 -10.5 -3.4 22.8 36.8 39.8 19.3 -22.5 -26.1 -14.8 -23.2 Buildings -39.7 -17.3 -20.4 -18.1 -30.0 -40.9 -25.1 -16.6 5.1 6.7 5.9 8.0 -34.6 -19.4 -35.4 -38.2 Civil engineering -15.3 -16.6 6.3 -10.1 -16.2 -8.5 -2.6 1.7 27.1 52.5 55.7 24.5 -15.0 -27.2 -2.1 -8.6 TRANSPORT, tonne-km in m, y-o-y growth rates, % Tonne-km in road transport 3.2 -3.4 0.1 -5.9 -7.8 -2.9 -1.8 3.9 1.8 -9.5 2.2 Tonne-km in rail transport 9.7 -7.5 9.5 -5.8 -7.5 -0.1 0.4 13.4 24.9 13.0 15.7 Distributive trades, y-o-y growth rates, % Total real turnover* 3.3 -3.6 -1.0 -4.9 -5.6 -7.1 2.1 -2.2 3.2 2.4 -1.1 5.9 -3.4 -5.4 -7.9 -4.9 Real turnover in retail trade 1.5 -2.2 -3.7 -2.7 -5.8 -7.0 -2.6 -4.6 -0.7 -0.7 -0.8 2.7 -4.1 -5.8 -7.4 -4.4 Real turnover in the sale and maintenance of motor vehicles 7.0 -6.3 4.7 -10.1 -5.3 -7.2 11.1 3.4 11.6 8.6 -1.7 12.7 -2.1 -4.5 -9.2 -5.7 Nominal turnover in wholesale trade & commission trade 6.0 0.8 -0.2 1.4 -1.3 -5.1 1.1 -1.4 4.7 6.2 3.1 6.4 4.9 -2.1 -6.5 1.6 TOURISM, y-o-y growth rates, %, new methodology from 2009 onwards Total, overnight stays 5.3 1.2 0.3 1.2 1.9 -3.4 -1.5 2.9 0.6 -2.0 -14.0 -3.4 -3.5 9.3 2.2 -10.5 Domestic tourists, overnight stays 0.5 -4.9 -3.4 -7.5 -5.2 -6.1 -5.3 -2.4 0.5 -3.4 -8.1 -7.7 -6.6 -8.1 -0.7 -10.0 Foreign tourists, overnight stays 9.1 5.6 2.8 6.3 8.1 -0.6 0.9 5.6 0.7 -0.6 -17.4 -1.4 -1.3 28.2 4.9 -10.8 Nominal turnover market services (without distributive trades) 3.7 -1.1 -1.4 -0.4 -3.7 -6.1 -3.0 0.5 2.9 2.8 3.4 1.5 -4.2 -0.3 -6.6 -7.4 AGRICULTURE, y-o-y growth rates, % Purchase of agricultural products, SIT bn, since 2007 in EUR m 478.9 480.4 478.4 128.4 134.5 104.4 111.1 123.2 139.6 113.6 122.8 132.5 47.1 41.0 46.3 33.9 BUSSINES TENDENCY (indicator values**) Sentiment indicator -7 -17 -13 -19 -20 -15 -14 -13 -12 -8 -2 0 -22 -20 -17 -16 Confidence indicator - in manufacturing -1 -11 -5 -15 -13 -9 -6 -4 -3 -1 3 3 -15 -14 -10 -11 - in construction -46 -41 -22 -40 -38 -30 -23 -18 -17 -14 -9 -10 -42 -39 -34 -30 - in services 1 -12 -12 -14 -17 -12 -12 -11 -11 -4 7 7 -19 -19 -14 -13 - in retail trade 8 2 2 2 -4 -3 2 7 1 5 8 8 -7 -6 0 2 Consumer confidence indicator -25 -35 -33 -39 -37 -29 -34 -34 -35 -29 -25 -18 -39 -37 -34 -30 Source of data: SURS. Note: 1Only companies with activity of electricity supply are included. 2The survey covers all larger construction enterprises and some other enterprises that perform construction work. *Total real turnover in retail trade, the sale and repair of motor wehicles, and retail sale of automotive fuels. **Seasonally adjusted data. 2013 2014 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 -0.7 -6.5 2.8 -2.5 -5.1 1.2 -5.7 0.8 -1.6 -0.4 8.0 1.6 0.3 5.5 3.2 2.3 8.5 7.9 1.3 7.2 - 9.9 23.2 -4.0 -11.0 -13.7 2.4 -1.1 -21.7 -8.0 6.0 74.1 31.1 -0.3 -30.0 73.1 17.9 9.2 -20.3 -27.4 19.0 -0.9 -8.7 2.5 -2.7 -5.5 1.1 -6.7 0.6 -2.2 -0.4 7.7 2.0 0.5 6.1 1.2 0.2 8.3 7.0 1.5 6.2 0.0 10.2 6.1 0.7 -0.9 1.9 1.7 6.2 5.1 -1.3 5.5 -4.8 -0.9 6.3 12.6 19.2 9.3 20.4 5.1 14.5 - -14.0 -31.7 -18.7 -11.6 -2.0 1.8 -5.3 -5.9 28.2 31.4 6.8 34.5 28.8 44.6 47.2 45.0 29.9 27.1 27.4 6.2 -28.0 -50.1 -36.2 -24.2 -14.1 -19.1 -19.6 -11.4 10.8 3.1 0.8 6.2 4.7 8.5 9.8 11.3 -1.9 13.6 15.8 -3.8 -0.6 -13.6 -6.3 -5.9 3.5 11.0 2.2 -5.5 31.8 41.5 6.3 49.1 41.1 63.0 65.1 60.3 44.6 33.2 32.4 10.7 - - - - - - - - - - -8.6 -7.7 2.7 1.2 2.5 -4.3 -3.4 1.4 2.2 2.7 4.8 2.2 1.9 3.2 2.5 -3.1 -2.7 8.6 1.3 8.1 - -9.4 -7.2 -1.8 -2.0 -4.0 -5.2 -4.6 -3.9 -0.9 -1.4 0.1 -1.1 -0.6 -0.5 3.3 -2.9 -2.5 3.5 -0.5 5.3 -7.4 -8.5 11.3 6.8 15.4 -2.7 -0.2 14.0 8.4 10.4 16.3 8.8 6.9 10.1 1.5 -3.4 -3.0 19.4 5.7 13.4 -5.6 -10.9 5.8 -0.9 -1.3 0.7 -4.6 -0.2 2.3 1.8 10.2 5.1 5.2 8.3 6.0 0.0 3.4 6.4 2.2 10.7 0.2 0.6 -11.6 9.2 -2.4 3.4 2.2 3.2 4.0 -3.2 0.1 -0.4 -3.4 -2.1 7.8 -2.9 4.8 -5.1 -1.3 -4.7 - -1.3 -8.2 -6.0 2.0 -10.0 0.7 -4.6 -3.5 4.3 -2.3 -0.9 -6.9 -5.7 2.4 -3.6 1.0 -1.3 -7.7 -8.7 -5.8 2.5 9.3 -15.0 13.3 2.6 4.8 5.8 6.4 3.8 -4.0 1.1 4.3 -0.2 -5.8 15.5 -4.9 8.3 -3.8 2.1 -4.2 -3.5 -7.3 -2.7 -3.1 -3.3 0.9 -0.6 1.3 3.9 0.7 4.1 1.4 2.0 5.1 4.3 2.8 3.2 0.9 5.0 -1.2 32.2 38.4 37.5 38.7 34.9 45.1 37.1 41.0 49.3 41.7 48.5 38.4 36.0 39.2 42.6 39.4 40.7 48.0 38.8 45.7 - - -15 -13 -14 -15 -13 -14 -12 -12 -13 -11 -12 -9 -9 -6 -5 0 0 1 -2 0 2 0 -8 -8 -9 -5 -4 -5 -3 -4 -5 -2 -1 -3 0 1 1 3 6 7 2 1 2 1 -30 -31 -25 -22 -21 -23 -15 -16 -17 -16 -19 -16 -17 -9 -15 -4 -7 -7 -11 -11 -9 -13 -13 -11 -9 -14 -14 -11 -9 -13 -13 -10 -11 -5 -6 -2 4 10 7 8 7 7 10 10 -9 -2 -5 -7 17 15 1 4 13 -8 -3 9 2 3 3 17 3 12 5 7 14 19 -31 -26 -26 -38 -38 -38 -33 -32 -36 -35 -33 -30 -30 -27 -29 -25 -22 -19 -21 -15 -12 -20 LABOUR MARKET 2011 2012 2013 2012 2013 2014 2012 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 10 11 12 FORMAL LABOUR FORCE (A=B+E) 934.7 920.2 913.4 915.2 915.2 912.9 913.8 910.5 916.5 912.9 919.8 917.5 918.0 916.5 911.0 PERSONS IN FORMAL EMPLOYMENT (B=C+D)' 824.0 810.0 793.6 809.1 801.7 789.2 795.0 794.4 795.8 784.2 799.6 803.0 807.1 805.0 792.9 In agriculture, forestry, fishing 38.8 37.0 38.2 37.4 37.4 37.4 38.9 38.1 38.4 31.7 37.1 37.5 37.5 37.4 37.4 In industry, construction 272.9 263.1 252.2 263.1 257.5 249.9 252.5 253.5 252.9 249.0 252.9 254.1 261.1 259.5 251.9 Of which: in manufacturing 184.8 182.9 177.7 182.5 180.4 177.8 177.6 177.5 177.8 177.3 178.2 178.6 181.8 181.2 178.4 in construction 67.8 59.8 54.3 60.1 56.9 52.0 54.6 55.7 54.6 51.5 54.6 55.4 59.0 58.1 53.5 In services 512.3 510.0 503.2 508.6 506.8 502.0 503.6 502.8 504.6 503.5 509.7 511.4 508.5 508.1 503.7 Of which: in public administration 51.4 50.7 49.1 50.8 50.0 49.3 49.3 49.1 48.9 48.7 49.0 49.0 50.2 50.2 49.6 in education, health-services, social work 118.8 120.9 121.0 120.3 121.0 120.7 121.1 120.5 121.6 121.6 122.4 121.6 121.1 121.3 120.6 FORMALLY EMPLOYED (C)1 729.1 717.0 698.7 716.2 708.4 696.1 700.0 699.6 699.2 693.8 703.5 706.1 713.7 711.6 699.9 In enterprises and organisations 671.8 662.6 647.6 661.4 655.1 645.8 648.5 647.9 648.1 645.2 653.1 654.7 659.2 657.7 648.3 By those self-employed 57.2 54.5 51.1 54.8 53.3 50.2 51.5 51.7 51.1 48.6 50.4 51.3 54.5 53.9 51.6 SELF-EMPLOYED AND FARMERS (D) 94.9 93.0 94.9 92.9 93.3 93.1 95.0 94.7 96.6 90.4 96.1 97.0 93.4 93.4 93.1 REGISTERED UNEMPLOYMENT (E) 110.7 110.2 119.8 106.1 113.5 123.7 118.8 116.1 120.7 128.8 120.2 114.5 110.9 111.5 118.1 Female 52.1 52.2 57.4 50.9 53.8 57.0 56.7 57.0 58.9 61.2 59.4 58.4 53.3 53.3 54.9 By age: 15 to 29 26.6 24.9 28.8 22.5 27.7 29.2 27.7 26.7 31.6 33.6 30.5 27.4 27.6 27.5 27.9 aged over 50 39.0 38.2 38.9 37.4 38.1 40.7 39.3 38.1 37.3 39.0 37.7 36.4 37.0 37.1 40.2 Osnovnošolska izobrazba ali manj 34.1 33.3 34.2 31.8 33.2 36.5 34.1 32.6 33.6 36.4 33.8 32.1 32.2 32.5 35.0 For more than 1 year 50.2 55.2 55.4 54.5 53.9 54.4 54.3 55.0 57.7 60.7 59.9 59.2 54.3 53.6 53.8 Those receiving benefits 36.3 33.9 33.0 31.5 33.0 39.3 33.7 30.3 28.7 32.7 26.2 23.9 31.5 31.9 35.6 RATE OF REGISTERED UNEMPLOYMENT, E/A, in % 11.8 12.0 13.1 11.6 12.4 13.5 13.0 12.8 13.2 14.1 13.1 12.5 12.1 12.2 13.0 Male 11.4 11.5 12.5 11.0 11.9 13.4 12.5 11.9 12.4 13.5 12.1 11.1 11.4 11.6 12.7 Female 12.4 12.6 13.8 12.3 13.0 13.8 13.7 13.8 14.1 14.8 14.2 14.1 12.9 12.9 13.3 FLOWS OF FORMAL LABOUR FORCE 2.7 5.3 6.0 -0.2 12.6 4.6 -6.0 -1.9 9.3 2.7 -9.4 -4.8 5.4 0.6 6.6 New unemployed first-job seekers 14.4 16.3 19.1 3.0 9.0 3.7 2.6 3.4 9.4 4.2 2.7 3.3 6.3 1.8 0.9 Redundancies 82.2 90.3 88.7 20.9 28.9 27.1 18.5 19.6 23.5 25.9 17.3 17.7 8.4 8.2 12.2 Registered unemployed who found employment 61.0 58.3 65.1 13.5 13.5 17.2 18.1 15.8 14.1 20.7 20.5 15.9 4.9 5.1 3.4 Other outflows from unemployment (net) 32.8 43.1 37.3 10.7 11.8 9.2 9.1 9.2 9.9 6.8 8.8 9.9 4.3 4.3 3.2 WORK PERMITS FOR FOREIGNERS 35.6 33.9 30.5 33.9 33.2 32.6 31.7 29.8 27.8 26.3 25.7 24.8 33.6 33.3 32.7 As % of labour force 3.8 3.7 3.3 3.7 3.6 3.6 3.5 3.3 3.0 2.9 2.8 2.7 3.7 3.6 3.6 Source of data: SURS, PDII, ESS. Note: 1In January 2005, the SORS adopted new methodology of obtaining data on persons in paid employment. The new source of data for employed and self-employed persons excluding farmers is the Statistical Register of Employment (SRE), while data on farmers are forecast using the ARIMA model based on quarterly Figure for farmers from the Labour Force Survey. 2013 2014 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 913.0 912.9 912.7 914.3 914.0 913.1 911.5 909.8 910.2 916.7 917.5 915.3 911.4 913.0 914.4 920.2 919.8 919.4 918.0 916.5 918.1 788.7 788.9 790.1 793.0 795.4 796.5 794.4 793.2 795.5 798.0 798.2 791.3 781.6 783.3 787.7 796.6 800.1 802.1 801.8 801.7 805.5 37.5 37.3 37.4 38.7 39.0 39.1 38.1 38.1 38.1 38.5 38.4 38.4 31.6 31.7 32.0 36.8 37.0 37.3 37.5 37.5 37.6 249.8 249.5 250.3 251.6 252.6 253.1 253.4 253.1 254.0 254.8 254.6 249.3 248.3 248.5 250.0 252.0 253.3 253.4 253.9 253.7 254.7 177.8 177.8 177.9 177.5 177.7 177.7 177.6 177.3 177.6 178.1 178.3 177.0 177.1 177.4 177.5 178.1 178.4 178.1 178.4 178.5 179.0 52.0 51.8 52.4 54.0 54.8 55.2 55.5 55.5 56.0 56.1 55.8 52.0 51.1 50.7 52.6 53.9 54.8 55.0 55.4 55.1 55.7 501.4 502.1 502.4 502.6 503.8 504.3 502.9 502.0 503.4 504.7 505.3 503.7 501.7 503.1 505.7 507.8 509.7 511.4 510.4 510.5 513.2 49.2 49.4 49.2 49.3 49.3 49.4 49.1 49.2 48.9 48.8 49.0 48.9 48.6 48.7 48.9 48.9 49.0 49.1 49.1 48.9 48.9 120.4 120.8 121.0 120.9 121.2 121.3 120.3 120.0 121.2 121.6 121.8 121.3 121.1 121.7 122.1 122.3 122.5 122.5 121.3 121.1 122.4 695.5 695.8 696.9 698.2 700.3 701.5 699.8 698.6 700.5 701.7 701.5 694.4 691.5 693.0 696.9 700.8 704.0 705.6 705.1 704.9 708.2 645.3 645.8 646.4 647.0 648.7 649.7 648.0 647.0 648.6 649.7 649.9 644.8 643.1 644.8 647.8 651.0 653.6 654.7 654.1 653.6 656.4 50.3 50.0 50.5 51.1 51.5 51.8 51.8 51.6 51.9 52.0 51.7 49.6 48.5 48.2 49.1 49.8 50.4 51.0 51.0 51.3 51.7 93.2 93.0 93.2 94.8 95.1 95.0 94.6 94.6 95.0 96.3 96.7 97.0 90.1 90.3 90.7 95.8 96.1 96.5 96.7 96.9 97.4 124.3 124.1 122.6 121.3 118.6 116.6 117.1 116.6 114.7 118.7 119.3 124.0 129.8 129.8 126.7 123.6 119.7 117.4 116.2 114.8 112.6 57.2 56.9 56.9 57.3 56.7 56.2 57.3 57.4 56.5 58.5 58.7 59.4 61.4 61.2 61.0 60.3 59.1 58.6 58.9 58.6 57.7 29.4 29.3 28.9 28.6 27.6 26.8 27.0 26.7 26.3 30.8 31.5 32.5 33.9 33.9 33.1 31.9 30.3 29.2 28.1 27.4 26.7 41.2 40.9 40.1 39.5 39.5 38.9 38.6 38.3 37.5 37.0 36.8 37.9 39.2 39.1 38.8 38.4 37.6 37.1 36.9 36.6 35.7 36.7 36.8 35.9 35.1 34.0 33.2 32.9 32.7 32.3 32.7 33.0 35.2 36.5 36.9 35.7 34.7 33.7 33.2 32.5 32.0 31.7 54.7 54.4 54.2 54.6 54.4 53.9 54.7 54.5 55.7 56.6 57.1 59.4 61.0 60.6 60.5 60.7 59.9 59.2 59.0 58.9 59.5 40.3 39.2 38.4 35.8 33.9 31.4 31.0 30.5 29.4 28.2 28.0 29.9 33.8 33.0 31.3 27.4 26.0 25.2 24.7 23.8 23.2 13.6 13.6 13.4 13.3 13.0 12.8 12.9 12.8 12.6 13.0 13.0 13.5 14.2 14.2 13.9 13.4 13.0 12.8 12.7 12.5 12.3 13.4 13.5 13.2 12.8 12.4 12.1 12.0 11.9 11.7 12.1 12.1 13.0 13.7 13.7 13.2 12.6 12.1 11.7 11.4 11.2 10.9 13.8 13.8 13.7 13.8 13.6 13.5 13.8 13.9 13.6 14.0 14.1 14.2 14.9 14.8 14.7 14.4 14.2 14.0 14.2 14.2 13.9 6.2 -0.2 -1.4 -1.3 -2.8 -2.0 0.5 -0.5 -1.9 4.1 0.6 4.7 5.8 -0.1 -3.0 -3.1 -4.0 -2.3 -1.2 -1.4 -2.2 1.5 1.1 1.1 1.1 0.8 0.8 1.0 0.9 1.5 6.0 2.0 1.4 1.7 1.4 1.2 1.0 0.8 0.9 0.8 0.8 1.7 14.2 6.3 6.6 7.1 6.1 5.3 7.7 5.5 6.4 7.2 7.0 9.3 13.1 6.6 6.2 6.1 5.3 5.8 6.6 4.8 6.3 6.2 4.8 6.2 6.3 6.5 5.3 5.3 4.1 6.4 5.4 5.2 3.5 6.2 6.0 8.5 7.3 7.2 6.0 5.4 4.1 6.4 3.4 2.8 3.0 3.1 3.2 2.7 2.9 2.9 3.4 3.8 3.3 2.8 2.8 2.1 1.9 3.0 2.8 3.0 3.1 2.9 3.8 32.9 32.8 32.2 32.3 32.0 31.0 30.4 29.8 29.3 28.5 27.9 27.1 26.4 26.3 26.2 26.0 25.7 25.4 25.0 24.7 24.6 3.6 3.6 3.5 3.5 3.5 3.4 3.3 3.3 3.2 3.1 3.0 3.0 2.9 2.9 2.9 2.8 2.8 2.8 2.7 2.7 2.7 WAGES AND INDICATORS OF OVERALL COMPETITIVENESS 2011 2012 2013 2012 2013 2014 2012 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 10 11 12 GROSS WAGE PER EMPLOYEE, y-o-y growth rates, % Activity - Total 2.0 0.1 -0.2 -0.7 -1.0 -1.0 -0.5 0.3 0.6 0.9 1.1 1.3 0.4 -2.4 -0.7 A Agriculture, forestry and fishing 3.1 -1.1 0.8 -1.5 -2.0 -0.8 1.1 0.0 3.0 0.4 -0.3 2.3 2.5 -5.9 -2.0 B Mining and quarrying 3.8 3.6 -2.0 2.2 -5.2 4.1 -6.8 -2.9 -2.4 2.9 8.3 10.7 1.5 1.7 -18.0 C Manufacturing 3.9 2.5 2.8 2.0 2.3 1.6 2.9 3.0 3.6 3.9 2.8 3.1 5.2 0.5 1.4 D Electricity, gas, steam and air conditioning supply 2.3 3.3 3.0 4.9 -0.5 6.2 2.8 3.6 -0.1 5.2 -1.1 6.5 7.8 -6.6 -0.5 E Water supply sewerage, waste management and remediation activities -0.1 0.1 0.7 0.4 -1.4 0.3 0.1 1.0 1.3 -0.2 2.2 1.5 2.2 -7.0 1.5 F Constrution 2.0 -2.5 -1.4 -2.8 -3.8 -2.4 -2.1 0.1 -1.4 -0.1 0.7 -0.2 0.2 -6.8 -4.6 G Wholesale and retail trade, repair of motor vehicles and motorcycles 2.8 0.8 0.4 0.0 -0.3 -0.2 0.0 0.6 1.2 1.3 1.0 1.1 0.5 -0.8 -0.6 H Transportation and storage 2.7 -0.4 -0.2 -1.7 -2.3 -1.1 0.2 -0.9 0.8 0.9 0.0 0.3 -1.1 -3.9 -1.6 I Accommodation and food service activities 2.1 -0.8 -0.4 -1.0 -1.1 -1.3 -0.7 -0.6 0.9 0.6 0.1 0.6 -0.9 -0.9 -1.4 J Information and communication 0.9 -0.4 -1.4 -1.2 -2.0 -0.6 -2.7 -1.1 -1.4 -2.8 1.7 0.8 0.1 -7.1 1.6 K Financial and insurance activities 0.6 1.1 0.1 2.2 -0.3 -2.1 1.2 1.2 0.3 -0.2 2.7 -0.2 3.5 -4.0 0.3 L Real estate activities 2.9 -0.6 -0.3 -0.6 -1.3 -1.1 0.2 -0.6 0.2 -0.8 -1.1 -0.5 0.1 -2.3 -1.6 M Professional, scientific and technical activities -0.4 -1.1 -2.4 -1.7 -1.3 -2.2 -3.4 -1.5 -2.6 0.1 0.5 1.5 -0.9 -1.9 -1.0 N Administrative and support service activities 3.5 0.7 0.0 -0.9 0.2 -2.4 0.7 0.7 0.9 3.3 2.7 2.6 1.4 -1.1 0.5 O Public administration and defence, compulsory social security 0.3 -1.8 -1.4 -3.2 -2.4 -2.4 -2.1 -0.6 -0.6 -0.9 1.2 2.1 -2.9 -2.6 -1.6 P Education 0.2 -3.3 -3.3 -5.0 -5.6 -5.4 -4.2 -2.0 -1.3 -1.2 -0.1 0.7 -5.8 -5.8 -5.3 Q Human health and social work activities -0.7 -1.3 -2.0 -1.7 -2.1 -2.3 -2.3 -2.2 -1.4 -1.2 -0.2 0.7 -2.8 -3.0 -0.4 R Arts, entertainment and recreation -0.7 -2.8 -3.0 -4.4 -4.6 -5.7 -3.8 -1.4 -1.0 -0.4 -0.5 0.2 -6.3 -3.9 -3.7 S Other service activities 0.9 -0.9 -0.4 -1.0 -2.4 -0.6 -0.7 -1.1 0.9 -1.4 -0.7 -0.3 -1.2 -4.0 -1.9 INDICATORS OF OVERALL COMPETITIVENESS1, y-o-y growth rates, % Effective exchange rate,2 nominal -0.1 -1.2 1.0 -1.8 -1.4 0.2 0.6 1.6 1.4 0.8 0.8 -1.6 -1.7 -0.9 Real (deflator HICP) -1.0 -1.1 1.3 -1.2 -0.8 0.9 0.8 2.2 1.3 0.5 0.7 -1.1 -1.3 -0.1 Real (deflator ULC) -2.2 -2.9 -1.9 -3.5 -2.7 -2.2 -1.3 -0.9 -3.3 -2.3 USD/EUR 1.3917 1.2856 1.3282 1.2515 1.2974 1.3204 1.3066 1.3246 1.3611 1.3697 1.3712 1.3252 1.2974 1.2828 1.3119 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. 2013 2014 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 -0.3 -1.7 -1.0 -0.2 -0.8 -0.4 0.8 -0.4 0.4 0.7 0.3 0.7 0.7 1.6 0.4 1.0 0.5 1.7 1.7 0.7 1.6 1.8 -4.6 0.2 0.6 1.5 1.1 2.2 -3.6 1.5 0.9 1.9 6.2 -1.7 2.3 0.9 2.1 -2.3 -0.8 1.8 1.5 3.6 10.4 0.6 1.1 -5.4 -10.3 -4.8 -1.8 -4.9 -1.8 5.1 -13.0 3.3 -8.1 19.1 -0.9 7.2 10.4 7.3 10.1 12.2 9.9 3.5 0.3 1.1 4.4 2.3 2.0 3.4 2.0 3.7 2.4 4.4 3.9 4.0 5.3 2.4 2.5 1.8 4.3 4.6 1.1 3.7 5.0 2.6 10.9 6.6 0.7 1.3 10.0 3.1 -2.1 7.4 -0.9 -5.9 1.8 11.9 2.3 -1.2 -0.9 -1.0 -0.1 10.3 9.5 2.7 -1.1 -0.8 1.6 -0.2 -1.1 -0.5 1.7 1.7 0.9 0.8 2.2 0.2 0.5 -1.3 1.1 0.8 4.8 2.7 -2.0 3.8 -1.2 -3.0 -2.9 -2.2 -3.2 -0.9 1.1 -1.7 0.9 -1.1 -2.5 -0.5 -1.4 0.5 0.6 1.0 0.8 0.3 0.2 -1.4 0.7 -0.6 -0.5 0.4 -0.5 0.6 -0.1 1.1 -0.4 1.1 0.8 1.3 1.5 0.8 0.8 2.2 1.1 0.2 1.6 0.9 0.7 1.7 -1.1 -1.4 -0.8 0.7 0.3 -0.4 1.7 0.3 -4.7 2.5 -2.7 3.0 1.3 0.8 0.5 -0.1 -0.5 0.6 0.9 -0.8 0.9 -2.4 -1.3 -0.2 0.1 -0.6 -1.7 -0.7 -1.0 -0.1 0.8 -0.6 2.4 -0.1 1.4 0.5 0.0 -1.3 1.7 1.6 -0.5 0.6 -1.1 -0.5 -0.1 -4.3 -1.9 -1.9 -0.8 -1.8 -0.6 -1.1 -2.3 -0.9 -0.8 -0.5 -6.9 3.6 0.2 1.5 0.9 -0.2 1.7 -1.0 -3.6 -1.6 0.4 3.5 -0.1 4.0 -1.4 1.0 2.7 -3.0 1.5 0.3 0.3 -1.1 2.8 4.3 0.8 0.3 1.0 -1.7 -0.4 -2.1 -0.7 -0.2 0.6 0.2 -0.3 -1.4 0.0 0.5 0.4 -0.4 -1.1 -0.9 -0.5 -1.6 -1.6 -0.3 -0.1 -1.0 -0.4 -0.3 -3.5 -2.8 -3.0 -4.1 -3.0 -2.3 -2.4 0.3 -2.1 -2.6 -3.0 -1.6 -0.3 2.3 -0.2 -1.7 3.4 2.9 -0.3 2.1 -0.5 -4.3 -2.3 1.4 0.0 0.9 0.8 0.2 1.3 1.0 2.1 -0.3 3.2 3.8 2.8 2.2 3.2 2.5 3.6 2.1 2.1 -1.7 -2.9 -2.6 -2.2 -3.0 -1.0 -0.4 -0.8 -0.6 0.8 -1.0 -1.5 -1.5 -0.8 -0.3 0.8 0.9 1.9 1.6 1.9 2.8 -5.9 -5.0 -5.4 -4.2 -5.8 -2.5 -2.4 -2.2 -1.3 -1.5 -1.4 -1.1 -0.8 -1.5 -1.2 -0.5 -0.4 0.6 0.7 0.8 0.6 -2.7 -2.5 -1.6 -3.0 -2.1 -1.7 -2.2 -1.8 -2.4 -1.8 -0.4 -1.8 -1.3 -1.4 -1.1 -0.8 -0.6 0.7 0.3 1.2 0.4 -4.7 -4.7 -7.5 -4.0 -3.2 -4.2 -0.7 -2.6 -0.9 -1.4 -0.5 -1.1 -0.4 0.8 -1.6 -0.7 -1.7 0.8 -1.0 1.5 0.0 -0.8 -0.1 -0.7 1.0 -1.2 -1.9 -0.8 -1.2 -1.2 0.9 -0.5 2.3 -1.6 -1.0 -1.7 -2.1 -0.7 0.8 0.3 -0.8 -0.3 0.1 0.4 0.1 0.2 0.4 1.1 1.6 2.0 1.3 1.3 1.5 1.5 0.9 0.7 1.3 1.1 1.0 0.3 0.3 0.0 -0.3 0.8 1.3 0.5 0.4 0.5 1.6 2.7 2.7 1.3 1.3 1.5 1.2 0.8 0.0 1.1 0.8 1.1 0.4 -0.2 -0.7 -1.2 1.3288 1.3359 1.2964 1.3026 1.2982 1.3189 1.3080 1.3310 1.3348 1.3635 1.3493 1.3704 1.3610 1.3659 1.3823 1.3813 1.3732 1.3592 1.3539 1.3316 1.2901 PRICES 2011 2012 2013 2012 2013 2014 2012 2013 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 10 11 12 1 CPI, y-o-y growth rates, % 1.8 2.6 1.8 2.9 2.6 2.3 1.5 2.1 1.1 0.5 0.6 -0.2 2.7 2.3 2.7 2.4 Food, non-alcoholic beverages 4.4 4.1 3.6 3.9 4.4 4.4 3.6 4.1 2.3 1.0 -0.6 -1.0 4.3 4.2 4.7 5.2 Alcoholic beverages, tobacco 5.7 6.5 7.0 7.2 9.5 10.6 7.5 7.4 3.0 2.7 4.4 3.6 9.6 9.5 9.4 11.2 Clothing and footwear -1.5 -0.2 0.2 0.7 -0.8 2.1 -1.2 1.0 -0.8 -0.9 -1.0 -0.1 -1.5 -1.7 0.8 1.6 Housing, water, electricity, gas 5.6 3.8 3.1 4.4 1.8 2.1 2.9 2.8 4.6 1.4 0.3 -0.3 2.7 1.5 1.3 0.7 Furnishings, household equipment 2.7 0.1 -1.2 -0.1 -0.9 -1.1 -1.8 -1.2 -0.6 -0.9 -0.2 -2.0 -0.8 -1.2 -0.7 -0.5 Medical, pharmaceutical products 1.6 0.4 -0.5 0.2 0.3 -0.2 -2.1 0.4 0.1 -0.1 0.7 -0.9 0.3 0.4 0.2 -0.1 Transport 1.0 3.3 0.3 3.9 3.5 1.5 -0.5 0.5 -0.4 -0.2 1.9 -0.1 3.9 3.3 3.4 2.0 Communications 1.2 -2.4 -1.2 -3.6 -2.0 -3.8 -1.9 1.2 -0.1 -1.4 -0.5 -2.8 -1.6 -3.3 -1.1 -3.6 Recreation and culture -1.5 1.4 0.1 1.2 0.4 -0.3 -0.5 0.6 0.4 0.4 -0.1 -0.2 0.1 0.9 0.2 -0.4 Education 1.7 2.9 2.6 4.3 4.8 4.6 4.6 1.4 -0.1 -0.1 -0.2 0.0 4.8 5.0 4.7 4.6 Catering services -6.8 4.5 6.5 3.7 9.4 9.2 8.8 7.0 1.6 0.9 1.7 1.0 9.1 9.7 9.3 9.3 Miscellaneous goods & services 2.2 2.4 1.3 3.3 2.8 2.4 2.7 0.5 -0.5 1.8 1.9 1.6 3.1 2.9 2.4 2.4 HCPI 2.1 2.8 1.9 3.2 3.0 2.7 1.8 2.2 1.1 0.6 0.8 0.1 3.2 2.8 3.1 2.8 Core inflation (excluding fresh food and energy) 1.3 2.0 1.6 2.0 1.9 1.9 1.4 1.9 1.2 1.3 1.3 0.6 1.9 1.8 2.0 1.9 PRODUCER PRICE INDICES, y-o-y growth rates, % Total 4.5 0.9 0.0 0.6 0.6 0.8 0.2 -0.2 -0.6 -0.8 -1.1 -0.5 0.8 0.7 0.4 0.4 Domestic market 3.8 1.0 0.3 0.9 1.2 1.1 0.3 0.1 -0.3 -1.0 -1.4 -1.1 1.2 1.3 1.0 1.1 Non-domestic market 5.3 0.7 -0.2 0.4 0.1 0.4 0.2 -0.6 -0.9 -0.6 -0.8 0.1 0.4 0.1 -0.2 -0.3 euro area 6.1 0.1 -0.4 0.1 -0.5 0.4 0.0 -0.7 -1.3 -1.4 -1.5 -0.6 -0.1 -0.6 -0.8 -0.8 non-euro area 3.6 2.0 0.3 1.3 1.5 0.6 0.7 -0.3 0.0 1.1 0.8 1.8 1.7 1.8 1.1 1.0 Import price indices 5.4 1.9 -0.4 1.3 3.2 0.8 -0.5 -0.3 -1.5 -2.1 -1.4 -1.0 2.9 3.7 3.0 2.1 PRICE CONTROL,1 y-o-y growth rates, % Energy prices 10.9 12.7 0.2 14.5 11.6 5.6 0.1 -0.7 -4.1 -4.6 -0.2 -1.5 14.7 10.4 9.8 7.5 Oil products 11.9 13.0 1.7 14.4 12.6 6.4 0.4 0.4 -0.4 -0.9 4.2 1.7 15.8 11.4 10.5 8.1 Transport & communications 1.1 1.6 11.3 0.0 5.7 8.6 8.6 17.3 10.9 14.6 15.8 7.3 0.0 8.6 8.6 8.6 Other controlled prices 0.0 -0.6 -1.5 0.1 -1.8 -3.9 -2.9 -0.8 1.5 2.2 5.7 3.2 -3.0 -1.1 -1.1 -3.9 Direct control - total 2.8 9.2 1.2 11.0 8.9 4.3 0.5 1.0 -0.8 -1.0 2.6 0.4 10.1 8.5 8.1 5.6 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. 2013 2014 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 2.7 2.0 1.5 1.2 1.9 2.6 2.2 1.4 1.3 1.3 0.7 0.8 0.1 0.6 0.4 0.7 0.8 0.0 -0.3 -0.3 -0.1 4.1 3.9 3.3 3.1 4.4 4.4 4.3 3.5 2.4 2.2 2.2 1.6 0.9 0.4 0.0 -0.9 -1.0 -1.1 -1.5 -0.4 -0.5 10.7 10.0 7.8 7.4 7.5 7.5 7.5 7.1 3.0 3.0 3.0 2.6 2.7 2.6 2.4 4.9 6.0 3.5 3.5 3.8 3.7 6.5 -1.3 0.0 -3.1 -0.5 1.1 0.1 1.7 0.3 0.1 -2.9 -2.2 -3.2 2.5 -0.6 -1.1 -1.3 -0.5 1.7 -1.2 -1.7 2.8 2.9 3.3 2.8 2.5 3.4 2.7 2.1 3.9 4.8 5.2 3.6 0.4 0.1 -0.9 0.4 1.3 0.2 -0.5 -0.7 -0.6 -1.5 -1.1 -2.2 -1.9 -1.4 -1.3 -0.8 -1.5 -0.4 -0.4 -0.9 -1.4 -0.5 -0.7 -0.1 0.4 -0.7 -1.6 -2.3 -2.1 -2.3 0.2 -0.7 -2.0 -2.1 -2.2 0.0 0.3 0.7 0.0 0.0 0.2 -0.2 -0.4 0.4 0.7 0.8 0.6 -0.7 -1.0 -0.9 -0.5 1.9 0.6 -0.9 -0.9 0.2 2.0 0.0 -0.4 -0.6 -0.3 -0.3 0.1 -0.9 0.2 1.3 2.3 2.1 0.8 -0.2 -0.9 -0.4 -4.6 -3.2 -2.2 -2.3 -1.3 0.0 2.5 1.1 1.6 -0.5 -1.5 -1.6 -1.3 -1.4 -1.2 -0.9 0.6 -2.0 -3.1 -3.4 -3.5 -0.4 -0.1 -0.4 -0.5 -0.6 0.7 0.9 0.2 0.9 0.4 -0.1 0.7 0.3 0.0 0.5 -0.4 -0.3 -0.3 -0.5 0.1 1.8 4.7 4.7 4.6 4.6 4.6 4.6 0.1 -0.5 0.1 -0.3 0.0 0.0 -0.2 -0.2 -0.2 -0.2 -0.3 -0.3 -0.3 0.7 0.6 9.2 9.0 8.6 8.6 9.1 9.6 9.9 2.0 2.0 1.5 1.4 0.6 0.9 1.3 1.4 2.0 1.7 1.1 1.2 0.7 0.6 2.5 2.4 2.1 2.9 3.1 1.2 0.2 0.1 0.7 1.0 -3.2 1.7 1.7 1.9 1.9 1.9 1.7 1.6 1.5 1.7 1.5 2.9 2.2 1.6 1.6 2.2 2.8 2.2 1.5 1.1 1.2 0.9 0.9 0.2 0.6 0.5 1.0 1.0 0.3 0.0 -0.1 0.1 2.2 1.6 1.4 1.3 1.5 2.0 2.1 1.7 1.6 1.4 0.7 1.2 1.1 1.6 1.3 1.4 1.4 0.8 0.7 0.5 0.4 1.1 0.8 0.5 0.2 0.0 -0.3 0.0 -0.4 -0.5 -0.7 -0.5 -0.5 -1.0 -0.9 -1.4 -1.1 -0.9 -0.6 -0.6 -0.3 0.0 1.1 1.1 0.6 0.1 0.1 0.1 0.2 0.1 -0.2 -0.4 -0.3 -0.3 -1.1 -1.5 -1.5 -1.5 -1.2 -1.0 -1.2 -1.1 -1.0 1.0 0.5 0.5 0.3 -0.2 -0.6 -0.2 -0.9 -0.9 -1.1 -0.7 -0.6 -0.9 -0.4 -1.2 -0.7 -0.5 -0.2 0.0 0.6 1.1 1.2 0.7 0.3 0.0 -0.4 -0.8 -0.3 -1.0 -1.0 -1.5 -1.4 -1.2 -1.8 -1.2 -2.0 -1.4 -1.2 -1.2 -0.5 -0.1 0.8 0.6 0.2 0.8 1.1 0.3 -0.3 0.0 -0.6 -0.4 -0.3 0.8 0.8 1.1 1.3 0.6 0.9 0.9 1.9 1.3 2.2 1.8 0.6 -0.3 -0.6 -1.3 0.5 1.2 -0.4 -1.6 -1.5 -2.0 -0.9 -1.5 -2.0 -2.7 -1.9 -1.1 -1.2 -1.1 -0.8 -1.1 -0.5 6.4 2.9 -0.6 -0.7 1.8 3.8 -1.3 -4.2 -5.9 -3.8 -2.5 -3.4 -5.7 -4.6 -2.9 0.9 1.3 0.2 -1.9 -2.9 0.5 7.7 3.6 -0.8 -0.9 3.1 5.5 -0.3 -3.5 -2.4 -0.2 1.6 0.8 -2.5 -0.9 1.5 6.0 5.2 4.1 1.4 -0.3 -0.2 8.6 8.6 8.6 8.6 8.6 17.3 17.3 17.3 17.3 8.0 8.0 14.6 14.6 14.6 15.8 15.8 15.8 7.3 7.3 7.3 7.3 -3.9 -3.9 -3.8 -3.8 -1.1 -0.8 -0.8 -0.8 2.7 0.8 0.8 3.7 1.4 1.4 6.4 6.4 4.2 3.6 2.3 3.6 3.4 4.9 2.4 -0.1 -0.3 2.0 4.3 0.5 -1.6 -1.4 -1.0 -0.1 0.1 -2.0 -1.2 0.6 3.6 3.6 1.9 0.0 -0.7 1.2 BALANCE OF PAYMENTS 2011 2012 2013 2012 2013 2014 2012 Q^ Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 9 10 11 12 BALANCE OF PAYMENTS, in EUR m Current account 146 1,026 2,101 288 474 499 607 499 497 360 564 634 189 192 227 55 Goods1 -957 -171 645 60 24 129 242 252 23 297 297 342 84 43 98 -117 Exports 21,450 21,631 22,026 5,283 5,424 5,367 5,635 5,433 5,590 5,697 5,866 5,842 1,848 1,961 1,926 1,537 Imports 22,407 21,802 21,381 5,223 5,400 5,239 5,393 5,181 5,567 5,400 5,569 5,501 1,764 1,918 1,828 1,654 Services 1,476 1,720 1,960 493 402 496 527 551 387 359 466 580 180 179 142 82 Exports 4,842 5,081 5,366 1,467 1,299 1,202 1,310 1,535 1,320 1,176 1,368 1,593 466 463 412 424 Imports 3,365 3,361 3,406 974 897 706 783 984 933 817 901 1,012 285 285 270 342 Income -524 -540 -564 -195 -37 -56 -192 -234 -83 -220 -218 -221 -55 -7 -14 -16 Receipts 936 698 503 173 206 124 110 130 139 152 199 180 64 58 59 90 Expenditure 1,460 1,238 1,066 368 243 180 302 364 221 372 417 401 119 65 72 106 Current transfers 151 16 60 -70 85 -70 30 -70 170 -76 20 -67 -21 -22 1 106 Receipts 1,404 1,409 1,462 284 411 335 359 296 472 327 388 258 88 90 108 212 Expenditure 1,253 1,392 1,402 355 326 405 328 366 302 403 368 326 109 113 108 105 Capital and financial account -474 -991 -2,822 -468 -421 -868 -695 -696 -562 -519 -717 -1,015 -217 -334 -312 225 Capital account -85 41 109 4 -16 31 -4 5 76 0 -39 12 -18 -2 -29 14 Financial account -389 -1,032 -2,931 -472 -404 -900 -691 -702 -639 -519 -678 -1,027 -199 -332 -283 211 Direct investment 633 168 -599 84 -152 -101 -649 68 83 67 441 286 26 -46 32 -138 Domestic abroad -85 226 186 43 16 -25 118 62 32 -11 -80 112 -15 -5 42 -21 Foreign in Slovenia 718 -58 -786 41 -168 -76 -767 6 51 78 521 174 41 -40 -10 -117 Portfolio investment 1,839 -222 3,982 -982 1,564 130 2,100 -425 2,176 3,102 1,191 -66 -187 1,674 -55 -56 Financial derivatives -155 -89 -32 -31 -15 -20 13 -10 -15 2 14 -1 -19 -7 -2 -6 Other investment -2,777 -920 -6,276 478 -1,820 -976 -2,136 -252 -2,912 -3,534 -2,316 -1,320 -43 -1,980 -270 429 Assets -1,490 -1,514 -2,263 237 -217 -1,225 -845 66 -258 -1,854 -2,220 -730 -54 -290 -443 516 Commercial credits -49 64 -16 108 340 -364 -51 90 308 -242 -79 21 -65 -28 38 330 Loans -55 -313 -19 84 -304 23 -176 88 45 80 37 97 -8 17 -49 -272 Currency and deposits -1,341 -1,218 -2,069 0 -127 -867 -545 -120 -536 -1,637 -2,143 -850 20 -128 -428 429 Other assets -46 -47 -159 45 -126 -17 -73 7 -76 -54 -35 1 0 -151 -4 29 Liabilities -1,287 595 -4,013 241 -1,603 249 -1,290 -317 -2,654 -1,680 -96 -590 11 -1,689 173 -86 Commercial credits 107 268 -159 -94 62 -300 93 -200 247 -175 73 -1 57 5 21 35 Loans -1,234 -723 409 -173 -202 373 599 -532 -31 -344 -69 -566 -30 13 -190 -25 Deposits -169 1,026 -4,246 530 -1,503 188 -1,981 429 -2,883 -1,176 -117 -6 -9 -1,726 358 -136 Other liabilities 9 24 -16 -22 40 -12 -2 -15 12 15 16 -16 -6 18 -17 39 International reserves2 72 31 -5 -21 19 67 -19 -83 30 -157 -8 74 23 26 11 -18 Statistical error 328 -35 721 180 -53 369 88 197 66 159 153 381 28 141 86 -280 EXPORTS AND IMPORTS BY END-USE OF PRODUCTS, in EUR m Export of investment goods 2,042 2,112 2,163 514 552 521 533 531 579 552 590 N/A 179 193 191 168 Intermediate goods 12,008 12,138 12,425 3,019 2,955 3,051 3,159 3,115 3,100 3,260 3,283 N/A 1,032 1,116 1,062 777 Consumer goods 6,950 6,811 6,960 1,604 1,788 1,673 1,824 1,672 1,791 1,775 1,874 N/A 590 610 628 550 Import of investment goods 2,505 2,402 2,573 570 687 646 667 564 696 643 691 N/A 190 219 209 259 Intermediate goods 14,107 14,005 13,635 3,410 3,382 3,457 3,448 3,282 3,448 3,314 3,386 N/A 1,140 1,244 1,160 978 Consumer goods 5,943 5,671 5,906 1,350 1,486 1,392 1,485 1,475 1,554 1,518 1,609 N/A 461 530 508 448 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. 2013 2014 1 2 3 4 5 6 7 8 9 10 11 12 12 3 4 5 6 7 8 9 81 102 316 271 114 222 150 152 197 187 95 214 76 -6 291 250 120 194 194 94 346 -53 58 123 132 -21 131 154 9 89 59 -4 -33 88 53 156 141 -5 161 133 -26 234 1,710 1,731 1,926 1,956 1,839 1,840 1,964 1,545 1,924 2,023 1,905 1,662 1,851 1,816 2,030 2,006 1,875 1,986 2,073 1,576 2,193 1,763 1,673 1,803 1,824 1,861 1,708 1,810 1,536 1,835 1,964 1,908 1,695 1,763 1,762 1,874 1,865 1,879 1,825 1,940 1,602 1,959 166 120 210 167 181 178 195 198 158 151 125 112 101 94 165 151 167 149 185 227 168 388 352 461 426 434 450 526 530 479 453 408 459 383 347 446 445 462 460 548 547 498 222 232 251 259 252 272 331 332 322 302 283 348 283 253 281 295 296 311 363 320 330 -4 -3 -48 -51 -60 -81 -157 -36 -41 -24 -19 -39 -68 -78 -74 -66 -62 -90 -69 -74 -77 39 39 46 35 35 39 46 45 39 39 44 56 50 48 54 64 68 67 63 60 58 43 42 94 86 95 120 203 80 81 63 63 95 118 126 128 130 130 157 132 134 135 -28 -73 31 23 14 -7 -43 -19 -8 2 -7 175 -45 -75 44 25 21 -26 -55 -33 21 86 96 153 140 116 103 101 92 102 103 89 280 79 87 161 161 133 94 82 58 119 114 169 122 116 102 110 145 111 110 101 95 106 124 162 116 136 112 120 137 91 98 -412 -99 -357 -295 -132 -267 -109 -290 -297 -446 -117 1 -80 83 -522 -249 -156 -312 -252 -172 -591 12 7 12 12 -14 -1 16 0 -11 22 9 45 1 0 -2 7 -29 -17 19 -17 10 -424 -106 -369 -307 -118 -266 -125 -290 -287 -468 -126 -45 -81 82 -520 -256 -126 -295 -271 -155 -601 22 -1 -122 -695 0 45 151 -22 -61 232 -100 -49 33 83 -49 226 93 122 46 112 128 21 22 -68 20 50 47 19 14 29 50 9 -27 -24 8 6 -49 37 -68 43 39 30 2 -24 -54 -715 -50 -2 132 -36 -90 182 -109 -22 58 75 -55 275 56 190 3 73 98 -155 16 270 -142 2,589 -346 -130 -90 -204 -24 1,828 372 410 2,740 -47 950 215 26 326 -109 -283 -15 -2 -4 18 -14 9 -6 -2 -2 -5 -1 -9 1 3 -2 12 0 2 -4 3 0 -298 -130 -547 495 -2,719 88 -58 -179 -15 -671 -1,847 -394 -464 -2,628 -442 -1,450 -424 -442 -641 -182 -497 -350 -302 -573 -231 -448 -166 -73 166 -27 -501 -137 379 -468 -1,210 -176 -1,293 -350 -577 -355 -4 -371 -61 -85 -217 -25 55 -80 -2 182 -89 -53 20 341 -56 -102 -84 -107 82 -54 19 150 -148 2 8 13 -67 -68 -42 9 75 3 -33 -15 94 -11 28 64 -31 22 47 65 4 28 -286 -225 -356 -70 -441 -34 -79 -99 58 -346 -94 -97 -358 -1,169 -111 -1,114 -438 -591 -452 -124 -273 -5 1 -13 -69 6 -10 -1 8 0 -68 -48 41 -43 34 -45 -40 -16 21 14 -34 22 52 171 26 727 -2,271 254 15 -345 12 -170 -1,710 -774 4 -1,418 -266 -158 -74 135 -286 -178 -126 -235 86 -152 -5 35 64 -127 -137 64 80 136 31 -283 93 15 -75 1 147 -80 -46 125 31 -152 495 674 -18 -57 -375 42 -199 6 -8 -29 19 -202 -161 -10 -94 36 -175 -196 -195 274 234 -319 68 -2,299 251 524 -250 155 -259 -1,843 -780 224 -1,296 -104 -58 -19 -40 -9 47 -44 -18 3 2 -10 12 -4 -7 0 -8 3 5 5 44 -13 -16 -14 39 -8 -22 17 -12 22 11 33 17 25 -61 -82 3 -4 1 -6 35 -62 -116 21 7 -11 -4 2 20 52 331 -3 41 25 18 45 -40 138 100 258 22 -215 5 -76 231 -1 36 118 58 78 245 157 160 203 182 178 173 204 149 178 197 197 185 168 180 204 202 183 204 206 160 N/A 998 980 1,073 1,102 1,045 1,012 1,115 912 1,088 1,163 1,069 869 1,089 1,030 1,142 1,129 1,067 1,087 1,159 901 N/A 508 555 611 632 577 614 604 449 619 623 599 569 559 570 646 633 584 657 662 475 N/A 197 195 254 219 260 189 204 155 205 221 241 234 185 202 256 242 222 227 231 179 N/A 1,218 1,104 1,136 1,195 1,196 1,057 1,165 987 1,130 1,237 1,208 1,003 1,122 1,063 1,129 1,115 1,146 1,125 1,192 981 N/A 444 465 482 491 489 505 509 438 528 549 516 490 474 517 527 548 550 511 553 472 N/A MONETARY INDICATORS AND INTEREST RATES 2011 2012 2013 2012 2013 6 1 7 1 8 1 9 1 10 1 11 1 12 1 1 2 1 3 1 4 SELECTED CLAIMS OF OTHER MFI ON DOMESTIC SECTORS, end of the month, in EUR m Claims of the BS on central government 102 221 233 204 227 227 207 226 224 221 232 233 229 233 Central government (S. 1311) 4,299 5,057 6,563 4,811 4,870 4,805 4,874 5,138 5,144 5,057 5,036 5,111 5,048 5,451 Other government (S. 1312, 1313, 1314) 584 610 581 584 589 590 585 583 580 610 609 613 609 610 Households (S. 14, 15) 9,454 9,267 8,917 9,362 9,341 9,346 9,338 9,341 9,318 9,267 9,191 9,160 9,159 9,141 Non-financial corporations (S. 11) 20,876 19,470 14,902 20,693 20,561 20,488 20,398 20,294 20,044 19,470 19,425 19,265 19,152 19,022 Non-monetary financial institutions (S. 123, 124, 125) 2,229 2,135 1,763 2,291 2,247 2,244 2,210 2,204 2,186 2,135 2,116 2,102 2,028 2,000 Monetary financial institutions (S. 121, 122) 5,445 5,194 5,020 5,918 5,248 5,237 5,210 4,930 5,012 5,194 5,085 5,300 5,389 4,957 Claims on domestic sectors, TOTAL In domestic currency 35,692 34,558 29,620 36,202 35,461 35,422 35,316 35,131 34,943 34,558 34,349 34,342 34,336 33,765 In foreign currency 1,536 1,309 1,097 1,439 1,423 1,402 1,372 1,354 1,348 1,309 1,263 1,277 1,264 1,236 Securities, total 5,659 5,862 7,026 6,018 5,972 5,886 5,928 6,004 5,990 5,862 5,846 5,927 5,780 6,177 SELECTED OBLIGATIONS OF OTHER MFI ON DOMESTIC SECTORS, end of the month, in EUR m Deposits in domestic currency, total 28,420 29,582 27,051 30,322 29,703 29,591 29,354 29,460 30,062 29,582 29,575 29,961 30,070 29,665 Overnight 8,245 8,678 8,558 9,151 8,573 8,633 8,523 8,651 8,763 8,678 8,726 9,185 8,997 8,919 With agreed maturity -short-term 7,868 7,056 6,689 7,111 7,134 7,052 6,964 6,980 7,417 7,056 6,905 6,827 7,140 7,148 With agreed maturity -long-term 12,248 13,780 11,569 13,982 13,930 13,851 13,751 13,755 13,763 13,780 13,863 13,829 13,775 13,424 Short-term deposits redeemable at notice 59 68 235 78 66 55 116 74 119 68 81 120 158 174 Deposits in foreign currency, total 579 552 487 583 597 591 579 571 576 552 538 554 549 520 Overnight 386 372 324 397 410 412 397 388 399 372 372 383 363 361 With agreed maturity -short-term 133 123 91 125 125 119 124 126 119 123 109 114 128 103 With agreed maturity -long-term 59 56 72 60 61 59 57 56 57 56 56 56 57 55 Short-term deposits redeemable at notice 1 1 0 1 1 1 1 1 1 1 1 1 1 1 INTEREST RATES OF MONETARY FINANCIAL INSTITUTIONS, % New deposits in domestic currency Households Overnight deposits 0.22 0.20 0.11 0.22 0.19 0.19 0.18 0.17 0.17 0.17 0.14 0.13 0.13 0.13 Time deposits with maturity of up to one year 2.15 2.31 1.86 2.29 2.27 2.23 2.23 2.28 2.28 2.24 2.28 2.18 2.10 2.01 New loans to households in domestic currency Housing loans, 5-10 year fixed interest rate 5.46 5.48 5.40 5.42 5.37 5.41 5.62 5.53 6.00 5.31 5.46 6.40 5.03 5.49 New loans to non-financial corporations in domestic currency Loan over EUR 1 million, 1-5 year fixed interest rate 5.69 5.32 3.86 5.83 3.94 5.06 6.52 6.51 5.48 5.57 3.75 3.76 3.70 3.48 INTEREST RATES OF THE EUROPEAN CENTRAL BANK, % Main refinancing operation^ 1.2^ 0.8^ 0.5^ 1.0^ 0.7^ 0.7^ 0.7^ 0.7^ 0.7^ 0.7^ 0.7^ 0.7^ 0.7^ 0.75 INTERBANK INTEREST RATES EURIBOR 3-month rates 1.39 0.57 0.22 0.66 0.50 0.33 0.25 0.21 0.19 0.19 0.20 0.22 0.21 0.21 6-month rates 1.64 0.83 0.34 0.93 0.78 0.60 0.48 0.41 0.36 0.32 0.34 0.36 0.33 0.32 Source of data: BS, EUROSTAT. 2013 2014 5 1 6 1 7 1 8 1 9 1 10 1 11 1 12 1 |2|3|4|5|6|7|8|9|10 233 233 233 232 231 232 233 233 239 239 245 209 227 228 229 230 230 237 5,361 4,999 5,108 5,024 4,995 4,965 4,881 6,563 6,448 6,437 6,476 6,154 6,262 6,296 6,459 6,512 6,581 6,936 600 600 601 601 604 610 570 581 585 585 584 582 577 582 594 596 606 611 9,107 9,099 9,050 9,059 9,052 9,031 8,996 8,917 8,879 8,849 8,853 8,850 8,835 8,810 8,808 8,814 8,813 8,807 18,889 18,832 18,639 18,633 18,501 18,102 17,918 14,902 14,691 14,599 14,543 14,531 14,429 14,039 13,867 13,764 13,586 12,603 1,990 1,999 1,992 1,983 1,978 1,962 1,966 1,763 1,993 1,968 1,962 1,945 1,929 1,921 1,881 1,858 1,873 1,665 5,423 5,255 5,190 5,320 5,311 5,198 4,752 5,020 5,014 5,294 4,818 5,012 4,863 3,896 4,347 4,108 3,732 4,037 34,040 33,902 33,612 33,754 33,705 33,198 32,569 29,620 29,594 29,706 29,154 29,298 29,017 27,756 28,005 27,645 27,220 26,425 1,235 1,223 1,203 1,192 1,177 1,152 1,144 1,097 1,090 1,075 1,046 1,036 1,025 1,019 1,010 1,011 994 986 6,091 5,657 5,762 5,669 5,554 5,513 5,366 7,026 6,921 6,944 7,028 6,731 6,845 6,763 6,933 6,987 6,968 7,240 30,497 29,943 30,228 30,184 30,194 30,091 29,645 27,051 27,255 27,501 27,034 27,187 27,067 26,577 27,060 26,869 26,317 26,491 8,806 8,923 9,124 9,055 8,812 8,861 8,729 8,558 8,779 9,066 8,979 9,278 9,390 9,582 10,236 10,138 9,870 10,329 7,712 7,626 7,652 7,696 8,260 8,222 8,110 6,689 6,730 6,888 6,893 7,215 7,088 6,768 6,876 6,928 6,958 6,712 13,787 13,189 13,203 13,159 12,843 12,688 12,495 11,569 11,422 11,264 10,852 10,389 10,252 9,875 9,585 9,368 9,026 8,936 192 205 249 274 279 320 311 235 324 283 310 305 337 352 363 435 463 514 548 536 520 541 521 506 511 487 493 488 490 496 496 508 510 516 538 528 354 340 342 362 333 324 334 324 328 324 333 335 336 350 345 354 354 348 103 113 97 95 109 104 98 91 93 93 90 94 92 90 96 92 115 110 91 82 81 84 79 78 79 72 72 71 67 67 68 68 69 70 69 70 0 1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0.12 0.11 0.10 0.10 0.10 0.10 0.09 0.09 0.09 0.08 0.08 0.08 0.08 0.08 0.07 0.07 0.07 0.07 2.01 1.97 1.89 1.78 1.65 1.56 1.48 1.46 1.36 1.22 1.15 1.07 1.04 1.00 0.93 0.89 0.85 0.81 5.39 5.30 5.34 5.31 5.11 5.49 5.17 5.36 5.38 5.42 5.26 5.58 5.23 4.84 5.2 5.01 5.09 4.65 5.68 3.03 2.66 3.37 3.73 4.71 4.59 6.58 3.96 4.21 6.63 5.51 1.53 5.05 2.82 4.66 0.5^ 0.5^ 0.5^ 0.5^ 0.5^ 0.5^ 0.2^ 0.2^ 0.2^ 0.2^ 0.2^ 0.2^ 0.2^ 0.1^ 0.1^ 0.1^ 0.0^ 0.05 0.20 0.21 0.22 0.23 0.22 0.23 0.22 0.28 0.29 0.29 0.30 0.33 0.32 0.24 0.21 0.19 0.10 0.08 0.30 0.32 0.34 0.34 0.34 0.34 0.33 0.37 0.40 0.39 0.41 0.43 0.42 0.33 0.30 0.29 0.20 0.18 PUBLIC FINANCE 2011 2012 2013 2012 2013 2014 2013 Q^ Q4 Q1 1 Q2 1 Q3 1 Q4 Q1 1 Q2 1 Q3 2 1 3 CONSOLIDATED BALANCE OF PUBLIC FINANCING (GFS-IMF methodology), current prices, EUR m GENERAL GOVERNMENT REVENUES TOTAL REVENUES 14,982.3 14,999.1 14,728.2 3,577.2 4,091.3 3,419.9 3,495.0 3,733.1 4,080.2 3,633.5 3,904.4 3,685.4 1,143.6 1,093.2 Current revenues 14,037.9 14,030.6 13,637.4 3,367.4 3,766.5 3,184.6 3,293.1 3,510.9 3,648.8 3,409.3 3,694.5 3,500.3 1,072.7 981.5 Tax revenues 13,209.2 13,118.3 12,648.4 3,170.4 3,461.2 2,946.8 3,107.4 3,188.1 3,406.0 3,147.0 3,317.0 3,237.5 955.1 915.2 Taxes on income and profit 2,723.5 2,656.6 2,137.4 511.1 793.0 577.1 510.9 442.5 606.9 595.6 686.3 466.3 194.1 183.1 Social security contributions 5,267.6 5,244.1 5,127.2 1,306.4 1,262.4 1,264.9 1,283.4 1,261.3 1,317.6 1,303.9 1,302.5 1,300.7 418.9 421.4 Taxes on payroll and workforce 29.2 25.6 23.4 5.8 6.1 5.5 6.1 5.5 6.3 4.8 5.3 4.7 1.8 1.8 Taxes on property 215.2 233.9 254.1 79.4 63.1 24.2 67.8 91.3 70.8 19.2 29.3 100.3 9.0 9.0 Domestic taxes on goods and services 4,856.2 4,876.1 5,027.4 1,244.1 1,303.4 1,039.2 1,224.7 1,357.0 1,406.5 1,170.9 1,300.1 1,350.5 319.3 281.6 Taxes on international trade & transactions 100.2 82.5 77.5 17.9 20.5 19.4 22.9 18.2 17.0 19.1 19.0 18.5 6.3 7.9 Other taxes 17.2 -0.6 1.3 5.8 12.6 16.5 -8.4 12.4 -19.2 33.5 -25.7 -3.5 5.7 10.5 Non-tax revenues 828.7 912.3 989.0 197.0 305.3 237.8 185.7 322.8 242.7 262.3 377.5 262.8 117.5 66.2 Capital revenues 65.3 62.5 67.1 11.7 29.5 10.7 13.1 12.8 30.4 11.6 10.5 13.1 3.5 3.1 Grants 10.4 9.2 32.7 1.6 4.5 12.9 2.7 14.7 2.4 1.3 11.0 4.3 12.4 0.3 Transferred revenues 53.8 51.7 52.7 50.0 1.1 0.5 0.4 50.9 0.9 1.4 0.4 0.5 0.0 0.1 Receipts from the EU budget 814.9 845.1 938.4 146.6 289.7 211.2 185.6 143.8 397.7 209.9 188.0 167.2 55.1 108.2 GENERAL GOVERNMENT EXPENDITURES TOTAL EXPENDITURES 16,546.3 16,125.7 16,286.4 3,836.0 4,105.7 4,137.4 4,011.6 3,846.2 4,291.2 4,290.2 3,956.0 4,009.4 1,348.6 1,327.9 Current expenditures 6,926.7 6,813.5 6,838.4 1,553.2 1,596.6 1,842.8 1,819.0 1,496.7 1,679.8 1,923.5 1,691.1 1,581.3 568.6 609.9 Wages, salaries and other personnel expenditures 3,882.7 3,727.7 3,616.7 910.8 884.7 908.5 936.6 871.2 900.4 920.4 909.4 884.4 269.0 312.4 Expenditures on goods and services 2,443.4 2,373.0 2,238.9 551.1 633.1 559.1 565.9 526.7 587.2 530.8 536.6 545.8 155.4 206.6 Interest payments 526.7 647.9 840.1 79.4 55.3 319.1 295.2 77.8 148.0 451.8 221.9 131.0 101.8 83.9 Reserves 73.9 64.9 142.6 11.8 23.4 56.2 21.3 20.8 44.2 20.5 23.3 20.1 42.4 7.0 Current transfers 7,818.9 7,687.0 7,671.3 1,903.2 1,947.8 1,948.5 1,893.7 1,922.4 1,906.6 1,984.4 1,848.5 1,883.4 639.8 625.7 Subsidies 496.3 502.7 519.5 57.3 160.5 190.5 111.9 77.5 139.6 205.5 80.3 71.4 60.0 36.3 Current transfers to individuals and households 6,533.5 6,384.2 6,343.1 1,636.6 1,549.7 1,576.7 1,585.9 1,626.0 1,554.5 1,561.9 1,600.1 1,621.1 521.5 529.0 Current transfers to non-profit institutions, other current domestic transfers 737.2 741.0 734.2 196.7 216.8 158.1 185.2 185.7 205.3 204.5 147.7 173.2 41.6 58.5 Current transfers abroad 52.0 59.0 74.4 12.6 20.8 23.3 10.7 33.2 7.2 12.3 20.4 17.8 16.8 1.9 Capital expenditures 1,023.5 915.0 1,031.8 223.4 347.2 141.6 146.3 259.7 484.2 188.1 269.8 414.6 50.8 41.4 Capital transfers 372.1 319.9 319.5 74.3 154.3 42.5 52.0 69.3 155.6 31.5 50.7 67.9 11.9 17.9 Payments to the EU budget 405.1 390.3 425.5 82.0 59.9 161.8 100.5 98.0 65.0 162.7 95.9 62.2 77.5 33.0 SURPLUS / DEFICIT -1,564.1 -1,126.6 -1,558.2 -258.8 -14.4 -717.5 -516.6 -113.1 -211.0 -656.7 -51.6 -324.0 -204.9 -234.6 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. 2013 2014 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|9 1,187.0 1,133.7 1,174.3 1,290.1 1,204.9 1,238.2 1,275.2 1,201.0 1,604.1 1,231.6 1,196.5 1,205.4 1,285.9 1,337.1 1,281.4 1,175.6 1,166.2 1,343.6 1,107.7 1,060.8 1,124.5 1,225.5 1,159.5 1,125.9 1,210.9 1,144.3 1,293.5 1,199.1 1,139.9 1,070.4 1,185.2 1,279.0 1,230.3 1,129.9 1,146.6 1,223.9 1,046.5 997.0 1,063.9 1,061.0 1,063.1 1,064.0 1,142.4 1,067.1 1,196.5 1,135.8 994.4 1,016.8 1,116.3 1,072.3 1,128.4 1,029.8 1,058.3 1,149.4 70.9 163.5 276.6 62.6 188.7 191.2 187.8 190.0 229.1 207.0 199.3 189.3 241.3 185.7 259.4 75.3 191.5 199.5 432.4 426.3 424.7 423.0 419.4 418.9 420.1 427.8 469.7 430.5 445.0 428.5 435.7 432.5 434.2 436.8 432.9 431.1 2.1 2.0 2.0 2.2 1.6 1.6 1.9 2.0 2.5 1.7 1.4 1.6 1.8 1.7 1.8 1.9 1.4 1.5 17.3 30.4 20.1 32.1 29.3 29.8 19.9 35.7 15.3 6.8 6.6 5.9 11.9 6.0 11.4 23.6 37.5 39.2 521.1 375.5 328.1 527.3 408.0 421.6 512.7 408.8 485.0 478.9 329.6 362.4 444.9 439.2 416.0 489.1 383.2 478.2 8.3 7.6 7.0 6.6 6.3 5.3 5.8 6.1 5.1 5.0 7.2 6.9 6.6 5.7 6.7 6.2 5.9 6.3 -5.7 -8.2 5.5 7.2 9.7 -4.5 -5.8 -3.2 -10.2 6.0 5.3 22.2 -25.9 1.4 -1.2 -3.0 5.9 -6.4 61.2 63.9 60.6 164.5 96.4 61.9 68.5 77.2 97.0 63.2 145.5 53.6 68.9 206.7 101.9 100.1 88.3 74.5 4.1 4.6 4.4 5.8 2.7 4.4 4.7 5.5 20.2 3.8 4.4 3.4 3.0 3.5 4.0 4.7 3.9 4.4 0.9 0.3 1.4 10.4 0.2 4.0 0.3 0.5 1.6 0.6 0.1 0.6 1.0 0.5 9.5 0.3 0.2 3.8 0.0 0.0 0.3 0.3 0.4 50.2 0.3 0.5 0.2 0.7 0.1 0.6 0.1 0.2 0.2 0.1 0.2 0.1 74.1 67.9 43.6 48.0 42.0 53.8 59.0 50.2 288.5 27.4 52.0 130.5 96.6 53.8 37.5 40.6 15.3 111.3 1,452.2 1,260.2 1,299.3 1,373.0 1,179.8 1,293.4 1,332.4 1,367.6 1,591.3 1,439.9 1,474.7 1,375.7 1,335.2 1,326.2 1,294.6 1,411.8 1,279.4 1,318.2 727.3 519.2 572.5 503.8 460.8 532.1 532.6 565.1 582.1 624.9 672.0 626.6 622.5 536.0 532.6 516.5 524.1 540.7 294.5 280.7 361.5 295.0 290.5 285.7 285.1 295.5 319.8 299.9 345.5 275.1 287.7 290.8 330.8 299.8 294.4 290.2 197.5 194.0 174.3 198.3 161.0 167.4 173.1 183.1 231.1 176.1 183.8 170.9 183.0 165.1 188.4 207.5 169.6 168.8 227.9 38.8 28.5 3.9 1.7 72.2 66.8 78.8 2.3 141.9 135.9 173.9 143.0 73.3 5.7 3.4 53.2 74.4 7.3 5.7 8.3 6.5 7.6 6.8 7.6 7.7 28.9 7.0 6.8 6.7 8.8 6.8 7.7 5.8 6.9 7.4 637.4 633.4 622.9 731.8 582.5 608.2 617.1 628.6 660.9 697.0 652.4 634.9 590.1 644.3 614.0 717.7 580.1 585.6 33.2 44.7 34.1 28.4 21.2 27.9 34.4 48.5 56.6 119.7 65.7 20.2 31.9 33.2 15.1 31.0 18.1 22.2 534.5 525.4 526.0 610.4 503.5 512.1 516.7 513.9 523.9 514.9 524.3 522.8 531.1 543.8 525.1 613.3 502.8 505.0 67.2 57.7 60.3 67.1 53.7 64.8 63.2 63.3 78.8 56.5 57.4 90.7 25.1 55.8 66.8 59.3 56.7 57.1 2.6 5.6 2.5 25.8 4.0 3.4 2.7 2.9 1.6 6.0 5.0 1.3 2.0 11.4 7.0 14.0 2.4 1.3 38.1 50.6 57.5 80.9 83.2 95.5 122.6 125.2 236.4 68.6 59.1 60.4 75.1 92.5 102.3 129.7 131.4 153.4 16.1 23.3 12.7 23.0 21.3 25.1 41.5 29.6 84.5 1.7 9.4 20.4 14.8 20.3 15.6 22.6 22.8 22.4 33.2 33.7 33.6 33.5 32.0 32.5 18.6 19.1 27.3 47.7 81.7 33.3 32.7 33.1 30.0 25.2 21.0 16.0 -265.2 -126.5 -125.0 -82.9 25.0 -55.2 -57.2 -166.6 12.8 -208.2 -278.2 -170.3 -49.3 10.9 -13.1 -236.1 -113.2 25.4 Acronyms Acronyms in the text ABSPP - Asset Backed Securities Purchase Programme, AJPES - Agency of the Republic of Slovenia for Public Legal Records and Related Services, CBPP - Covered Bond Purchase Programme, CPI - consumer price index, EC - European Comission, ECB - European Central Bank, EIA - Energy Information Administration, EMU - European Monetary Union, ESA 2010 - European System of National and Regional Accounts 2010, ESS - Employment Service of Slovenia, EU - European System of Integrated Social Protection Statistics, Euribor - Euro Interbank Offered Rate, EUROSTAT - Statistical Office of the European Union, FED - Federal Reserve System, GDP - Gross domestic product, HICP-Harmonised Index of Consumer Prices, ICT - Information and Communication Technology, ifo - Institut für Wirtschaftsforschung, IMAD - Institute of Macroeconomic Analysis and Development, IMF - International Monetary Fund, Libor - London Interbank Offered Rate, LTRO - Long-term refinancing operation, MF - Ministry of Finance, NEER - Nominal Effective Exchange Rate, NFI - Nonmonetary Financial Institutions, OECD - Organization for Economic Co-operation and Development, OI - core inflation, OP RČV - Operational Programme for Human Resource Development, OP ROPI - Operational Programme of Environmental and Transport Infrastructure Development, OP RR - Operational Programme for Strengthening Regional Development Potentials, PDII - Pension and Disability Insurance Institute, PMI - Purchasing Managers Index, 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, TLTRO - Targeted Longer Term Refinancing Operations, 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 ofrecorded media, 19- Manufacture of coke and refined petroleum products, 20 - Manufacture of chemicals and chemical products, 21 - Manufacture of basic pharmaceutical products and pharmaceutical preparations, 22 - Manufacture of rubber and plastic products, 23 - Manufacture of other non-metallic mineral products, 24 - Manufacture of basic metals, 25 - Manufacture of fabricated metal products, except machinery and equipment, 26 - Manufacture of computer, electronic and optical products, 27 - Manufacture of electrical equipment, 28 - Manufacture of machinery and equipment n.e.c., 29- Manufacture ofmotor vehicles, trailers and semi-trailers, 30- Manufacture of other transport equipment, 31 - Manufacture of furniture, 32 - Other manufacturing, 33 - Repair and installation of machinery and equipment, D-Electricity, gas, steamand air conditioning supply,E-Water supply sewerage, waste management and remediationactivities, F - Construction, G - Wholesale and retail trade, repair of motor vehicles and motorcycles, H - Transportation and storage, I - Accommodation and food service activities, J - Information and communication, K - Financial and insurance activities, L -Real estate activities, M - Professional, scientific and technical activities, N - Administrative and support service activities, O -Public administration and defence, compulsory social security, P - Education, Q - Human health and social work activities, R - Arts, entertainment and recreation, S - Other service activities, T - Activities of households as employers, undifferentiated goods- and services- producing activities of households for own use, U - Activities of extraterritorial organizations and bodies. Acronyms of Countries AT-Austria, BA-Bosnia and Herzegovina, BE-Belgium, BG-Bulgaria, BY-Belarus, CH-Switzerland, HR-Croatia, CZ-Czech Republic, CY-Cyprus, DE-Germany, DK-Denmark, ES-Spain, EE-Estonia, GR-Greece, FR-France, FI-Finland, HU-Hungary, IE-Ireland, IL-Israel, IT-Italy, JP-Japan, LU-Luxembourg, LT-Lithuania, LV-Latvia, MT-Malta, NL-Netherlands, NO-Norway, PL-Poland, PT-Portugal, RO-Romania, RS-Republic of Serbia, RU-Russia, SE-Sweden, SI-Slovenia, SK-Slovakia, TR-Turkey, UA-Ukraine, UK-United Kingdom, US-United States of America. Slovenian economic mirror November 2014, No. 11, Vol. XX