.^'IMAD O fü Q) £ u E o X X O Ü) O u 0) o fO ^ C fO Slovenian Economic Mirror ISSN 1318-3826 No. 1 / 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, Urška Brodar, Gonzalo Caprirolo, MSc, Janez Dodič, Marjan Hafner, MSc, Slavica Jurančič, Mojca Koprivnikar Šušteršič, Janez Kušar, Urška Lušina, MSc, Jože Markič, PhD, Helena Mervic , Tina Nenadič, MSc, Mitja Perko, MSc, Jure Povšnar, Ana T. Selan, MSc, Dragica Šuc, MSc, Branka Tavčar Editorial Board: Lidija Apohal Vučkovič, Marijana Bednaš, MSc, Lejla Fajič , Alenka Kajzer, PhD, Rotija Kmet Zupančič, MSc, Janez Kušar, Boštjan Vasle, MSc Translator: Marija Kavčič Data Preparation and Graphs: Bibijana Cirman Naglič, Marjeta Žigman Concept and Design: Katja Korinšek, Pristop DTP: Bibijana Cirman Naglič Print: SURS Circulation: 80 copies © The contents of this publication may be reproduced in whole or in part provided that the source is acknowledged. Contents In the spotlight................................................................................................................................................................3 Current economic trends..............................................................................................................................................5 International environment...............................................................................................................................................7 Economic developments in Slovenia.............................................................................................................................9 Labour market..................................................................................................................................................................16 Prices..................................................................................................................................................................................20 Balance of payments.......................................................................................................................................................23 Financial markets.............................................................................................................................................................25 Public finance....................................................................................................................................................................27 Boxes Box 1: Real estate market - Q3 2013............................................................................................................................11 Box 2: (In)solvency.............................................................................................................................................................13 Box 3: Road and rail freight transport - Q3 2013.......................................................................................................15 Box 4: Extraordinary year-end payments.........................................................................................................................19 Box 5: Absorption of cohesion funds in 2013 (2007-2013 programming period)...............................................28 Statistical appendix.....................................................................................................................................................31 The Economic Mirror is prepared based on statistical data available by 6 February 2014. On January 2008, the new classification of activities of business entities NACE Rev.2, which replaced NACE Rev. 1.1, came into force in all EU Member States. In the Republic of Slovenia, the national version of the standard classification, SKD 2008, which includes the entire European classification of activities but also adds some national subclasses, came into force on the mentioned date. In the Slovenian Economic Mirror, all analyses are based on the SKD 2008, except when the previous SKD 2002 classification is explicitly referred to. More general information about the introduction of the new classification is available on the SURS website http://www.stat.si/eng/ skd nace 2008.asp. All seasonally adjusted data in the Economic Mirror are calculations by IMAD. In the spotlight With economic conditions steadily improving, the IMF predicted economic growth of 1% in the euro area for 2014. Short-term indicators of economic activity in the euro area show that economic activity improved in the last quarter of 2013. The IMF estimates that exports will continue to contribute to growth, while domestic demand will be held back by high public and private debt and financial fragmentation. Downside risks to economic growth are associated with very low inflation and consequent possible increases in real interest rates, which would result in higher public and private debt servicing costs. To improve confidence, revive crediting and decrease risk migration between the banking system and the public finances, it is essential to stick to the current monetary and fiscal policy orientation, strengthen structural reforms and create a banking union. A breakdown of indicators of economic activity in Slovenia shows a continuation of growth in exports and, in particular, construction in the second half of the year. The value of construction put in place rose by over a quarter between June and November, most notably in civil engineering. Nevertheless, the indicator did not even reach half of the level of2008. Merchandise exports fell in November, but remained higher than at the beginning of the year, being the only indicator to exceed the level of2008. Manufacturing production and turnover in retail trade have been practically stagnant since early 2013, but in the last few months manufacturing production increased slightly so that in November only turnover in retail trade remained below the level recorded at the beginning of the year. At the beginning of 2014 the economic sentiment indicator improved slightly after half a year of stagnation. The labour market situation deteriorated at the end of 2013 and the beginning of 2014. Between April and November the number of employed persons remained almost unchanged (seasonally adjusted), but in the first eleven months of 2013 it was down 2.5%, on average, on the same period of 2012. In December and January, unemployment rose significantly (in both months by 0.6%, seasonally adjusted). In January the number of unemployed approached 130,000, the largest figure since 1998, which was primarily a result of an increased inflow due to the termination of fixed-term contracts. The average gross earnings per employee remained unchanged in November. In the public sector they fell substantially, mainly owing to a significant decline in public corporations (seasonally adjusted), where 13th month payments and Christmas bonuses were down considerably relative to the previous year for the third year in a row. Extraordinary payments were otherwise up 4.7% in the private sector and down 25.1% in the public sector in comparison with a year earlier. The modest price growth in 2013 (0.7% in December, year-on-year) was mainly marked by tax changes. The contribution of tax policy measures (increase in VAT, excise duties and other taxes) is estimated at 0.8 percentage points, which is slightly less than in 2012 (1.0 percentage points on account of the ZUJF). Despite a fairly similar contribution of tax changes, inflation was substantially lower than a year earlier (2.7%) mainly due the persistently weak economic activity in the domestic and internationally environments. As measured by the HICP, inflation in Slovenia (0.9%) was similar to that in the euro area (0.8%). Besides higher food and energy prices than in the euro area, inflation in Slovenia was also marked by rises in services prices, while prices of non-energy industrial goods fell. In 2013 inflation was also down on the previous year in all countries across the euro area. The deterioration in cost competitiveness in Slovenia at the end of last year was one of the smallest, while the improvement in cost competitiveness in the third quarter was one of the largest in the euro area and the EU. In November price competitiveness continued to deteriorate due to the appreciation of the exchange rate of the euro, but owing to the structure of Slovenia's external trade the deterioration was among the smallest in the euro area. On the other hand, cost competitiveness increased again in the third quarter under the influence of a further drop in unit labour costs, despite the higher exchange rate of the euro. The relative position of the Slovenian economy in the euro area and the EU has improved for the third year in a row but is still less favourable than before the beginning of the crisis. The turnaround after 2010, mainly a result of lower wages and a decline in employment, has been mainly underpinned by industries in the tradable sector. Insolvency problems deepened further last year. On average, 16,053 legal and natural persons had outstanding matured liabilities for more than five consecutive days in a month (13% more than a year before). The average monthly amount of outstanding liabilities recorded by legal entities was EUR 748 m, while the average monthly amount owed by natural persons totalled EUR 145 m (up 9.6% and 20.8% on a year earlier, respectively). The number of non-payers and the amounts of outstanding liabilities rose, and there was an increase in payment periods. Among debtors, 2.4 times more legal entities had 7 times larger debt than in 2008. As a result of the new legislation, the number of bankruptcy proceedings initiated against legal entities doubled in the second half of the year. At the end of the year the situation in the Slovenian banking system was marked by the beginning of the stabilisation of the most exposed banks. Consequently, loan volume of domestic non-banking sectors shrank by EUR 3.3 bn in monthly terms in December, with corporate and NFI loans dropping the most due to the transfer of the first package of bad bank claims to the DUTB. The decline in household loans was also much stronger than in previous months. Loans of domestic non-banking sectors thus fell by EUR 5.2 bn in 2013, approximately four times as much as in 2012. Last year's decline in household deposits was the largest thus far, while government deposits also dropped significantly due to the recapitalisation of the banking system. At the end of the year the banks continued to reduce liabilities abroad. The stock of bad claims rose by EUR 1.9 bn in the period to November, which is almost half more than in the same period of 2012. In 2013 overall, additional impairments and provisions increased by as much as EUR 3.7 bn, approximately by a factor of 1.5 more than in 2012. According to the consolidated balance, the general government deficit amounted to EUR 1.6 bn in the first eleven months of 2013. The year-on-year deficit increase of EUR 378 m was mainly underpinned by lower revenue (-2.9%), as expenditure was similar to the same period a year before. Revenue declined primarily due to lower tax revenues (in particular from corporate and personal income taxes) and a decline in social security contributions. On the expenditure side, expenditures on the wage bill and goods and services dropped the most, while interest payments have increased substantially in the last few months. ■o £ Q) E o £ 0 u 01 £ 01 3 U International environment Short-term indicators of economic activity in the euro area show improvement in economic activity in the last quarter of 2013. Industrial production in manufacturing and turnover in retail trade1 increased significantly in November, while construction output fell for the third consecutive month. Confidence and business climate indicators rose again in the past month. Having been rising since April 2013, the economic sentiment indicator for the euro area reached the highest value since June 2011 in January. The composite Purchasing Managers Index (PMI) also improved, most notably in manufacturing. Economic activity in the largest economy in Europe, Germany, rose in the second half of the year after less favourable results in the first half of the year. Despite the favourable figures for the end of the year,2 Germany's economic growth in 2013 totalled 0.4% according to preliminary data, the lowest in the last three years. It was driven by domestic consumption, while exports did not contribute to growth as in some EU countries recession continued and global economic growth slowed down. The Consensus forecast for 2014 GDP growth in Germany is 1.8%, which is, given the very low unemployment rate,3 estimated to be a result of increased private consumption and stronger export demand. Figure 1: Structure of GDP growth in Germany I Private consumption I ■ Gross fixed capital formation I ■ Net exports Government consumption Changes in inventories Real GDP growth (rightaxis) 5 2010 2011 2012 Source: Destatis. In the second half of last year global economic activity and global trade strengthened more than expected, so that the IMF improved slightly its forecast for this year's growth. The forecast was revised upwards by 0.1 percentage points to 3.7% in comparison with October's projections, mainly on account of stronger growth in advanced countries, 1 Seasonally adjusted, industrial production in manufacturing recorded 1.9% growth in November, the strongest since March 2010, while turnover in retail trade rose 1.4%. 2 Industrial production in manufacturing was up 3.1% in November and new orders up 2.1%, seasonally adjusted. 3 5.2% in November, the lowest in the last twenty years. particularly the US and the UK. The IMF expects 1.0% economic growth in the euro area this year, estimating that exports will continue to contribute to growth, while domestic demand will be held back by high public and private debts and financial fragmentation. Downside risks to economic growth are associated with very low inflation and consequent possible rises in real interest rates, which would, in turn, increase servicing costs of public and private debts. The IMF maintains that monetary policy should stay accommodative, as output gaps are still large while inflation is low and fiscal consolidation continues, albeit more slowly. To improve confidence, revive crediting and decrease risk migration between the banking system and public finances, it is essential to stick to the current monetary and fiscal policy orientation, strengthen structural reforms and create a banking union. Figure 2: IMF GDP growth forecasts -World -Advanced economies ■ Emerging market and developing economies ■ Euro area In the last quarter of 2013 the credit standards for euro area enterprises deterioratedless than inseveralprevious quarters, while loan demand declined. According to the ECB Euro Area Bank Lending Survey, 2% more banks tightened than eased their credit standards in the last quarter of 2013 (in the third quarter 5% more). The tightening was again mainly a result of banks' negative expectations regarding the recovery in individual industries. The demand by enterprises, which continued to mainly seek loans for debt restructuring, remained week, but it declined less than in previous quarters. We estimate that the weak demand for loans to enterprises in Slovenia is, in addition to modest economic activity, to a great extent attributable to interest rates, which are among the highest in the euro area. Only Greece and Portugal had higher interest rates in November. Household loan demand decreased again, but banks reported an improvement in credit standards for housing loans, while credit standards for consumer loans remained unchanged. Euro area banks expect that credit standards for loans to enterprises will cease 5 4 3 2 0 2008 2009 2013 deteriorating in the first quarter of 2014, while the credit standards for household loans will tighten much less than in previous quarters. Figure 3: The ECB Euro Area Bank Lending Survey for the euro area Credit standards for loans to enterpr. over the past 3 months (left axis) -Credit standards for loans to enterpris. over the next 3 months (left axis) -Demand for loans to enterprises over the past 3 months (rigth axis) -----Demand for loans to enterprises over the next 3 months (right axis) 70 70 a a Source: ECB. Figure 4: Movements of interest rates on corporate loans in the euro area and selected euro area countries # 4 Source: ECB. Interest rates for loans over EUR 1 m with a variable, or up to one year with a fixed interest rate. Government bond yields of both the most vulnerable euro area countries and the countries with the highest credit ratings declined in January. The yields of the most indebted EU countries declined the most. Ireland's government bond yields, having already declined after the country exited the financial assistance programme in December, dropped further in January after the credit rating agency Moody's upgraded Ireland's sovereign rating from Ba1 to Baa3. Spain's government bond yields also fell after the country's successful exit from the financial assistance programme, while the significant decrease in Portuguese government bond yields in January was mainly impacted by Standard&Poor's removing Portuguese government debt from its negative credit watch list. The yields of Slovenian government bonds were down 47 basis points in January when Moody's reaffirmed the Ba1 rating of Slovenia and changed its outlook to stable from negative, as the government and the Bank of Slovenia had started to recapitalise banks immediately after the capital shortfalls were revealed. Amid improvement on EU bond markets, uncertainty has now started to rise on the financial markets of developing countries. Volatility increased at the beginning of the year, mainly as the Fed decided to reduce its monthly purchases of government bonds by an additional USD 10 bn in January. The latter was reflected in currency depreciations in developing countries, the largest declines in exchange rates against the US dollar being recorded in Russia, South Africa and Turkey. Figure 5: Yields on ten-year government bonds ■i^. 16 14 != 10 8 Source: Bloomberg. Note: To monitor the movement of 10-year gov. bond yields on the common EU market, a new benchmark gov. bond started to be used as a basis for comparison as of 1 Jan 2014. The data before and after this date are therefore not comparable Figure 6: Prices of Brent crude oil and the USD/EUR exchange rate -Price in EUR (left axis) -Price in USD (left axis) -Exchange rate of USD to EUR (right axis) 7 6 0 5 3 2 1.4 - 1.2 20 Table V. Monetary market interest rates and exchange rate of the national currency against the EU Interest rates average, in % change, in b. p. 2013 I 13 XII 13 I 14 I 14/XII 13 I 14/I 13 3-month EURIBOR rate 0.220 0.205 0.274 0.292 1.8 8.7 3-month USD LIBOR rate 0.268 0.303 0.243 0.238 -0.5 -6.5 3-month CHF LIBOR rate 0.021 0.016 0.020 0.023 0.3 0.7 Exchange rates average change, in % 2013 I 13 XII 13 I 14 I 14/XII 13 I 14/I 13 EUR/USD 1.328 1.329 1.370 1.361 -0.7 2.4 EUR/CHF 1.231 1.229 1.224 1.232 0.7 0.2 EUR/GBP 0.849 0.833 0.836 0.827 -1.1 -0.7 EUR/JPY 129.66 118.34 141.68 141.47 -0.1 19.5 Source: Euribor, ECB, calculations by IMAD. Table 2. Oil and non-energy commodity prices Oil average change, in % 2013 I 13 XII 13 I 14 I 14/XII 13 I 14/I 13 Brent USD 108.56 112.96 110.76 107.95 -2.5 -4.4 Brent EUR 81.65 84.19 80.79 78.73 -2.5 -6.5 Commodities change, in % 2013/2012 XII 13/XI 13 XII 13/XII 12 Non-energy commoditites -1.2 1.8 -3.3 Food 1.1 2.7 -3.5 Agricultural raw materials 1.4 0.6 5.4 Metals -4.2 0.8 -7.0 Source: EIA, ECB, IMF, calculations by IMAD. The ECB's key interest rate remained unchanged, while interbank interest rates in the euro area rose slightly in December and January. This was mainly a consequence of a decline in excess liquidity in the banking system, which was the lowest since December 2011 in January. The monetary market also recorded accelerated repayment of funds borrowed in longer-term refinancing operations of the ECB (LTROs), which also contributed to the interest rate increase. Between mid-December 2013 and mid-January banks had repaid around half of liabilities from the first LTRO (EUR 260 bn) and around a third of liabilities from the second LTRO (EUR 187 bn). Figure 7: Non-energy commodity prices in dollars -Non-energy commodities -----Food -----Agricultural raw materials -Metals 260 240 220 200 180 -js 140 120 100 80 60 Source: IMF. Economic developments in Slovenia A breakdown of indicators of economic activity in Slovenia shows a continuation of growth in exports and, in particular, construction in the second half of the year. The value of construction put in place rose by over a quarter between June and November, most notably in civil engineering. Nevertheless, the indicator did not even reach half of the level of 2008. Merchandise exports fell in November, but remained larger than at the beginning of the year, being the only indicator to exceed the level of 2008. Manufacturing production and turnover in retail trade have been practically stagnant since early 2013, but in recent months manufacturing production has increased slightly so that in November only turnover in retail trade remained below the level recorded at the beginning of the year. At the beginning of 2014 the economic sentiment indicator improved slightly after half a year of stagnation. Figure 8: Short-term indicators of economic activity in Slovenia -Merchandise exports - Industrial production in manufacturing Construction put in place - Turnover in retail trade 100 o SE != 90 S2 80 70 X «u "O .f^ 60 (S 50 40 £= O Š 30 Source: SORS; calculations by IMAD. Table 3: Selected monthly indicators of economic activity in Slovenia in % 2012 XI 13/ X 13 XI 13/ XI 12 I-XI 13/ I-XI 12 Exports1 1.9 -6.8 -1.1 2.2 -goods 0.8 -6.1 -1.1 1.7 -services 6.7 -9.6 -1.2 4.2 Imports1 -2.6 -3.6 4.3 -1.4 -goods -3.0 -3.0 4.3 -1.7 -services -0.1 -7.5 3.9 0.6 Industrial production -1.1 0.12 2.63 -1.03 -manufacturing -2.3 0.62 2.93 -1.63 Construction -value of construction put in place -16.8 9.62 30.83 -3.43 Real turnover in retail trade -2.3 0.42 -0.63 -3.53 Nominal turnover in market services (without trade) -2.8 0.32 3.13 -0.23 Sources: BS, Eurostat, SURS; calculations by IMAD. Notes: 1balance of payments statistics, ^seasonally adjusted, 3working-day adjusted data. In the second half of the year merchandise exports were picking up, while merchandise imports declined slightly, both being up year-on-year in the first eleven months. Merchandise exports in the first eleven months of 2013 were up 2.4% on the same period of 2012 (orig.). Broken down by products, they were mainly driven by growth in exports of chemical (primarily medical and pharmaceutical) and primary products (in particular oil). A significant contribution to the increase in year-on-year growth also came from growth in road vehicle exports, which were declining in 2012. In our estimation, the latter can mostly be explained by stronger international activity of Slovenian passenger car dealers, as data on the manufacture of motor vehicles remained negative.4 4 In the first eleven months of 2013 the manufacture of motor vehicles was down 11.5%: sales revenues abroad were down 11.3% and sales revenues on the domestic market down 8.5%. In contrast, exports were up 3.1% In November real merchandise exports and imports declined according to our estimate, seasonally adjusted.5 After the pick-up in the summer months, growth in real merchandise exports eased somewhat in the autumn. The latter is a consequence of weaker growth in exports to the EU amid an otherwise slower decline in extra-EU exports. A breakdown by products shows that total growth slowed mainly as a result of the less favourable dynamics of exports of the above-mentioned products, i.e. a decline in exports of chemical products and weaker growth in exports of primary products. Growth in real merchandise imports has also eased slightly in recent months, but merchandise imports in the first eleven months of 2013 were nevertheless still somewhat larger than in the same period of the previous year (0.5%, orig.). Figure 9: Merchandise trade - real -Exports - -Imports Source: SURS; calcualtions by IMAD. Figure 10: Trade in services - nominal -Exports -Imports E ^^ Source: BS; calcualtions by IMAD. year-on-year in the ten months for which data are available. 5 The estimate of real merchandise exports is based on nominal exports according to the external trade statistics and industrial producer prices on the foreign market, while real imports have been estimated on the basis 110 95 90 85 80 75 70 Box 1: Real estate market - Q3 2013 In the third quarter the number of dwelling transactions declined further, recording the lowest level since 2008. According to SURS data, the number of all dwelling transactions (in newly built and existing flats and family houses) declined to 903, being approximately a third lower (orig.) than in the previous quarter. It was a third lower year-on-year, and 63.9% lower than the peak in 2007. The most transactions were in existing flats (477), but their number more than halved relative to the second quarter (orig.). Transactions in other dwellings also declined. Their number was also down relative to the third quarter of 2012, with the exception of the sale of newly built flats, which was, according to SURS data, decisively influenced by the sale of flats from the bankruptcy estate of construction companies in Ljubljana. Prices of dwellings dropped in the third quarter and were at the lowest level after the2008 highs. With the decline in transactions, prices of dwellings fell by 4% in the third quarter (orig.) according to the provisional data by SURS1 (6% year-on-year and nearly a fifth from the 2008 peak), which was a consequence of lower prices of new dwellings, as prices of existing dwellings remained at the same level as in the second quarter (orig.). Among new dwellings, prices of newly built flats dropped the most (down 15.1%), being around a quarter lower than in 2008, while among existing dwellings, only prices of existing flats in Ljubljana declined. These prices were also farthest below the levels recorded in 2012 (by a tenth) and 2008 (by 22.9%). After a decline in 2012, prices of existing flats in other parts of Slovenia increased again in 2013. In the third quarter they were only 5.1% lower (orig.) than in 2008. Figure 11: Transactions in existing and newly built flats and houses -Transactions in existing flats -Transactions in newly built fats ■ Transactions in existing houses 160 140 120 ----Transactions in new houses Figure 12: Prices of existing and newly built flats and houses -Prices in existing flats - Prices in newly built fats ■ Prices in existing houses ---Prices in new houses a a a a Source: SURS; calculations by IM AD. a a a a a Source: SURS; calculations by IMAD. 1 Because the Tax Administration experienced technical problems in the renovation of its information system for capturing data on transactions, SURS did not receive data on the prices of existing family houses in the third quarter of 2013. As total residential housing price index cannot be calculated without these data, SURS temporarily imputed the data from the second quarter of 2013. Having declined since April, nominal exports of services rose in November, while services imports declined for the second consecutive month (seasonally adjusted) after three-quarter growth.6 In the first eleven months total exports were up 4.2% (orig.) year-on-year, mainly on the back of exports of intermediation and construction services. After having increased in the third quarter, nominal imports of services dropped for the second month in row in November, primarily due to smaller imports of transport services. In the first eleven months of 2013 they were up slightly compared with the same period of 2012 (0.6%, orig.) chiefly owing to larger imports of construction services. of nominal imports according to the external trade statistics and the index of import prices. 6 According to the balance of payments statistics. Total growth was dragged down by imports of licences, patents and copyrights and travel, which were lower year-on-year. In the first eleven months of 2013 industrial production in manufacturing remained lower than in the same period of 2012 despite growth in the last few months. In November high-technology production rose again, while low-and medium-low-technology production remained unchanged, seasonally adjusted. In the first eleven months of 2013 all low-technology industries recorded lower production than in the same period of 2012 (except the leather industry). The largest declines were in the textile, furniture and wood-processing industries, which are farther away from the 2008 production levels than 100 80 60 40 Figure 13: Production volume in manufacturing industries according to technology intensity -----Low-technology industries —""— Medium-low-technology industries - Medium-high and high-technology industries 105 100 95 80 70 Source: SURS; calculations by IMAD. other low-technology industries (the textile and furniture industries by more than half, the wood-processing industry by over a third). In the first eleven months of 2013 production was also down year-on-year in most medium-low-technology industries (with the exception of the sector of repair and installation of machinery and equipment, and the metal industry) and more technology intensive industries (except for the chemical and pharmaceutical industry). The value of construction put in place rose in November last year (by 9.6%, seasonally adjusted), being substantially higher than in the same month of 2012 (30.8%). Amid significant monthly fluctuations that are typical for construction activity, November's increase was the third in a row; in three months alone the value of construction output surged by 29.2%, mainly as a result of an increase Figure 14: Value of construction put in place -----Residential buildings -Non-residential buildings ---------Civil-engineering works in civil-engineering works related to the vigorous construction of municipal infrastructure boosted by EU funds. Recent months have also seen more vigorous activity in the construction of buildings, which we estimate is related to favourable weather conditions, which facilitated completion of works that might have otherwise been distributed over several months. The value of the stock of contracts in November was also much larger than a year earlier. In year-on-year terms it was up 36.6%, of which by as much as 83.0% in the construction of civil-engineering works (for the same reasons as stated above). Data on business tendencies in construction also reveal a relatively favourable picture; in January 2014 the confidence indicator in construction was up 4 percentage points on December 2013 and up 14 percentage points on January 2013. In November turnover in retail trade remained low, while turnover in the sale of motor vehicles and wholesale trade rose again and was higher than in the months before the VAT rate increase (seasonally adjusted). Having declined in the third quarter, real turnover in retail trade rose slightly in the next two months but remained very low. Only turnover in non-food products was up in November amid higher sales of textile, clothing and footwear, while turnover in food products and automotive fuels declined. After the significant decline following the increase in VAT rates in July, turnover in the sale and repair of motor vehicles has been growing in the following months, being a tenth higher year-on-year in November due to higher sales of new cars to legal entities.7 Nominal turnover in wholesale trade also rose in November for the second consecutive month, being already higher than before the VAT rates increase. Figure 15: Turnover in trade sectors -Retail trade, real ----- of which automotive fuels, real -----Sale, repair of motor vehicles, real -Wholesale trade, nom. Source: SURS; calculations by IMAD. 7 In November 2013 the number of first passenger car registrations was up 4.6% and in the first eleven months up 4.2% in year-on-year terms. Sales to legal entities rose, while sales to natural persons declined. Based on some indicators, we could estimate that the majority of cars sold are exported (see also Merchandise exports, page 5). 90 85 75 65 Box 2: (In)solvency At the end of 2013 the number of insolvent business entities remained at the same level as at the end of last year, but it rose again in 2013 overall. The situation of companies1 and sole proprietors2 deteriorated significantly during the crisis. According to AJPES records, 16,053 legal and natural persons had outstanding matured liabilities for more than five consecutive days in a month last year,3 which is 13% more than a year before. The average monthly amount of outstanding liabilities by legal entities was EUR 748 m (9.6% more than a year earlier), while the average monthly amount owed by natural persons totalled EUR 145 m (20.8% more than a year earlier). Two thirds of legal entities with outstanding liabilities were in the sectors of construction and trade (20% in each), manufacturing, and professional, scientific and technical activities (13% in each). The largest average daily amounts of these liabilities were recorded in construction (EUR 178 m), manufacturing, trade and financial and insurance activities (over EUR 100 m). Figure 16: Legal entities with outstanding matured liabilities for more than five consecutive days in a month and the average daily amounts of outstanding matured liabilities, 2008-2013 ^^■Average no. of legal entities with outstanding matured liabilities (left axis) -Average daily amount of outstanding matured liabilities, EUR m (right axis) 700 600 500 c 400 : 300 200 100 0 Figure 17: Average number of legal entities with matured outstanding liabilities, 2008-2013 3,000 2,500 2,000 1,500 1,000 I Up to 3 months ■ From 3 months to 1 year ■ Over 1 year 2008 2009 2010 2011 2012 2013 So u rce: AJPES; calculations by I MAD. a a a Source: AJPES. Table 4: Legal entities with outstanding matured liabilities for more than five consecutive days in a month, December 2013 Activity No. of legal entities with outst. matured liabilities Growth in % Average daily amount of outst. matured liabilities, in EUR '000 Growth in % Average daily amount of outst. mat. liab. per legal entity, in EUR '000 XII 13/ XII 12 I-XII 13/ I-XII 12 XII 13/ XII 12 I-XII 13/ I-XII 12 C Manufacturing 841 -3.3 16.2 105,582 13.3 43.9 126 F Constrution 1,417 -0.6 14.6 175,023 2.7 -6.5 124 G Wholesale and retail trade, repair of motor vehicles and motorcycles 1,389 -4.9 8.5 91,449 -27.2 7.5 66 H Transportation and storage 372 -8.4 5.6 33,052 14.3 -10.5 89 I Accommodation and food service ctivities 593 12.3 19.4 39,991 68.0 69.5 67 K Financial and insurance activities 115 9.5 14.3 102,046 39.2 88.2 887 L Real estate activities 220 -7.2 14.1 43,851 20.2 10.4 199 M Professional, scientific and technical activities 887 -1.8 18.9 74,459 -1.9 -26.4 84 N Administrative and support service activities 228 0.4 21.9 16,028 -32.6 -6.8 70 Other activities (A,B,D,E,J,O-S)' 893 -5.9 12.4 71,262 31.4 -3.3 80 Total 6,955 -2.2 13.8 752,743 6.7 9.6 108 Source: AJPES. 1 These generate around half of all value added. 2 Sole proprietors and own-account workers. 3 AJPES records include outstanding matured liabilities for more than five consecutive days in a month according to writs of execution and tax debt, excluding other outstanding liabilities (unpaid bills between creditors and debtors). 0 The problem of insolvency is deepening from year to year. The number of non-payers and the amounts of unpaid liabilities are rising, and payment periods increase. Compared with 2008, when an average of 2,902 entities owed around EUR 104 m per day (24.8% up to 3 months, 34.5% from 3 months to 1 year, and 40.7% over 1 year), the number of debtors rose to 7,032 in 2013, while their outstanding amounts surged to EUR 748 m (8.0% up to 30 days, 24.3% from 30 days to 1 year, and 67.6% over 1 year). As a result of new legislation,4 the number of bankruptcy proceedings5 initiated against legal entities doubled in the second half of the year. Compared with 2012, 49.5% more bankruptcy proceedings and 35.7% more compulsory settlement proceedings were filed against legal entities in 2013, and 20% less personal bankruptcy proceedings against sole proprietors. A total of 484 legal entities were deleted from the register of companies due to insolvency3 and, consequently, bankruptcy (a third more than in 2012), and 52 sole proprietors (a third less than in 2012). A quarter of all bankruptcy proceedings started against companies and co-operatives were in trade, maintenance and repair of motor vehicles, a fifth in the construction sector and over a tenth in manufacturing and professional, scientific and technical activities. Overall, 90% of all bankruptcy proceedings against sole proprietors were filed in the sectors of accommodation and food service activities, transportation and storage, manufacturing, trade and construction. Figure 18: Average monthly amount of outstanding liabilities by legal entities, 2008-2013 300 E 200 100 I Up to 3 months ■ From 3 months to 1 year ■ Over 1 year Figure 19: Bankruptcy proceedings initiated against companies and co-operatives and sole proprietors in Slovenia, 2009-2013 Bankruptcy proceedings against legal entities (left axis) -Personal bankruptcies against sole proprietors (right axis) 35 2008 2009 2010 2011 2012 Source: AJPES; calculations by IMAD. 2013 15Z 10 a a a a a Source: AJPES - Business Register of Slovenia. 4 Act Amending the Financial Operations, Insolvency Proceedings and Compulsory Dissolution Act (ZFPPIPP), Official Gazette of the RS, No. 47/2013. The new act sped up the bankruptcy proceedings to prevent attrition of insolvent debtors. 5 Bankruptcy proceedings are a form of winding-up an over-indebted or insolvent debtor. Under court supervision, bankruptcy proceedings are administered by the bankruptcy trustee, who liquidates the entire debtor property to obtain financial assets for settling creditor claims. Upon completion of bankruptcy proceedings, the legal entity is deleted from the court register. 6 Insolvency is the situation where a debtor, in a longer period, can no longer meet its financial obligations that became due (permanent illiquidity), or becomes unable to cover its financial obligations in the long term. Although it had mostly been growing in 2013, nominal turnover in market services (excluding trade)8 was still slightly lower year-on-year in the first eleven months of the year. Last year turnover recorded the steadiest growth in accommodation and food service activities, where it increased the most of all main sectors in November relative to the first half of the year. Turnover in transportation rose slightly less but remains high, in the last months also owing to increased rail transport. In professional-technical services November's turnover was also slightly higher 8 Activities from H to N (SKD 2008) subject to the Council Regulation (EC) No. 1165/98 concerning short-term statistics. than in the first half of the year, being down considerably in legal-accounting and up significantly in architectural-engineering services, which is related to the more vigorous activity in the construction sector. Turnover in information-communication services and administrative and support service activities was lower than in the first half of the year. In the former it declined particularly in the sector of computer programming, while in the latter it shrank in most sectors except employment services, where it rose significantly (exceeding the pre-crisis level by almost a quarter). 30 25 20 5 0 0 Figure 20: 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) 105 ?S 90 \ A- ...... ............./V \ \ V Source: SURS; calculations by IMAD. Last year household income declined further, while households were repaying loans and reducing deposits at banks. The net wage bill was down 3.3% in real terms in the year as a whole (2012: -3.2%), while social transfers9 in the first eleven months were down 2.7% in real terms year-on-year (in the same period of 2012: -4.7%). Households repaid EUR 349 m in bank loans last year, of which EUR 269 m net in consumer loans, and took out half less housing loans net than a year earlier. Household deposits in banks shrank by over EUR 460 m. All types of deposits declined, particularly short-term deposits (by EUR 328 m). The values of short-term indicators of household consumption dropped further in 2013. In the first eleven months, turnover in retail trade excluding automotive fuels was 3.6% lower in real terms year-on-year, while turnover in stores selling durable goods10 was 8.2% lower. The number of first passenger cars registrations by natural persons was down 17.6% on the previous year and down almost 40% on 2008.11 In January 2014 consumer expectations improved slightly, but consumers remained very pessimistic regarding major purchases in the future. -Road transport (left axis) -Rail transport (right axis) 1,000 Box 3: Road and rail freight transport - Q3 2013 Both freight transport categories recorded growth in the Figure 21:The volume of road and rail freight transport third quarter of 2013, with road freight transport still lagging behind, and rail transport already exceeding, the highest levels in the previous few years. Road freight transport rose by 3.5% (seasonally adjusted), which interrupted its downward trend. International transport increased in particular, being also up 4.4% in year-on-year terms. Within that, transport of goods out or into Slovenia declined by 0.7%,1 while transport of goods abroad (where transport is carried out entirely in foreign countries) was up 11.7% and accounted for as much as 44% of total international transport.2 The increase in the last few years was, in our estimation, a result of faster economic recovery in other countries (the majority of shipments being performed between Austria, Germany and Italy) amid the still weak activity at home, which was a business opportunity for our carriers. Transport abroad otherwise increased rapidly particularly after Slovenia's accession to the EU (in 2012 this type of transport was already eight times larger than in 2003), which eliminated many administrative barriers such as permits, customs duties, etc. National transport declined after substantial growth in the second quarter (seasonally adjusted), but remained almost unchanged year-on-year. Rail freight transport rose by as much as 9.9% in the third quarter (seasonally adjusted), being also up more than a tenth relative to 2008, to a large extent due to better performance of the domestic carrier, which significantly increased the volume of shipments in 2013.3 4,300 4,200 4,100 J>. 4,000 iS 3,900 != 3,800 3,700 3,600 3,500 3,400 a a a a a So u rce: SURS; calculations by I MAD. 1 The structure of these shipments by country has changed in particular in year-on-year terms. Transport between Slovenia and Italy and France was down by around 18%, while transport between Slovenia and Austria and Germany was up by the same percent. Slovenia's external trade with the former two countries dropped by a few percent, while its external trade with the latter two increased. 2 Having risen from 11% to 38% between Q3 2001 and Q3 2008, the share of goods transported abroad continued to grow during the crisis. 3 The Slovenian railway company, which still accounts for the majority of freight transport by rail and expects net profits again in 2013 (estimated at EUR 16.5 m), reported an increase in the volume of freight transport of more than 10% (in tonne km), meaning that rail freight transport also increased in the last quarter. 9 According to the consolidated public finance balance of the Ministry of Finance. Since May 2013 expenditure on scholarships has been covered from direct government funds or reserves. The total amount of transfers is therefore slightly smaller. 10 Turnover in the sale of furniture, construction material, household appliances, audio/video recordings in specialised stores. 11 The number of first registrations of passenger cars used by natural persons was down 8.1% (the owner of a car used by a natural person can also be a legal entity, for example in the case of leasing). 95 85 80 75 Figure 22: Household consumption indicators 110 ; 100 90 - No.of first passenger car registrations by natural persons (left axis) ■ Net wage bill (left axis) - Turnover in stores selling durables (left axis) -Consumer confdence indicator, seasonally adj. (right axis) 80 c^- 70 o 60 50 40 30 'x ______ W' 1 A (V-.......r..........i 1 i..........i............J. ...............i ............. i 1 i i ' 1 s ; .........I. A 1 /« i 1 i 1 I I i/ \ ' k"" ............ ■ \ 10 0 -10 -20 -30 -40 -50 -60 -70 Source: SURS, MZIP; calculations by IMAD. Economic sentiment and confidence among consumers improved at the beginning of2014. Having stagnated in the second half of 2013, in January the economic sentiment indicator reached the highest level since October 2011. Confidence, which otherwise fluctuates markedly, improved most in retail trade after the significant decline in November. Figure 23: Business trends - Economic sentiment Retail trade - Construction - Manufacturing - Service activities Consumers 30 ra 20 r.^ -10 ■i^ -20 -30 [j -40 -50 -60 / 1 : ^......-V'—f— i... l / -AW'' rJ -AH y vi ... ... -..i........IK^' .....a..........'Lr.!.. --v — !.............T I I — I............'...... \ , i i Source: SURS; calculations by IMAD. Labour market The number of persons in employment12 has been stagnant ever since April 2013, seasonally adjusted. At the beginning of 2013 it dropped notably (due to increased retirement before the tightening of the conditions with the new pension reform, and an extremely large number of persons whose fixed-term contracts expired), and then remained basically unchanged since the spring. The number of employed persons has been rising modestly in particular in construction (until October) and market services, while in manufacturing it has declined slightly again relative to the beginning of the year. In the first Figure 24: Employed according to the statistical register of employment (SRE) and registered unemployed -Employed according to the statistical register (left axis) -Registered unemployed (right axis) Source: SURS, ESS; calculations by IMAD. Figure 25: Inflow into the unemployment register by reason of registration ■ Other (left axis) ■ Bankruptcy or business reasons (left axis) ■ Termination of a fixed-term contract (left axis) ■ First-time jobseekers (left axis) A No. of registered unemployed (right axis) 18 16 14 12 o o £3 10 cD 8 D Z 6 4 2 0 A^A A 130 .V- 125 120 115 110 f? 105 äE 100 i? 95 90 85 Source: ESS. 12 According to the Statistical Register of Employment (SRE); these are employed and self-employed persons excluding self-employed farmers. 40 10 0 Table 5: Employed persons by activity Number in '000 Change in Number 2012 XI 12 X 13 XI 13 2012/ 2011 XI 13/ X 13 XI 13/ XI 12 I-XI 13/ I-XI 12 Manufacturing 182.9 181.2 178.1 178.3 -1,919 238 -2,835 -5,585 Construction 59.8 58.1 56.1 55.8 -8,047 -390 -2,333 -5,913 Market services 338.4 336.7 334.3 334.5 -3,805 207 -2,187 -5,742 -of which: Wholesale and retail trade, repair of motor vehicles and motorcycles 107.8 107.2 103.8 104.1 -1,848 279 -3,166 -3,751 Public services 171.6 171.5 170.4 170.8 1,438 406 -654 -1,620 Public administration and defence, compulsory social security 50.7 50.2 48.8 49.0 -650 195 -1,145 -1,632 Education 65.5 65.6 65.7 65.8 778 160 282 -111 Human health and social work activities 55.4 55.7 55.9 55.9 1,311 51 209 122 Other 57.3 57.6 59.1 58.9 -1,632 -193 1,239 1,111 Source: SURS; calculations by IMAD. eleven months of 2013 employment dropped by 2.5% on the same period of 2012. The number of registered unemployed rose substantially at the end of 2013 and early this year. After the surge at the beginning of 2013, when the inflow of persons who had lost fixed-term employment was larger than typical for this time of the year,13 growth in registered unemployment slowed, only to increase more strongly again in December (by 0.6%, seasonally adjusted). A total of 124,015 persons were unemployed at the end of December, the increase being a result of a small number of those who had found work14 and a further increase in the inflow due to the Table 6: Indicators of labour market trends in % 2012 XI 13/ X 13 XI 13/ XI 12 I-XI 13/ I-XI 12 Labour force -1.5 0.1 0.1 -0.8 Persons in formal employment -1.7 0.1' -0.8 -2.2 Employed in enterprises and organisations and by those self-employed -1.6 0.0 -1.4 -2.7 Registered unemployed -0.5 0.4^ 7.0 9.1 Average nominal gross wage 0.1 0.1' 0.3 -0.2 - private sector 0.5 0.3^ 1.3 0.5 - public sector -0.9 -5.9- -1.2 -1.3 -of which general government -2.2 -0.2^ -1.3 -2.6 2012 XI 12 X 13 XI 13 Rate of registered unemployment (in %), seasonally adjusted 12.0 12.2 13.0 13.1 Average nominal gross wage (in EUR) 1,525.47 1,611.93 1,526.11 1,617.19 Private sector (in EUR) 1,395.84 1,513.79 1,408.28 1,533.94 Public sector (in EUR) 1,762.88 1,791.83 1,742.91 1,771.14 -of which general government (in EUR) 1,761.15 1,743.23 1,709.96 1,720.04 Sources: ESS. SURS; calculations by IMAD. Note: 1seasonally adjusted. 13 In our estimation, this was as a consequence of the still-low level of economic activity and modest expectations about the recovery, because of which companies did not extend the contracts that had expired at the end of 2012. 14 December's total outflow from the register was the smallest total Figure 26: Outflow from registered unemployment by reason of de-registration Other (left axis) ■ Breaches of regulations ■ Subsidised employment (left axis) ■ Regular employment (left axis) ▲ No. of registered unemployed (right axis) 120 110 £3 100 .fE 90 80 70 ^t - Č3 ^^ Source: ESS. termination of fixed-term contracts (in the construction sector, in particular). In 2013 unemployment averaged 119,827 persons, 8.8% more than in 2012. The inflow into the unemployment register was up 1.4% relative to 2012, mainly due to a larger number of first-time jobseekers15 (up 2,799 persons or 17.2%). The total number of firsttime jobseekers was largest since 2005. The outflow from the unemployment register was also up slightly in 2013 (0.8%) because more people had found work (6,730 or 11.5%), mainly as a consequence of subsidised employment (3,518 or 30.8%). On the other hand, there were fewer breaches of regulations and fewer transitions into inactivity. The number of unemployed also rose notably in January 2014 (by 0.6%, seasonally adjusted), 129,843 persons being registered as unemployed at the outflow since 2009, while the outflow into employment was the second smallest outflow into employment since 2009. 15 Particularly young people (15-29 years) seeking their first job. An average of 13,621 young first-job seekers were registered last year, almost double the figure in 2008. 10 8 6 4 2 0 Table 7: Unemployment flows I-XII 11 I-XII 12 I-XII 13 INFLOW OF UNEMPLOYED - TOTAL 99,674 106,858 108,344 Jobseekers who lost work 14,391 16,272 19,071 bankruptcy of the company 82,150 90,330 88,710 business reasons or compulsory settlement 7,812 4,609 3,732 termination of fixed-term contracts 16,096 20,130 17,896 other reasons 45,154 50,911 54,004 First-time jobseekers 13,088 14,680 13,078 Other (transitions between records) 3,133 256 563 OUTFLOW OF UNEMPLOYED - TOTAL 96,941 101,551 102,390 Unemployed who found work 61,019 58,324 65,054 public works 1,341 3,724 5,423 self-employment 5,520 4,195 5,789 Transitions into inactivity 14,858 15,015 13,295 retirement 9,718 10,523 8,511 Breaches of regulations 13,576 19,495 14,772 Other (transfer to other registers, other) 7,488 8,717 9,269 end of the month, the highest figure since 1998. The outflow from the register being as usual at this time of the year, the increase was a result of a further rise in the inflow of unemployed, mainly because even more people had lost work due to the termination of fixed-term contracts.16 The number of first-time jobseekers was also slightly larger than usual in this period. The average gross earnings per employee remained almost unchanged in November (0.1%, seasonally adjusted; 0.3% year-on-year). In the private sector,17 where they Table 8: Earnings by activity have been rising in recent months after one year and a half of stagnation,18 they rose again month-on-month in November19 while dropping considerably in the public sector. With only a slight decline in the general government sector, which constitutes the largest part of the public sector, this was primarily a consequence of the sharp fall (-15.0%, seasonally adjusted) in the average gross earnings in public corporations,20 which recorded considerably lower 13'h month payments and Christmas bonuses than a year earlier (-30.4%).21 The year-on-year growth in public corporations in the first eleven months of 2013 was nevertheless still above average (1.8%). Gross earnings in the private sector also remained up year- Figure 27: Average gross earnings per employee -Total Private sector - Public sector -of which, general government sector ---- -of which, public corporations ^^ is ^^ Source: SURS. Gross wage per employee, in EUR Change, in % 2012 XI2013 2012/2011 XI 13/X 13 XI 13/XI 12 I-XI 13/ I-XI 12 Private sector activities (A-N; R-S) 1,463.64 1,597.42 0.8 7.9 0.8 0.6 Industry (B-E) 1,444.29 1,666.56 2.5 11.6 3.5 2.6 - of which manufacturing 1,397.25 1,621.33 2.5 12.5 4.4 2.7 Construction 1,205.65 1,203.04 -2.5 -0.7 -2.5 -1.5 Traditional services (G-I) 1,354.04 1,462.24 0.3 7.3 0.1 -0.1 Other market services (J-N;R-S) 1,713.36 1,778.23 -0.3 5.4 -1.9 -1.3 Public service activities (O-Q) 1,710.91 1,676.25 -2.2 0.8 -1.0 -2.4 - Public administration and defence, compulsory social security 1,752.03 1,730.09 -1.8 -0.1 -1.0 -1.4 - Education 1,676.80 1,624.59 -3.3 0.5 -1.4 -3.5 - Human health and social work activities 1,712.37 1,689.07 -1.3 2.1 -0.4 -2.0 Source: SURS; calculations by IMAD. 16 The second largest inflow due to the expiration of fixed-term contracts since 2008 (a slightly larger inflow was recorded only in January 2013). 17 Starting June 2012, we comment on data on earnings in the private sector and the public sector (within the latter, particularly in the general government sector), and only exceptionally on earnings in private sector activities and public service activities; for more see SEM 06/12, Selected Topics - Monitoring the movements of wages and wage earners in the public and private sectors. 18 Previously (in 2010 and 2011), growth was mainly impacted by the increase in the minimum wage and changes in employment structure. 19 Also due to somewhat higher extraordinary payments than a year earlier. 20 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. 21 In November 2012 extraordinary payments disbursed with November's wage (such as 13th month payments and Christmas bonuses) declined by 41.2% year-on-year; in November 2011 by 35.0%. on-year. The increase in the first eleven months of 2013 stemmed only from private non-financial companies (0.7%), as gross earnings in private financial corporations dropped year-on-year (-1.3%). In the comparable period, Box4: Extraordinary year-end payments gross earnings were also down in most activities (besides construction, particularly in most service activities). Only in industry they increased year-on-year (2.6%), by a similar percentage as a year earlier. November's extraordinary payments,1 which should reflect company performance in the current year, were similar to 2012. A total of EUR 62.6 m was disbursed, mainly in 13'h month payments and Christmas bonuses. This is only 0.6% less than in 2012 and the least in the last nine years, half less than in 2007 when these payments were highest (EUR 126.2 m). The number of employees who received them was also almost half lower (2013: 89 thousand; 2007: 165 thousand). Compared with November 2012, a somewhat smaller share of employees (14.1%) received a 17.2% larger amount, on average. Higher amounts were paid particularly by non-financial corporations (both public and private). In comparison with a year earlier, extraordinary year-end payments were up 4.7% in the private sector, and down 25.1% in the public sector. As usual, the majority of these payments were in the private sector (EUR 54 m). Private non-financial corporations increased the amount of funds allocated for this purpose by EUR 53 m or 6.5% compared with a year earlier. In private financial corporations, where wage growth has been rapidly slowing since the beginning of the crisis (and was even negative in the last two years), the average amount of extraordinary year-end payments and the share of employees who received them were reduced considerably relative to the previous year, so that the total amount of extraordinary payments was down 38.8% year-on-year. In public corporations it was just the opposite; financial corporations allocated 2.6% more, and non-financial corporations 39.8% less funds for extraordinary payments than in 2012. A breakdown by activity shows that most activities paid lower extraordinary payments than a year earlier, which was, to a large extent, offset by higher payments in manufacturing. Table 9: November's extraordinary payments by activity, 2008-2013 Gross extraordinary payments for employees who received extraordinary payments, in EUR Share of employees who received extraordinary payments, in % Total amount of extraordinary payments, in EUR m 2008 2012 2013 2008 2012 2013 2008 2012 2013 TOTAL 697.58 597.37 699.95 19.9 16.5 14.1 98.3 63.0 62.6 A Agriculture, forestry and fishing 729.21 504.68 562.64 24.1 27.4 24.2 0.8 0.5 0.5 B Mining and quarrying 148.78 745.21 753.99 56.6 58.0 7.3 0.3 1.1 0.1 C Manufacturing 517.62 767.48 831.54 25.0 20.9 21.9 25.2 25.9 29.2 D Electricity, gas and steam supply 1.323.39 645.72 478.93 83.0 53.6 55.4 8.4 2.7 2.1 E Water supply sewerage, waste management and remediation activities 865.44 546.57 531.31 42.4 21.1 19.4 3.1 1.0 0.9 F Constrution 576.06 679.54 568.56 13.8 4.5 3.5 4.6 1.1 0.7 G Wholesale and retail trade, repair of motor vehicles and motorcycles 673.92 476.12 871.69 16.7 26.8 15.1 11.1 11.3 11.3 H Transportation and storage 528.00 560.79 1.174.59 53.5 28.7 9.2 10.6 5.3 3.5 I Accommodation and food service activities 620.34 492.51 270.68 7.8 7.7 10.0 1.0 0.7 0.5 J Information and communication 1.020.06 1.439.23 518.64 29.8 8.1 18.1 6.2 2.3 1.9 K Financial and insurance activities 1.331.02 736.20 661.32 56.9 27.6 26.6 17.9 4.4 3.7 L Real estate activities 991.40 736.45 1.116.16 19.5 16.5 13.1 0.7 0.4 0.5 M Professional, scientific and technical activities 1.010.15 780.52 871.95 17.1 13.5 13.7 5.8 3.7 4.3 N Administrative and support service activities 300.68 420.18 501.82 21.4 11.6 12.5 1.6 1.1 1.4 O Public administration and defence, compulsory social security 9.69 26.94 7.3 5.3 0.0 0.1 P Education 36.66 72.77 4.8 6.9 0.1 0.3 Q Human health and social work activities - 163.80 321.76 - 7.6 5.3 - 0.6 0.8 R Arts, entertainment and recreation 332.18 539.65 495.40 15.9 6.6 10.4 0.5 0.3 0.5 S Other service activities 1.287.78 602.02 1.018.20 8.9 7.4 2.4 0.6 0.2 0.1 1 Extra payments are payments on a basis other than a regular monthly wage, such as 13th month payments, Christmas bonuses, performance-related payments, etc. Source: SURS. Figure 28: November's extraordinary payments and wage growth Average gross amount of extraordinary payments*, in EUR (right axis) • Monthly growth in gross earnings per employee, in % (left axis) ■ Share of employees who received payments, in % (left axis) 2^ I-^-^-^-^-^-^-^-^-!-!-!-!-!- 900 Source: SORS. Note: *For employees who received extraordinary payments. Figure 29: November's extraordinary payments by sector 60 50 ZD D m -a C C .:= CU C äE 30 12008 2012 12013 Private non-Public non- Public Private General financial financial financial financial government corporat. corporat. corporat. corporat. sector Source: SURS. Prices The modest price growth in 2013 (0.7% year-on-year in December) was marked primarily by changes in taxation. As in 2012, price growth was impacted by tax policy measures (increase in VAT rates, excise duties and other taxes), which contributed 0.8 percentage points22 to last year's inflation according to our estimate, which is slightly less than in 2012 (1.0 percentage points due to the ZUJF). Despite a fairly similar contribution of tax changes, inflation in Figure 30: Growth in selected price groups in Slovenia and in the euro area in 2013 (HICP) Source: Eurostat. Note: *HICP at constant tax rates. Slovenia was substantially lower than a year earlier (2.7%) mainly due to the continuation of weak economic activity in the domestic and international environments. Had taxes and excise duties been left unchanged, inflation in Slovenia would have been much lower. Inflation as measured by the HICP in Slovenia (0.9%) was similar to that in the euro area (0.8%). Domestic price growth was marked primarily by higher prices of food and energy. Food price growth was down (2.2%) on 2012 as a result of lower growth in non-processed food prices. Energy prices rose by 1.4% in Slovenia (in the euro area they remained the same as in 2012) and were, as in the euro area, mainly a consequence of higher electricity Figure 31: Year-on-year inflation rates in euro area countries in 2012 and 2013 (HICP) 0 22 The impact of tax changes was calculated assuming a limited pass-through of the impact of changes in tax rates on the price paid by the consumer. Source: Eurostat; calculations by IMAD.*Note: Data on 2013 year-on-year growth for Ireland not available yet. 40 20 10 0 4 2012 3 2 o 1 -1 -2 Table 10: Breakdown of HICP in sub-groups - December 2013 Slovenia Euro area Cum. % Weight % Contribution in p.p. Cum. % Weight % Contribution in p.p. Total HICP 1.0 100.0 1.0 0.9 100.0 0.9 Goods 0.7 65.7 0.5 0.9 57.7 0.5 Processed food, alcohol and tobacco 2.4 16.1 0.4 1.8 12.0 0.2 Non-processed food 2.3 7.4 0.2 1.5 7.3 0.1 Non-energy industrial goods -0.8 27.9 -0.2 0.5 27.4 0.1 Durables -2.1 9.7 -0.2 -0.8 8.8 -0.1 Non-durables 0.9 8.8 0.1 1.2 8.0 0.1 Semi-durables 0.5 9.4 0.0 2.3 10.5 0.2 Energy 1.6 14.4 0.2 0.2 11.0 0.0 Electricity for households 12.5 2.7 0.3 4.7 2.6 0.1 Natural gas 0.8 1.1 0.0 -0.8 1.8 0.0 Liquid fuels for heating -1.4 1.5 0.0 -3.6 0.9 0.0 Solid fuels 5.0 0.9 0.0 2.2 0.1 0.0 District heating -2.6 0.9 0.0 0.1 0.6 0.0 Fuels and lubricants -1.7 7.4 -0.1 -1.4 5.0 -0.1 Services 1.2 34.3 0.4 1.1 42.3 0.5 Services - dwellings 5.9 3.0 0.2 1.8 10.3 0.2 Services - transport 4.1 5.8 0.2 1.6 7.2 0.1 Services - communications -1.6 3.5 -0.1 -3.4 3.1 -0.1 Services - recreation, repairs, personal care 1.0 13.9 0.1 1.5 14.7 0.2 Services - other services -0.6 8.1 0.0 0.4 7.1 0.0 HICP excluding energy and non-processed food 0.8 78.2 0.6 1.0 81.7 0.8 Source: Eurostat; calculations by IMAD. Note: ECB classification prices and lower prices of fuels for transport and heating. In Slovenia energy prices made a larger contribution to total growth (0.2 percentage points) than in the euro area due to higher rises in electricity prices and a larger share of fuels for transport and heating in the structure of household consumption. Alongside food and energy price rises, Slovenia's inflation was also influenced by growth in prices of services (1.3%), which was slightly stronger than in the euro area. On the other hand, prices of non-energy industrial goods declined in Slovenia, unlike those in the euro area. In 2013 inflation was down relative to the previous year across the entire euro area. According to Eurostat's flash estimate, January's inflation in the euro area stood at 0.7%. Industrial producer prices recorded by domestic producers on the domestic and foreign markets declined in 2013 compared with the previous year. Lower prices on the domestic market mainly reflected price movements in the manufacture of food products, where last year price growth was falling, so that prices were down year-on-year at the end of the year (-0.5%). The year-on-year decline in prices on the domestic market was impacted by a further fall of prices of metals and metal products (-2.3%), which, in addition to lower prices in the manufacture of ICT and electrical equipment also contributed to the decline on foreign markets (-0.7%). Figure 32: Movements of domestic industrial producer prices on the domestic and foreign markets -PPI (domestic market) -----Mfrof basic metals,fabric.metal prod.,exc.mach.,equip. (domestic) ---Mfr. of food products; beverages; tobacco products (domestic) 20 16 12 SŽ Š 4 (D 0 -4 -8 -12 -16 .......i...........J ...... K.".................... n\.'' \ \ \ i.. V ...1___________J I 1 ...........1........... » sV / ____________■___________f .-.J^^j_________ ! » ^ ...........4...\.......^ /i ...........1 ! 1 ...........4...........^ / 1 ^ ...........4.......... J 1 Source: SURS. Prices of imported goods declined in 2013 compared with 2012 (-0.9%). Such a decline was last recorded at the end of 2008. The year-on-year fall was mainly accounted for by lower prices of metals and metal products (-7.0%), in addition to lower prices of chemical products (-3.6%) and ICT and electrical equipment (-2.1%). In November the price competitiveness of the economy continued to deteriorate in year-on-year terms. The real effective exchange rate as measured by the relative HICP23 was up again year-on-year (by 1.5%) due to the appreciation of the euro, yet less than in most other euro area countries for the third consecutive month. Owing to the structure of Slovenia's external trade, the increase in the nominal effective exchange rate was among the smallest in the euro area.24 Relative prices, which remained at a comparable 2012 level in November for the third successive month after a year of growth, were lower in most other countries of the euro area. Figure33: Real effective exchange rates of euro area countries deflated by HICP and ULC ■ REER ULC (Jan -Sep 2013) «REER HICP (Jan -Nov 2013) 6 5 4 3 # 2 1 -2 -3 -4 5 ccmmr^ml— _II— 3 Source: ECB; calculations by IMAD. In the third quarter the cost competitiveness of the economy improved more year-on-year again than on average in the euro area and the EU. As a result of the otherwise modest nominal increase25 in labour costs per employee, and concurrent growth in labour productivity due to a further decline in employment, nominal and real unit labour costs continued to fall in the third quarter. As in most of Slovenia's main trading partners unit labour costs were higher, the real effective exchange rate deflated by relative unit labour costs declined as well. In the first nine months of 2013 Slovenia was thus in a smaller group of euro area and EU countries where cost competitiveness improved in year-on-year terms. After the more pronounced deterioration in cost competitiveness at the beginning of the crisis, Slovenia's relative position improved last year for the third year in a row, although it is still lower than before the crisis. 23 In Slovenia, in comparison with its trading partners. 24 As Slovenia has an above-average share of merchandise trade with the euro area, the appreciation of the euro has a smaller impact on the nominal effective exchange rate (and conversely). 2 In real terms unit labour costs were down (1.1%) for the sixth quarter Figure 34: Real unit labour costs in Slovenia and the EU ^hRULC Slovenia ^HRULC EU -Productivity Slovenia -Productivity EU -----Compensation per empl. Slovenia -----Compensation per empl. EU -3 a a a a Source: Eu rostat; calcu lations by IMAD. Figure 35: Real unit labour costs in selected EU countries, Q1-Q3 2013 . ■Productivity -real* -f-j.....i.....f- ■ Compensation per employee -real* ■•■ ♦RULC 11 10 9 8 7 6 5 4 3 2 1 0 -1 -2 -3 -4 -5 -6 Source: Eurostat; calculations by IMAD. Note: *GDP deflator. The cost competiveness of the tradable sector,26 particular, continued to improve in the second quarter. In the third quarter and in the first nine months of the year real unit labour costs declined in manufacturing, trade, transportation, accommodation and food service activities and information and communication activities. The decline was mostly a consequence of rising labour productivity due to the adjustment of employment to lower activity amid a concurrent, more modest, increase/ decline in wages. In the non-tradable sector the cost in 26 Based on the definition, according to which the tradable sector includes: A agriculture, forestry and fishing, B-E industry excluding construction, G-I trade, transportation, accommodation and food service activities, J information and communication (European Commission, Quarterly report on the euro area, Volume 12 N.2, 2013). 6 ■- 3 0 -9 0 12 in a row. Table 11: Indicators of price and cost competitiveness Annual change, in % 2011 2012 q4 12 q1 13 q2 13 q3 13 Effective exchange rate1 Nominal -0.1 -1.2 -1.4 0.2 0.6 1.6 Real, deflator HICP -1.0 -1.1 -0.8 0.9 0.8 2.3 Real, deflator ULC -2.3 -2.9 -2.9 -2.7 -1.8 -1.2 Unit labour costs. economy and components Nominal unit labour costs -0.7 0.8 0.3 1.2 -0.3 -0.9 Compensation of employees per employee. nominal 1.6 -1.0 -1.4 -0.8 0.7 0.2 Labour productivity, real 2.4 -1.7 -1.7 -2.0 1.1 1.1 Real unit labour costs -1.9 0.5 0.1 1.2 -2.0 -2.2 Labour productivity, nominal 3.6 -1.5 -1.5 -2.0 2.7 2.5 Source: SORS. ECB; calculations by IMAD. Note: 1 against 36 trading partners. according to ECB. Figure 36: Real unit labour costs by sectors of the economy, Q1-Q3 2013 ■ Productivity, nominal HCompensation per empl., nominal »RULC Q1-Q3 2013 10 8 != 6 4 2 0 ^ -2 J^ Source: SURS; calculations by IMAD. competitiveness deteriorated in most activities (with the exception of construction and real estate) due to a larger decline in labour productivity than in labour costs. The cost competitiveness of the tradable sector is gradually approaching the pre-crisis level and is roughly on a par with the EU average. In the first nine months of last year real unit labour costs in the Slovenian tradable sector were still 4.3% higher than in 2007, which is almost the same as the EU average (3.7%). The improvement in the competitive position is particularly visible in the manufacturing sector, which accounts for most of Slovenia's merchandise exports, and in the sectors of trade, transportation, accommodation and food service activities and communication activities, where unit labour costs levels are already similar to those in the EU average or lower. On the other hand, the situation of the non-tradable sector is deteriorating further, which is in turn reflected in a relatively less favourable competitive position of the entire economy. Figure 37: Ratios of labour costs to value added per employee (wage shares) by sectors of the economy compared with the EU average ■ 2007 ^2010 101-03 2013 Source: Eurostat; calculations by IMAD. Balance of payments The current account surplus was up substantially in the first eleven months of 2013 (EUR 2,073.0 m) relative to the same period last year (1,103.2 m). This was mainly a result of a considerably wider surplus in merchandise trade. The surplus in trade in services widened and the deficit in factor income narrowed, while the deficit in current transfers increased. The surplus in goods and services trade recorded since the beginning of 2013 has been narrowing in monthly terms since October. The year-on-year increase in the surplus in goods and services trade in the first eleven months of 2013 was a consequence of growth in exports, but also reflected a decline in imports. Both the surpluses in trade and services rose substantially, the surplus in services even more notably. The merchandise trade surplus rose primarily due to a smaller deficit in trade with the EU. The improvement in the balance of services trade mainly reflected a larger surplus in intermediation services and a smaller deficit in services related to intellectual property rights. The surplus in trade in travel services was up amid stagnant revenue from travel and modest consumption of domestic households abroad. The deficit in income from labour and capital narrowed year-on-year in the first eleven months of 2013 mainly due to higher income from capital. Net outflows of direct investment were down (by an estimated EUR 168.3 m),27 as was the outflow of dividends and other profits paid to foreign portfolio investors. Total net interest payments of interest on external debt stood at EUR 437.3 (EUR 413.5 in the same period of 2012). The private sector (domestic commercial banks in particular) continues to deleverage abroad, but net interest payments are still rising due to further government sector borrowing by issuing bonds and relatively high interest rates. The position in current transfers deteriorated in year-on-year terms in the first eleven months of 2013, mostly due to a wider year-on-year deficit of the general government (relatively lower absorption of EU funds). Figure 38: Current account components, in EUR m Table 12: Balance of payments 400 ■ Merchandise trade I Factor income -Current account ■ Services trade ■ Current transfers o: 0 Öu -100 Source: BS; calculations by IMAD. International financial transactions28 recorded a net outflow of EUR 2,837.0 m in the first eleven months of 2013, higher than in the same period of 2012 (EUR 1,409.0 m). The net capital outflows of the private sector and the Bank of Slovenia exceeded the net capital inflow of the government sector. The net outflow recorded in November was the smallest in 2013 (EUR 86.7 m). The 27 Mainly due to lower estimated negative reinvested earnings. Negative reinvested earnings mean that net profits in a certain period (excluding extraordinary profits) were smaller than profits disbursed in the same period, or that companies made losses. 28 Excluding international monetary reserves and statistical errors. I-XI 13, v mio EUR Inflows Outflows Balance1 Balance, I-XI 12 Current account 27,300.6 25,227.5 2,073.0 1,103.2 - Trade balance (FOB) 20,437.2 19,738.9 698.2 7.0 - Services 4,936.3 3,039.3 1,897.0 1,717.5 - Income 756.1 1,152.3 -396.1 -532.9 Current transfers 1,170.9 1,297.0 -126.1 -88.3 Capital and financial account 3,486.1 -6,434.1 -2,947.9 -1,454.6 - Capital account 241.1 -311.2 -70.1 -94.9 - Capital transfers 211.7 -292.8 -81.2 -90.4 - Non-produced, non-financial assets 29.4 -18.4 11.0 -4.5 - Financial account 3,245.1 -6,122.8 -2,877.8 -1,359.6 - Direct investment -480.0 -6.5 -486.5 314.4 - Portfolio investment 3,317.2 290.6 3,607.8 -161.9 - Financial derivates -44.8 -337.0 -381.8 -159.1 - Other investment 452.7 -6,029.2 -5,576.6 -1,402.4 - Assets 0.0 -2,351.1 -2,351.1 -2,071.7 - Liabilities 452.7 -3,678.1 -3,225.4 669.3 - Reserve assets 0.0 -40.8 -40.8 49.3 Net errors and omissions 874.9 0.0 874.9 351.3 Source: BS. Note: 'a minus sign (-) in the balance indicates a surplus of imports over exports in the current account and a rise in assets in the capital and financial account and the central bank's international reserves. government sector was the only sector to see a net capital inflow, due to the issue of a 3-year bond in the amount of EUR 1.5 bn on the EU market at an interest rate of 4.7%. In November the Bank of Slovenia reduced considerably its liabilities to the Eurosystem, mainly due to the issue of a long-term bond of the government sector.29 The private Figure 39: Financial transactions of the balance of payments by sector General government Bank of Slovenia ^■Private sector -Net financial flow 3,000 2,000 1,000 -1,000 -2,000 -3,000 Source: BS. 29 When a country issues securities, its liabilities from the issue of securities increase while its liabilities to the Eurosystem (TARGET) decline. 0 sector (households and commercial banks) deposited some of its savings into foreign accounts in November (banks EUR 220.9 m, households EUR 82.9 m). Commercial banks also increased the net outflow of long-term debt securities (EUR 24.3 m). Direct investment also posted a net outflow because of a rise in financial claims against foreign owners of affiliated companies. related to one-off events,31 but we estimate that the net flow would have also been slightly positive without these events (around EUR 15 m). In November the gaps between domestic and foreign interest rates for corporate and NFI loans32 narrowed, but are still among the widest in the euro area, at 230 basis points, being larger only in Greece and Portugal. Financial markets December's data on the Slovenian banking system were strongly marked by the beginning of the stabilisation of the most vulnerable banks. The stock of domestic nonbanking sector loans shrank by as much as EUR 3.3 bn in monthly terms, primarily due to the transfer of the first package of bad bank claims (EUR 3.2 bn) to the DUTB. The largest decline by far was recorded by corporate and NFI loans, while the decline in household loans was much stronger than in previous years. Loans of domestic nonbanking sectors thus fell by EUR 5.2 bn in 2013 overall, approximately four times as much as in 2012. The outflow of household deposits slowed slightly due to seasonal factors (payment of Christmas bonuses and 13th month payments), while general government deposits fell substantially as a result of the recapitalisation of the Slovenian banking system. At the end of the year the banks continued to reduce liabilities abroad. After October's decline, the stock of bad claims in the Slovenian banking system increased somewhat again in November. The decline in household loans was the largest thus far, almost EUR 80 m.30 All types of loans declined, but only loans for other purposes fell much more than in previous months (EUR 50 m). This can also be explained by the transfer of bad claims of sole proprietors to the DUTB, as the decline was mainly a result of a smaller volume of other loans for business operations. The volume of household loans dropped by close to EUR 350 m in 2013, which is nearly 9% more than in 2012. In December corporate and NFI loans fell by as much as EUR 3.2 bn largely due to the transfer of bad claims to the DUTB. Loans to enterprises dropped the most, almost by EUR 3 bn, while NFI loans shrank by close to EUR 250 m. Corporate and NFI loans thus dropped by a high of EUR 4.8 bn last year, around three times the amount of 2012. After two months of borrowing, enterprises and NFIs made net repayments of foreign loans in November. Net repayments were at EUR 39.7 m, of which around two thirds were in short-term loans. The borrowing of short-term loans dropped significantly relative to previous months, while the repayments did not differ much from the eleven-month average. In the first eleven months of 2013 enterprises borrowed EUR 1.1 bn net abroad (in the same period of 2012 around EUR 80 m). This is mainly Figure 40: Increase in household, corporate, NFI and government loans I Enterprises and NFi^ ^^HGovernment-Total ^Households 700 600 500 400 300 200 E 100 cc 0 ^^ -100 -200 -300 -400 -500 -600 -700 Source: BS; calculations by IMAD. Figure 41: Net corporate and NFI borrowing abroad and gaps between domestic and foreign interest rates ^^■Short-term loans (left axis) ^■Long-term loans (left axis) -Gap between domestic and foreign interest rates (right axis) 500 450 400 300 200 100 0 -100 --200 -300 -400 o ^ ^ 350 300 250 200 150 100 50 0 Source: BS; calculations by IMAD. 0 From 2005 onwards. 31 Such as the requalification of liabilities from foreign direct investments into loans from non-affiliated companies, and increased borrowing by one of the energy companies, rather than as a result of the generally improved access of Slovenian enterprises and NFIs to foreign sources of finance. 32 Interest rates for loans over EUR 1 m with a variable, or up to one year with a fixed interest rate. Bank deleveraging abroad slowed in November. Banks continued to make net repayments of deposits in particular (EUR 87.1 m). Net repayments of bonds were slightly lower, while loans (both long-term and short-term loans) recorded a modest inflow for the first time since September 2012, in the total amount of around EUR 15 m. In the first eleven months banks repaid EUR 2.0 bn net in foreign loans, approximately 40% less than in the comparable period of 2012. Figure 42: Net repayments of foreign liabilities of Slovenian banks 2,000 - 1,500 1,000 Bonds Deposits Short-term loans Long-term loans Total J? Source: BS; calculations by IM AD. In December household deposits ceased declining due to the disbursement of 13'h month payments and Christmas bonuses, while government deposits fell to the lowest level since 2008 due to bank recapitalisation. Household deposits in banks rose only by EUR 2.2 m in December, which is the smallest increase in December to date.33 Despite the minimum increase, the maturity structure of deposits deteriorated slightly again, as short-term and long-term deposits combined shrank by around EUR 45 m and only overnight deposits increased. Household deposits thus dropped by EUR 463.2 m in 2013, which is the largest decline thus far.34 Government deposits fell by around EUR 2.3 bn to EUR 1.3 bn in December. Over 90% of the decline was a consequence of a smaller volume of deposits with agreed maturity (both long-term and short-term), which significantly deteriorated the maturity structure of deposits. In 2013 the volume of government deposits in banks declined by EUR 1.3 bn. After October's decline, the amount of bad claims35 rose again in November, but the increase was relatively small, less than EUR 40 m. In addition to the construction sector, professional, scientific and technical activities and trade also contributed significantly to the deterioration in the quality of bank assets. Other activities experienced no significant deterioration, while the volume of bad claims declined slightly in financial services and real estate activities. Owing to the extremely negative developments in the first three quarters, the total amount of bad claims in the Slovenian banking system rose by EUR 1.9 bn in the first eleven months of 2013, which is almost half more than in the same period of 2012. Banks added EUR 2.3 bn in impairments and provisions in December. In 2013 overall their amount rose by as much as EUR 3.7 bn, which is almost 1.5 times more than in 2012. Figure 43: Shares of bad and non-performing claims and creation of impairments and provisions in the Slovenian banking system Provisions and impairments (left axis) -Share of non-performing claims (right axis) -Share of bad claims (right axis) 22 20 18 16 14 12 iE 200 I 10 150 8 100 Ii 6 50 4 0 HIIL 2 -50 0 Source: BS; calculations by IMAD. Figure 44: 10-year government bond yield spread vis-avis German bond - Slovenia Italy - Spain France T3 a 3 2 33 From 2005 onwards. 34 From 2005 onwards. 35 Claims rated C, D and E. Source: Bloomberg. Note: To monitor the movement of 10-y. gover.bond yields on the common EU market, a new benchmark gover.bond started to be used as a basis for comparison as of 1 Jan 2014. The data before and after this date are therefore not comparable - 0 7 6 5 4 0 Table 13: Financial market indicators Domestic bank loans to nonbanking sector and household savings Nominal amounts, EUR bn Nominal loan growth, % 31. XII 12 31. XII 13 31. XII 13/30. XI 13 31. XII 13/31. XII 12 31. XII 12/31. XII 11 Loans total 31,464.6 26,253.8 -11.1 -16.6 -3.9 Enterprises and NFI 20,456.5 15,672.2 -16.9 -23.4 -7.3 Government 1,741.4 1,664.0 0.6 -4.4 43.3 Households 9,266.7 8,917.6 -0.9 -3.8 -2.0 Consumer credits 2,481.8 2,213.4 -1.0 -10.8 -8.8 Lending for house purchase 5,258.9 5,306.5 -0.1 0.9 1.8 Other lending 1,526.1 1,397.6 -3.4 -8.4 -2.6 Bank deposits total 15,051.3 14,588.1 0.0 -3.1 -0.3 Overnight deposits 6,479.4 6,446.6 0.7 -0.5 0.6 Short-term deposits 4,010.9 3,681.9 -0.9 -8.2 -2.8 Long-term deposits 4,554.7 4,456.1 -0.2 -2.2 0.7 Deposits redeemable at notice 6.2 3.5 -8.8 -43.7 -17.6 Mutual funds 1,830.0 1,854.6 -1.4 1.3 1.1 Government bank deposits, total 2,562.7 1,284.1 -64.4 -49.9 -10.0 Overnight deposits 196.6 22.9 -87.9 -88.4 40.7 Short-term deposits 828.4 512.8 -72.3 -38.1 19.3 Long-term deposits 1,537.1 738.5 -51.1 -52.0 -23.7 Deposits redeemable at notice 0.5 9.8 -83.9 1,705.6 -61.6 Sources: Monthly Bulletin of the BS, SMA (Securities Market Agency); calculations by IMAD. Having declined in the first half of January, borrowing costs rose again at the end of the January to the level recorded at the beginning of the month. Following the release of the stress tests and the recapitalisation of banks in December 2013, borrowing costs declined to the lowest level since September 2011 (in mid-December the bond yield totalled 4.5%, the spread vis-a-vis the German bond being 270 basis points). In the second half of the month the spread versus the German bond yield widened somewhat due to uncertainty in developing countries and reached 325 basis points, while the yield to maturity maintained the level seen at the beginning of the month. Public finance The higher general government deficit36 in the first eleven months of the year was also due to November's year-on-year fall in personal income tax revenue and increase in interest payments. The general government deficit in the first eleven months of 2013 was EUR 1.6 bn, which is EUR 378 m (32%) more than in the same period of 2012. This increase is explained primarily by lower revenue (down EUR 388 m or 2.9%) as accumulated expenditure remained slightly lower than in the previous year (down EUR 10 m or 0.1%). Compared with the previous November, total revenue in November 2013 was EUR 103 m lower (-2.9%) while expenditure increased by EUR 15 m (1.1%). The year-on-year fall in general government revenue in the first eleven months of 2013 is explained primarily by a fall in tax revenue (EUR 556 m) and social security contributions (EUR 114 m). The decline in tax revenue compared with same period of the previous year was mainly due to a fall in corporate income tax (EUR 299 m or 56.6%) and personal income tax (by EUR 185 m or 10%). VAT revenue increased (EUR 53 m or 1.9%), while the falling of social security contributions slowed down. Excise duties were lower but to some extent this is explained by the fact that tax payments are registered on a cash basis. The overall substantial fall in corporate income tax reflects tax reform changes, which took place in 2012 and whose effect on cash accounts showed in 2013, and Figure 45: Consolidated general government revenue and expenditure 17.0 16.0 o ti= ■S J^ 15.5 D E 15.0 14.5 ■General government revenue, total General government expenditure, total -?.......r-r i.......i...........r.......'......i- ■t. 36 According to the cash-flow methodology. Source: MF; calculations by IMAD. 17.5 14.0 Box 5: Absorption of cohesion funds in 2013 (2007-2013 programming period) Figure 46: Absorption of Cohesion Policy funds in the 2007-2013 programming period ■ Allocated funds ■ Signed contracts Payments to beneficiaries ■ Reimbursements to the state budget ■ Delays I Absorption relative to f nancial allocation for 2007-2013 (%) As at 31 December 2013 In the2007-2013 financial framework Slovenia was allocated EUR 4.1 bn for the implementation of the Cohesion Policy (OP RR,1 OP RČV,2 OP ROPI3). Together with the additional appropriations,4 EUR 4.2 bn (104.1% of available funds) had been allocated (certified operations) by the end of 2013 (by the end of 2012 EUR 2.9 bn). The value of signed contracts was just below EUR 3.8 bn (EUR 2.9 bn at the end of 2012). The highest percentage of funds with regard to the available funding for the current programming period was earmarked for the OP ROPI (112.8%), although this programme had the lowest absorption (37.9%). The OP RR was allocated 98.8% (its absorption was 75.5%) and the OP RČV 98.2% (its absorption was 66.5%). Beneficiaries received EUR 2.5 bn from the state budget (62.4% of the financial allocation), while reimbursements to Slovenia's budget totalled EUR 2.4 bn (59.4% of the allocation). Out of EUR 452.4 m5 of the available additional appropriations, 81.2% was allocated by the end of the year (EUR 367.4 m, of which EUR 320 m of EU funds). The most additional funds were earmarked for the OP ROPI (78.5%), 18.2% for OP RR and 3.3% for OP RČV. In 2013 the delays in reimbursements were much smaller (EUR 124.9 m) than in previous years (in 2012 EUR 249.7 m), which is a consequence of simplified procedures for the preparation of claims for payment and better cooperation between ministries. The annual growth of reimbursements to the state budget totalled 15.6%, the strongest growth relative to last year being recorded by the OP RČV (20.2%) and the lowest by the OP ROPI (13.8%). 2250 2000 1750 1500 1250 1000 750 500 250 90 80 70 60 50 40 30 20 10 OP RR OP RČV OP ROPI Source: Ministry of Economic Development and Technology The year 2013 being decisive for the absorption of Cohesion Policy funds due to the N+2/3 rule,6 the Government of the RS took a number of steps7 to simplify the system. One of the important measures was adoption of the Implementation of the Republic of Slovenia Budget for 2014 and 2015 Act," which made it possible to revoke the contracts for projects that are behind schedule and replace them with projects that can be finished in time. According to data by the Ministry of Economic Development and Technology, Slovenia satisfied the requirements of the N+2/3 rule, meaning that it will not lose the funds allocated by the end of 2011, while in the next two years it is supposed to absorb around EUR 800 m on average per year (in 2013 it received EUR 933.7 m). 1 Operational Programme for Strengthening Regional Development Potentials 2 Operational Programme for Human Resource Development. 3 Operational Programme of Environmental and Transport Infrastructure Development. 4 Operational Programmes were allocated additional funds for contingency projects because of a high risk that Slovenia might lose the already allocated EU funds due to low absorption. 5 EUR 307.3 m for the OP ROPI, EUR 102.3 m for the OP RR and EUR 42.7 m for the OP RČV. 6 To comply with the N+2/3 rule, Slovenia had to absorb the funds allocated from the beginning of the current financial perspective to the end of 2011 by the end of 2013. 7 Additional appropriations, change and transfer of funds between the OP ROPI and the OP RR, phased implementation of projects over two programming periods (2007-2013 and 2014-2020), setting up a special government service as a separate government body to manage and implement the Cohesion Policy, preparation of an action plan for faster absorption of EU funds under the Convergence objective. 8 Official Gazette of the Republic of Slovenia, No. 101/2013. the slowdown in economic activity. The difference in the movements of personal income tax (a further fall) and social security contributions (a slower decline) both depending largely on labor income dynamics can be explained partly by information system problems during the same period of 2012. VAT revenue has kept improving since the month of July and in the first eleven months of 2013 it was higher than in the same period of the previous year. The improvement in VAT revenue reflects the increase in the VAT rate in July and efforts to enhance tax compliance. Non-tax revenue was bigger (EUR 150 million) while EU budget transfers remained slightly lower (EUR 14.1 million). General government expenditure remained slightly lower in the first eleven months of 2013 compared with the same period one year earlier. It increased further in November (2.5% month-on-month) but the increase was smaller than in October. The overall expenditure dynamics in eleven months are underpinned by the reduction in the wage bill (EUR 157 m), purchases of goods and services (EUR 154 m) and social transfers (EUR 51 m). Social security contributions also decreased (EUR 38 m) reflecting the reduction in the total number of employees in the government. Factors influencing the total increase in expenditure during the year include the rise in interest payments (EUR 194 m), which were increasing rapidly Table 14: Taxes and social security contributions EUR m Growth, % Structure, % I-XI 2013 XI 2013/XI 2012 I-XI2013/I-I-XI 2012 I-XI 2012 I-XI 2013 General government revenue - total 13,124.1 -7.9 -2.9 100.0 100.0 Corporate income tax 229.6 -33.6 -56.5 3.9 1.7 Personal income tax 1,674.6 -39.9 -10.0 13.8 12.8 Value added tax 2,765.4 11.5 1.9 20.1 21.1 Excise duties 1,311.8 -49.9 -8.9 10.7 10.0 Social security contributions 4,657.5 18.8 -2.4 35.3 35.5 Other general government revenues 2,485.2 -1.2 13.0 16.3 18.9 Source: PPA - Report on Payments of All Public Revenues; calculations by IMAD. Table 15: Consolidated general government revenue and expenditure 2012 2013 EUR m % of GDP Growth, % I-XI 13, EUR m I-XI 13/I-XI 12 Revenue - total 14,999.1 42.3 0.1 13,124.1 -2.9 - Tax revenues 13,118.3 37.0 -0.7 11,451.8 -4.6 - Taxes on income and profit 2,656.6 7.5 -2.5 1,908.4 -20.2 - Social security contributions 5,244.1 14.8 -0.4 4,657.5 -2.4 - Domestic taxes on goods and servises 4,876.1 13.7 0.4 4,542.4 0.3 - Receipts from the EU budget 845.1 2.4 3.7 649.9 -2.1 Expenditure - total 16,125.7 45.5 -2.5 14,695.1 -0.1 - Wages and other personnel expenditure 3,184.7 9.0 -4.4 3,294.6 -4.6 - Purchases of goods and services 2,373.0 6.7 -2.9 2,010.2 -7.1 -Domestic and foreign interest payments 647.9 1.8 23.0 837.8 30.2 - Transfers to individuals and households 6,384.2 18.0 -2.3 5,819.2 -0.9 - Capital expenditure 915.0 2.6 -10.6 795.4 6.0 - Capital transfers 319.9 0.9 -14.0 235.0 -6.2 - Payment to the EU budget 390.3 1.1 -3.7 398.1 4.6 Deficit -1,122.8 -3.2 -28.2 -1,571.0 31.7 Source: MF, Public Finance Bulletin. in the last three months (EUR 79 m in November alone), investment (EUR 45 m) and subsidies (EUR 25 m), use of the budget reserves (EUR 63 m) and payments to EU budget and transfers abroad (together EUR 37 m). The reduction of social transfers continued across all categories with the main exception of pensions (up by EUR 97 m). The positive growth in pension expenditure is explained primarily by the increase in the number of pensioners. The most important reductions in social transfers concerns scholarships37 and family benefits and parental compensations. Transfers to the unemployed remained at the same level as in the previous year. In 2013 Slovenia recorded a larger net surplus of the state budget against the EU budget (EUR 508.2 m) than in 2012 (EUR 451.3 m). In nominal terms, Slovenia received EUR 933.7 m, 10.9% more than in 2012. Its payments to the EU budget totalled EUR 425.4 m, 102.7% of the level earmarked for this purpose in the revised state budget (2012: EUR 390.3 m, 96.7% ofthe level planned).The highest Figure 47: Receipts from the EU budget in 2012 and 2013 ■ Total receipts in 2013 (January -December) ■ Total receipts in 2012 (January -December) Common Agricultural Policy 37 As since May 2013 scholarships have been paid from direct government funds or reserves, they are the lowest among all transfers. 100 150 200 250 300 350 400 450 In EUR m Source: MF; calculations by IMAD. Figure 48: Planned and absorbed EU funds, 2012 and 2013 ■ Absorption rate relative to the revised budget 2013 ■ Absorption rate relative to the revised budget 2012 Common Agricultural Policy 0 10 20 30 40 50 60 70 In % Source: MF; calculations by IMAD. 90 100 110 120 absorption rate in 2013 was recorded by funds received under the Common Agricultural and Fisheries Policies (EUR 271.7 m, 90.9% of the anticipated absorption), and the lowest by receipts from Structural Funds (EUR 433.0 m, 69.4% of revenue planned, most of which was absorbed in December). Owing to high absorption in December (EUR 93.9 m), the annual absorption from the Cohesion Fund (EUR 193.3 m) reached 83.8% of the amount envisaged in the revised budget for 2013. Because of the expected higher revenue from the EU budget (EUR 1,185.8 m),38 the total absorption rate of EU funds in 2013 (78.7% of the level envisaged in the revised budget) was lower than in 2012 (94.7% of the expected EUR 888.6 m). 38 Because of the N+2/3 rule. X "ö C a a (ü "5 (U MAIN INDICATORS 2008 2009 2010 2011 2012 2013 2014 2015 Autumn forecast 2013 GDP (real growth rates, in %) 3.4 -7.9 1.3 0.7 -2.5 -2.4 -0.8 0.4 GDP in EUR million (current prices and current exchange rate) 37,244 35,420 35,485 36,150 35,319 34,908 35,132 35,747 GDP per capita, in EUR (current prices and current exchange rate) 18,420 17,349 17,320 17,610 17,172 16,942 17,027 17,305 GDP per capita (PPS)1 22,700 20,300 20,500 21,000 20,900 GDP per capita (PPS EU27=100)' 91 86 83 83 81 Gross national income (current prices and current fixed exchange rate) 36,273 34,823 35,028 35,759 34,931 34,196 34,362 34,910 Gross national disposable income (current prices and current fixed exchange rate) 35,904 34,519 34,875 35,680 34,721 34,295 34,268 34,758 Rate of registered unemployment 6.7 9.1 10.7 11.8 12.0 13.3 13.6 13.5 Standardised rate of unemployment (ILO) 4.4 5.9 7.3 8.2 8.9 10.7 11.0 10.6 Labour productivity (GDP per employee) 0.8 -6.2 3.5 2.4 -1.7 -0.1 0.6 1.1 Inflation,2 year average 5.7 0.9 1.8 1.8 2.6 2.0 1.9 1.4 Inflation,2 end of the year 2.1 1.8 1.9 2.0 2.7 2.3 1.4 1.7 INTERNATIONAL TRADE - BALANCE OF PAYMENTS STATISTICS Exports of goods and services3 (real growth rates, in %) 4.0 -16.1 10.2 7.0 0.6 2.0 3.0 4.1 Exports of goods 1.8 -16.6 12.0 8.2 -0.1 1.6 3.1 4.3 Exports of services 14.3 -14.0 3.5 1.9 3.7 3.8 2.7 3.2 Imports of goods and services3 (real growth rates, in %) 3.7 -19.2 7.4 5.6 -4.7 0.1 2.1 3.9 Imports of goods 3.0 -20.2 8.3 6.6 -5.1 0.3 2.0 3.9 Imports of services 8.2 -12.4 2.6 -0.6 -2.2 -1.0 2.5 4.2 Current account balance, in EUR million -2,028 -173 -50 146 1,159 1,731 1,765 1,817 As a per cent share relative to GDP -5.4 -0.5 -0.1 0.4 3.3 5.0 5.0 5.1 Gross external debt, in EUR million 39,234 40,294 40,723 40,241 40,838 40,3535 As a per cent share relative to GDP 105.3 113.8 114.8 111.3 115.6 Ratio of USD to EUR 1.471 1.393 1.327 1.392 1.286 1.320 1.331 1.331 DOMESTIC DEMAND - NATIONAL ACCOUNTS STATISTICS Private consumption (real growth rates, in %) 2.3 -0.1 1.5 0.8 -4.8 -3.5 -2.7 0.5 As a % of GDP4 51.8 54.8 56.4 56.8 56.3 55.7 54.8 54.7 Government consumption (real growth rates, in %) 5.9 2.5 1.3 -1.6 -1.3 -2.5 -1.5 -1.0 As a % of GDP4 18.1 20.2 20.8 20.8 20.8 20.4 20.3 20.0 Gross fixed capital formation (real growth rates, in %) 7.1 -23.8 -15.3 -5.5 -8.2 -1.6 -4.0 -0.9 As a % of GDP4 28.6 23.1 19.7 18.6 17.8 17.7 17.2 17.1 Sources of data: SURS, BS, Eurostat, calculations and forecasts by IMAD (Autumn Forecast, September 2013). Notes: "Measured in purchasing power standard. ^Consumer price index. ^Balance of payments statistics (exports F.O.B., imports F.O.B.); real growth rates are adjusted for inter currency changes and changes in prices on foreign markets. 4Shares GDP are calculated for GDP in current prices at fixed exchange rate (EUR=239.64). 5End November 2013. PRODUCTION 2010 2011 2012 2011 2012 2013 2011 2012 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 11 12 1 2 3 INDUSTRIAL PRODUCTION, y-o-y growth rates, % Industry B+C+D 7.1 1.3 -1.1 -0.8 -3.8 -0.2 -1.6 -0.4 -2.3 -2.5 -1.2 -0.4 -0.4 -8.3 0.5 3.3 -3.6 B Mining and quarrying 13.9 -7.9 -7.4 -9.6 -8.7 -10.2 -2.3 -3.5 -13.3 8.7 -7.8 -5.7 -3.0 -17.0 6.1 -11.4 -22.0 C Manufacturing 7.6 1.1 -2.3 -1.1 -4.6 -1.0 -3.0 -2.1 -3.1 -3.7 -1.5 -0.7 -1.6 -8.8 0.0 1.9 -4.2 D Electricity, gas & steam supply1 1.8 5.0 10.5 5.1 4.0 8.3 12.7 16.1 6.1 7.0 1.3 3.3 13.2 -4.0 3.5 16.3 5.3 CONSTRUCTION,2 real indices of construction put in place, y-o-y growth rates, % Construction, total -16.9 -24.8 -16.8 -24.5 -19.1 -15.3 -16.7 -13.2 -21.6 -24.5 -10.5 -3.8 -7.8 -24.0 -21.7 -24.3 -3.1 Buildings -14.0 -39.7 -17.3 -34.3 -35.9 -13.0 -6.7 -18.1 -30.0 -40.9 -25.1 -16.9 -28.6 -44.5 -31.1 -31.0 27.6 Civil engineering -19.0 -15.3 -16.6 -19.9 -10.1 -21.2 -20.9 -10.1 -16.2 -8.5 -2.6 1.3 0.7 -7.0 -18.1 -22.8 -22.0 TRANSPORT, tonne-km in m, y-o-y growth rates, % Tonne-km in road transport 7.9 3.2 -3.4 3.6 11.7 6.0 -5.3 -5.9 -7.8 -2.9 -1.8 3.9 Tonne-km in rail transport 28.2 9.7 -7.5 8.5 -1.6 -8.7 -8.0 -5.8 -7.5 -0.1 0.4 13.4 Distributive trades, y-o-y growth rates, % Total real turnover* 3.6 3.1 0.2 2.9 -0.5 0.6 -4.3 -3.2 -2.7 -4.9 -5.8 -6.4 -0.5 -1.8 2.6 1.0 -1.8 Real turnover in retail trade -0.1 1.4 0.3 2.2 0.2 2.5 -2.7 -1.7 -1.0 -2.6 -3.8 -5.5 1.3 -1.1 4.0 3.5 -0.1 Real turnover in the sale and maintenance of motor vehicles 12.2 6.6 0.0 4.4 -1.9 -2.8 -7.2 -5.7 -6.4 -9.8 -10.3 -8.2 -3.6 -3.4 -0.1 -3.5 -4.8 Nominal turnover in wholesale trade & commission trade 1.3 5.8 0.6 4.6 3.4 3.4 -0.6 1.2 -1.2 -5.4 1.1 -1.4 5.6 -0.9 8.6 3.9 -0.9 TOURISM, y-o-y growth rates, %, new methodology from 2009 onwards Total, overnight stays -1.5 5.3 -4.0 6.6 3.1 0.7 1.2 1.2 1.9 -3.4 -1.5 2.9 7.0 1.2 0.2 -0.3 2.4 Domestic tourists, overnight stays -4.2 0.5 -10.9 0.8 0.4 -0.5 -4.6 -7.5 -5.2 -6.1 -5.3 -2.4 8.6 -3.3 -0.3 -3.3 2.8 Foreign tourists, overnight stays 0.7 9.1 0.9 10.2 5.5 2.0 5.1 6.3 8.1 -0.6 0.9 5.6 5.2 5.8 0.6 4.5 1.9 Nominal turnover market services (without distributive trades) 2.7 3.7 -1.1 4.8 -0.3 -0.6 0.5 -0.4 -3.7 -6.1 -3.0 0.6 0.2 0.5 0.3 -3.6 1.4 AGRICULTURE, y-o-y growth rates, % Purchase of agricultural products, SIT bn, since 2007 in EUR m 454.5 478.9 481.7 125.7 139.5 108.4 110.4 128.4 134.5 104.4 111.1 123.2 44.0 46.7 34.3 35.1 39.0 BUSSINES TENDENCY (indicator values**) Sentiment indicator -9 -7 -17 -7 -10 -12 -16 -19 -20 -15 -14 -1^ -10 -10 -12 -12 -12 Confidence indicator - in manufacturing -1 0 -11 -1 -7 -6 -11 -14 -13 -9 -6 -4 -7 -6 -3 -6 -8 - in construction -57 -46 -41 -44 -42 -41 -44 -39 -39 -30 -22 -18 -44 -41 -43 -40 -40 - in services -3 1 -12 4 -3 -8 -8 -14 -18 -12 -12 -11 -2 -9 -11 -9 -5 - in retail trade 7 8 2 2 13 5 4 2 -4 -3 2 6 17 11 1 9 5 Consumer confidence indicator -25 -25 -35 -25 -24 -27 -36 -39 -37 -29 -34 -34 -26 -19 -28 -26 -26 Source of data: SURS. Note: 'Only companies with activity of electricity supply are included. 2The survey covers all larger construction enterprises and some other enterprises that perform construction work. *Total real turnover in retail trade, the sale and repair of motor wehicles, and retail sale of automotive fuels. **Seasonally adjusted data. 2012 2013 2014 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2.2 -3.9 -2.6 3.6 3.1 -6.7 5.2 -4.9 -7.5 0.2 -0.7 -6.4 3.1 -2.0 -4.6 2.0 -5.6 1.7 -0.6 1.0 - -8.2 9.8 -7.0 -5.7 1.4 -5.8 1.2 -17.9 -24.9 -9.6 12.9 24.1 -2.5 -9.2 -11.5 3.7 0.5 -20.2 -5.0 9.0 1.9 -5.5 -4.9 1.8 1.6 -8.4 4.7 -5.5 -9.1 -0.9 -0.8 -8.6 2.8 -2.2 -4.8 2.0 -6.6 1.6 -1.2 1.1 5.6 9.4 24.0 22.6 16.2 9.8 11.8 2.3 4.9 11.3 0.0 10.2 6.1 0.7 -2.4 1.9 1.7 6.3 5.1 -1.2 - -13.5 -23.8 -11.7 -19.6 -14.4 -6.4 -22.5 -26.1 -14.8 -23.2 -14.0 -31.7 -18.7 -11.6 -2.0 1.8 -5.4 -6.8 28.6 30.8 -7.2 -15.6 4.4 -23.9 -11.9 -18.6 -34.6 -19.4 -35.4 -38.2 -28.0 -50.1 -36.2 -24.2 -14.1 -19.1 -19.8 -12.1 11.6 3.5 -18.6 -26.5 -17.0 -17.1 -15.7 1.2 -15.0 -27.2 -2.1 -8.6 -0.6 -13.6 -6.3 -5.9 3.5 11.0 2.2 -6.5 32.2 40.5 - - - - - - - - -4.0 -5.2 -3.7 -0.6 -3.8 -10.3 -3.4 -5.4 -8.0 -4.8 -8.7 -7.7 2.8 1.3 2.7 -4.2 -3.4 1.3 2.1 2.7 - -3.5 -3.1 -1.5 -0.6 -0.8 -6.5 -4.1 -5.8 -7.4 -4.4 -9.3 -7.2 -1.7 -1.7 -3.7 -4.9 -4.6 -4.1 -1.0 -1.4 -5.1 -8.8 -7.7 -0.6 -10.8 -17.9 -2.1 -4.5 -9.2 -5.7 -7.4 -8.5 11.4 6.8 15.4 -2.7 -0.2 14.0 8.3 10.2 0.1 0.4 -2.2 7.2 2.8 -5.4 4.8 -2.0 -6.5 1.5 -5.6 -10.9 5.7 -0.9 -1.2 0.7 -4.7 -0.2 2.3 1.7 -0.9 7.9 -1.9 1.3 2.5 -1.4 -3.5 9.3 2.2 -10.5 0.2 0.6 -11.6 9.2 -2.4 3.4 2.2 3.2 4.0 -3.2 - -14.3 -1.6 0.9 -9.9 -4.1 -9.8 -6.6 -8.1 -0.7 -10.0 -1.3 -8.2 -6.0 2.0 -10.0 0.7 -4.6 -3.5 4.3 -2.3 9.4 14.1 -3.7 8.4 6.3 3.1 -1.3 28.2 4.9 -10.8 2.5 9.3 -15.0 13.3 2.6 4.8 5.8 6.4 3.8 -4.0 -0.9 2.6 -0.1 1.1 0.6 -2.9 -4.2 -0.3 -6.6 -7.4 -3.5 -7.3 -2.7 -3.1 -3.3 0.9 -0.5 1.4 4.7 1.9 37.0 38.3 35.1 47.2 37.9 43.3 47.1 41.0 46.3 33.9 32.2 38.4 37.5 38.7 34.9 45.1 37.1 41.0 49.3 41.7 - - -16 -15 -18 -18 -19 -21 -22 -21 -17 -16 -16 -13 -14 -14 -13 -13 -12 -12 -13 -12 -12 -9 -10 -10 -13 -12 -15 -16 -16 -14 -10 -11 -8 -8 -9 -5 -3 -4 -4 -4 -5 -3 -2 -3 -45 -44 -43 -40 -37 -41 -42 -40 -35 -30 -31 -30 -26 -20 -20 -22 -15 -16 -17 -17 -20 -16 -8 -7 -10 -11 -14 -16 -19 -19 -15 -13 -13 -11 -9 -14 -14 -11 -9 -13 -13 -10 -12 -5 8 1 4 -1 -2 8 -7 -5 0 1 -9 -2 -5 -5 16 16 0 3 13 -6 -3 9 -39 -33 -36 -36 -36 -45 -39 -37 -34 -31 -31 -26 -27 -37 -37 -37 -33 -31 -35 -35 -34 -31 LABOUR MARKET 2010 2011 2012 2011 2012 2013 2011 2012 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 12 1 2 FORMAL LABOUR FORCE (A=B+E) 935.5 934.7 920.2 931.1 933.3 926.6 923.7 915.2 915.2 912.9 913.8 910.5 930.1 927.5 927.1 PERSONS IN FORMAL EMPLOYMENT (B=C+D)' 835.0 824.0 810.0 823.9 821.7 812.7 816.5 809.1 801.7 789.2 795.0 794.4 817.3 811.6 812.0 In agriculture, forestry, fishing 33.4 38.8 37.0 38.8 38.0 35.2 37.8 37.4 37.4 37.4 38.9 38.1 37.9 35.2 35.1 In industry, construction 287.3 272.9 263.1 272.7 271.0 265.4 266.3 263.1 257.5 249.9 252.5 253.5 267.4 265.4 264.7 Of which: in manufacturing 188.6 184.8 182.9 184.4 186.2 184.6 184.1 182.5 180.4 177.8 177.6 177.5 185.1 184.6 184.6 in construction 78.5 67.8 59.8 67.9 64.4 60.5 61.6 60.1 56.9 52.0 54.6 55.7 62.1 60.7 59.9 In services 514.3 512.3 510.0 512.4 512.7 512.1 512.4 508.6 506.8 502.0 503.6 502.8 512.0 510.9 512.2 Of which: in public administration 52.0 51.4 50.7 51.4 51.3 50.9 51.2 50.8 50.0 49.3 49.3 49.1 51.2 50.8 50.9 in education, health-services, social work 116.7 118.8 120.9 118.5 120.1 120.7 121.6 120.3 121.0 120.7 121.1 120.5 120.3 119.9 120.8 FORMALLY EMPLOYED (C)1 747.2 729.1 717.0 728.9 727.4 720.9 722.7 716.2 708.4 696.1 700.0 699.6 723.0 719.6 720.3 In enterprises and organisations 685.7 671.8 662.6 671.3 670.7 666.4 667.4 661.4 655.1 645.8 648.5 647.9 667.6 665.2 666.1 By those self-employed 61.5 57.2 54.5 57.6 56.6 54.5 55.4 54.8 53.3 50.2 51.5 51.7 55.5 54.5 54.2 SELF-EMPLOYED AND FARMERS (D) 87.8 94.9 93.0 95.0 94.4 91.8 93.8 92.9 93.3 93.1 95.0 94.7 94.3 91.9 91.8 REGISTERED UNEMPLOYMENT (E) 100.5 110.7 110.2 107.2 111.6 114.0 107.2 106.1 113.5 123.7 118.8 116.1 112.8 116.0 115.0 Female 47.9 52.1 52.2 51.1 53.3 53.2 51.0 50.9 53.8 57.0 56.7 57.0 53.2 54.2 53.4 By age: under 26 13.9 12.9 11.9 11.3 13.4 12.7 10.8 10.1 14.0 14.2 13.0 12.3 13.2 13.2 12.9 aged over 50 31.4 39.0 38.2 38.7 38.2 39.2 38.1 37.4 38.1 40.7 39.3 38.1 38.4 39.6 39.4 Unskilled 37.5 39.5 39.4 38.1 39.3 41.0 39.2 37.8 39.5 43.4 40.6 38.8 40.1 41.4 41.6 For more than 1 year 42.8 50.2 55.2 49.6 53.8 57.2 55.1 54.5 53.9 54.4 54.3 55.0 56.7 58.0 57.3 Those receiving benefits 30.0 36.3 33.9 34.9 34.4 37.8 33.2 31.5 33.0 39.3 33.7 30.3 35.5 38.5 38.3 RATE OF REGISTERED UNEMPLOYMENT, E/A, in % 10.7 11.8 12.0 11.5 12.0 12.3 11.6 11.6 12.4 13.5 13.0 12.8 12.1 12.5 12.4 Male 10.1 11.4 11.5 10.9 11.3 11.9 11.1 11.0 11.9 13.4 12.5 11.9 11.6 12.1 12.1 Female 11.6 12.4 12.6 12.3 12.7 12.7 12.3 12.3 13.0 13.8 13.7 13.8 12.7 13.0 12.8 FLOWS OF FORMAL LABOUR FORCE 13.3 2.7 5.3 0.0 5.7 -1.9 -5.2 -0.2 12.6 4.6 -6.0 -1.9 1.7 3.2 -0.9 New unemployed first-job seekers 16.8 14.4 16.3 2.7 6.5 2.4 1.9 3.0 9.0 3.7 2.6 3.4 0.8 0.8 0.7 Redundancies 83.5 82.2 90.3 18.7 22.3 22.6 17.9 20.9 28.9 27.1 18.5 19.6 8.2 10.6 6.1 Registered unemployed who found employment 57.0 61.0 58.3 13.4 12.9 17.3 14.0 13.5 13.5 17.2 18.1 15.8 4.0 5.0 5.2 Other outflows from unemployment (net) 29.9 32.8 43.1 8.0 10.2 9.6 11.1 10.7 11.8 9.2 9.1 9.2 3.3 3.3 2.6 WORK PERMITS FOR FOREIGNERS 41.6 35.6 33.9 34.7 34.3 34.2 34.4 33.9 33.2 32.6 31.7 29.8 34.2 34.2 34.2 As % of labour force 4.4 3.8 3.7 3.7 3.7 3.7 3.7 3.7 3.6 3.6 3.5 3.3 3.7 3.7 3.7 Source of data: SURS, PDII, ESS. Note: 'In January 2005, the SORS adopted new methodology of obtaining data on persons in paid employment. The new source of data for employed and self-employed persons excluding farmers is the Statistical Register of Employment (SRE), while data on farmers are forecast using the ARIMA model based on quarterly figures for farmers from the Labour Force Survey. ^According to ESS. 2012 2013 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 925.4 926.0 923.7 921.3 917.4 914.5 913.8 918.0 916.5 911.0 913.0 912.9 912.7 914.3 914.0 913.1 911.5 909.8 910.2 916.7 917.5 814.5 816.9 816.9 815.7 810.5 808.4 808.3 807.1 805.0 792.9 788.7 788.9 790.1 793.0 795.4 796.5 794.4 793.2 795.5 798.0 798.2 35.3 37.7 37.8 37.9 37.2 37.4 37.6 37.5 37.4 37.4 37.5 37.3 37.4 38.7 39.0 39.1 38.1 38.1 38.1 38.5 38.4 266.1 266.6 266.6 265.7 264.0 263.2 262.2 261.1 259.5 251.9 249.8 249.5 250.3 251.6 252.6 253.1 253.4 253.1 254.0 254.8 254.6 184.6 184.4 184.2 183.8 182.9 182.5 182.1 181.8 181.2 178.4 177.8 177.8 177.9 177.5 177.7 177.7 177.6 177.3 177.6 178.1 178.3 61.0 61.7 61.8 61.4 60.5 60.2 59.6 59.0 58.1 53.5 52.0 51.8 52.4 54.0 54.8 55.2 55.5 55.5 56.0 56.1 55.8 513.1 512.6 512.5 512.1 509.3 507.9 508.5 508.5 508.1 503.7 501.4 502.1 502.4 502.6 503.8 504.3 502.9 502.0 503.4 504.7 505.3 50.9 51.1 51.2 51.2 50.8 50.8 50.7 50.2 50.2 49.6 49.2 49.4 49.2 49.3 49.3 49.4 49.1 49.2 48.9 48.8 49.0 121.5 121.6 121.7 121.4 120.3 119.8 120.8 121.1 121.3 120.6 120.4 120.8 121.0 120.9 121.2 121.3 120.3 120.0 121.2 121.6 121.8 722.7 723.0 723.1 722.1 717.7 715.6 715.2 713.7 711.6 699.9 695.5 695.8 696.9 698.2 700.3 701.5 699.8 698.6 700.5 701.7 701.5 667.9 667.7 667.7 666.7 662.8 660.9 660.5 659.2 657.7 648.3 645.3 645.8 646.4 647.0 648.7 649.7 648.0 647.0 648.6 649.7 649.9 54.8 55.3 55.4 55.3 55.0 54.7 54.7 54.5 53.9 51.6 50.3 50.0 50.5 51.1 51.5 51.8 51.8 51.6 51.9 52.0 51.7 91.8 93.9 93.8 93.6 92.8 92.8 93.1 93.4 93.4 93.1 93.2 93.0 93.2 94.8 95.1 95.0 94.6 94.6 95.0 96.3 96.7 110.9 106.8 106.8 105.6 106.9 106.1 105.4 110.9 111.5 118.1 124.3 124.1 122.6 121.3 118.6 116.6 117.1 116.6 114.7 118.7 119.3 52.0 51.7 50.9 50.5 51.2 50.9 50.5 53.3 53.3 54.9 57.2 56.9 56.9 57.3 56.7 56.2 57.3 57.4 56.5 58.5 58.7 12.0 11.4 10.7 10.3 10.2 10.1 10.1 14.2 14.0 13.8 14.4 14.4 13.8 13.1 13.1 12.6 12.5 12.2 12.1 15.3 15.6 38.6 38.5 38.1 37.7 37.9 37.4 37.1 37.0 37.1 40.2 41.2 40.9 40.1 39.5 39.5 38.9 38.6 38.3 37.5 37.0 36.8 40.0 40.0 39.0 38.4 38.2 37.7 37.5 38.3 38.7 41.6 43.6 43.8 42.8 41.8 40.5 39.6 39.2 38.9 38.4 38.8 39.2 56.3 55.4 55.0 54.7 54.6 54.6 54.3 54.3 53.6 53.8 54.7 54.4 54.2 54.6 54.4 53.9 54.7 54.5 55.7 55.7 55.7 36.7 34.2 33.4 31.9 32.1 31.4 31.2 31.5 31.9 35.6 40.3 39.2 38.4 35.8 33.9 31.4 31.0 30.5 29.4 28.2 28.0 12.0 11.8 11.6 11.5 11.7 11.6 11.5 12.1 12.2 13.0 13.6 13.6 13.4 13.3 13.0 12.8 12.9 12.8 12.6 13.0 13.0 11.6 11.3 11.0 10.9 11.0 11.0 10.9 11.4 11.6 12.7 13.4 13.5 13.2 12.8 12.4 12.1 12.0 11.9 11.7 12.1 12.1 12.5 12.4 12.2 12.2 12.4 12.4 12.3 12.9 12.9 13.3 13.8 13.8 13.7 13.8 13.6 13.5 13.8 13.9 13.6 14.0 14.1 -4.2 -1.8 -2.3 -1.2 1.3 -0.8 -0.6 5.4 0.6 6.6 6.2 -0.2 -1.4 -1.3 -2.8 -2.0 0.5 -0.5 -1.9 4.1 0.6 0.8 0.7 0.6 0.6 0.8 0.8 1.4 6.3 1.8 0.9 1.5 1.1 1.1 1.1 0.8 0.8 1.0 0.9 1.5 6.0 2.0 5.9 6.5 5.8 5.6 8.0 5.6 7.3 8.4 8.2 12.2 14.2 6.3 6.6 7.1 6.1 5.3 7.7 5.5 6.4 7.2 7.0 7.1 5.5 4.7 3.9 4.0 4.0 5.5 4.9 5.1 3.4 6.2 4.8 6.2 6.3 6.5 5.3 5.3 4.1 6.4 5.4 5.2 3.7 3.5 4.1 3.5 3.5 3.3 3.8 4.3 4.3 3.2 3.4 2.8 3.0 3.1 3.2 2.7 2.9 2.9 3.4 3.8 3.3 34.2 34.7 34.4 34.1 33.8 33.9 33.9 33.6 33.3 32.7 32.9 32.8 32.2 32.3 32.0 31.0 30.4 29.8 29.3 28.5 27.9 3.7 3.7 3.7 3.7 3.7 3.7 3.7 3.7 3.6 3.6 3.6 3.6 3.5 3.5 3.5 3.4 3.3 3.3 3.2 3.1 3.0 WAGES AND INDICATORS OF OVERALL COMPETITIVENESS 2010 2011 2012 2011 2012 2013 2012 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 1 2 3 GROSS WAGE PER EMPLOYEE, y-o-y growth rates, % Activity - Total 3.9 2.0 0.1 1.7 1.1 1.6 0.3 -0.7 -1.0 -1.0 -0.5 0.3 2.2 2.0 0.7 A Agriculture, forestry and fishing 5.7 3.1 -1.1 1.1 0.4 0.1 -1.0 -1.5 -2.0 -0.8 1.1 0.0 2.1 0.3 -2.1 B Mining and quarrying 4.0 3.9 3.6 5.8 5.9 8.4 10.6 2.2 -5.2 4.1 -6.8 -2.9 10.0 11.9 3.8 C Manufacturing 8.9 3.9 2.5 3.5 3.1 3.4 2.5 2.0 2.3 1.6 2.9 3.0 4.5 3.8 1.9 D Electricity, gas, steam and air conditioning supply 3.8 2.3 3.3 3.5 -0.5 5.6 3.9 4.9 -0.5 6.2 2.8 3.6 5.5 8.0 3.6 E Water supply sewerage, waste management and remediation activities 2.2 -0.1 0.1 1.1 -2.7 2.1 -0.5 0.4 -1.4 0.3 0.1 1.0 3.1 2.8 0.5 F Constrution 4.5 1.9 -2.5 0.3 0.5 -0.3 -2.8 -2.8 -3.8 -2.4 -2.1 0.1 1.1 1.4 -3.1 G Wholesale and retail trade, repair of motor vehicles and motorcycles 3.7 2.8 0.8 2.3 3.0 2.1 1.6 0.0 -0.3 -0.2 0.0 0.6 3.3 2.2 1.0 H Transportation and storage 2.0 2.7 -0.4 3.9 1.6 2.2 0.6 -1.7 -2.3 -1.1 0.2 -0.9 3.7 0.8 2.0 I Accommodation and food service activities 4.0 2.1 -0.8 2.0 -0.6 -0.4 -0.7 -1.0 -1.1 -1.3 -0.7 -0.6 0.2 0.4 -1.7 J Information and communication 2.6 0.9 -0.4 1.8 -0.2 0.3 1.3 -1.2 -2.0 -0.6 -2.7 -1.1 0.1 0.2 0.5 K Financial and insurance activities 1.0 0.7 1.1 0.8 -2.4 4.5 -1.7 2.2 -0.3 -2.1 1.2 1.2 1.5 8.4 3.8 L Real estate activities 2.9 3.0 -0.6 3.4 1.6 1.1 -1.3 -0.6 -1.3 -1.1 0.2 -0.6 2.3 2.5 -1.5 M Professional, scientific and technical activities 1.6 -0.4 -1.1 -0.6 -1.6 -0.5 -0.8 -1.7 -1.3 -2.2 -3.4 -1.5 0.0 -0.5 -1.1 N Administrative and support service activities 4.0 3.5 0.7 3.9 2.7 3.0 0.3 -0.9 0.2 -2.4 0.7 0.7 2.1 5.1 2.0 O Public administration and defence, compulsory social security -0.6 0.3 -1.8 -0.1 -0.4 -0.2 -1.5 -3.2 -2.4 -2.4 -2.1 -0.6 0.6 -0.4 -0.7 P Education 0.6 0.2 -3.3 -0.3 0.4 -0.3 -2.2 -5.0 -5.6 -5.4 -4.2 -2.0 0.1 -0.6 -0.5 Q Human health and social work activities -0.3 -0.7 -1.3 -0.5 -0.5 -0.5 -1.0 -1.7 -2.1 -2.3 -2.3 -2.2 -0.5 -0.4 -0.6 R Arts, entertainment and recreation 0.5 -0.7 -2.8 -1.0 -0.3 -0.6 -1.5 -4.4 -4.6 -5.7 -3.8 -1.4 -1.3 -1.9 1.3 S Other service activities 4.2 0.9 -0.9 0.6 -1.1 0.5 -0.6 -1.0 -2.4 -0.6 -0.7 -1.1 2.0 -0.4 0.0 INDICATORS OF OVERALL COMPETITIVENESS1, y-o-y growth rates, % Effective exchange rate,2 nominal -2.1 -0.1 -1.2 0.4 0.1 -0.5 -1.3 -1.8 -1.4 0.2 0.6 1.4 -0.1 -0.4 -0.9 Real (deflator HICP) -1.8 -1.0 -1.1 -1.2 -0.5 -0.9 -1.3 -1.2 -0.8 0.9 0.8 1.7 -0.9 -0.6 -1.3 Real (deflator ULC) -1.6 -2.3 -2.9 -2.1 -2.9 -2.0 -3.3 -3.6 -2.9 -2.7 -1.8 -1.2 USD/EUR 1.3268 1.3917 1.2856 1.4126 1.3480 1.3110 1.3196 1.2515 1.2974 1.3204 1.3066 1.3246 1.2905 1.3224 1.3201 Source of data: SURS, ECB; calculations by IMAD. Note: 1 Change of the source for effective exchange rate series as of April 2012: a new source, ECB; before that, own calculations (IMAD). 2 Harmonised effective exchange rate - a group of 20 EU Member States and 17 euro area countries; an increase in value indicates appreciation of the national currency and vice versa. 2012 2013 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 1.0 1.3 -1.3 -0.1 -0.7 -1.2 0.4 -2.4 -0.7 -0.3 -1.7 -1.0 -0.2 -0.8 -0.4 0.8 -0.4 0.4 0.7 0.3 -0.1 -0.5 -2.5 1.3 -1.9 -3.9 2.5 -5.9 -2.0 1.8 -4.6 0.2 0.6 1.5 1.1 2.2 -3.6 1.5 0.9 1.9 4.0 14.9 13.2 1.4 5.4 -0.2 1.5 1.7 -18.0 10.4 0.6 1.1 -5.4 -10.3 -4.8 -1.8 -4.9 -1.8 5.1 -13.0 2.7 3.9 1.0 4.3 1.3 0.3 5.2 0.5 1.4 3.5 0.3 1.1 4.4 2.3 2.0 3.4 2.0 3.7 2.4 4.4 5.2 6.5 0.3 4.0 2.6 8.3 7.8 -6.6 -0.5 5.0 2.6 10.9 6.6 0.7 1.3 10.0 3.1 -2.1 7.4 -0.9 0.4 0.7 -2.5 4.0 -0.1 -2.6 2.2 -7.0 1.5 2.7 -1.1 -0.8 1.6 -0.2 -1.1 -0.5 1.7 1.7 0.9 0.8 -1.3 -0.4 -6.6 -1.4 -1.9 -5.1 0.2 -6.8 -4.6 -1.2 -3.0 -2.9 -2.2 -3.2 -0.9 1.1 -1.7 0.9 -1.1 -2.5 2.9 1.8 0.0 0.7 0.5 -1.0 0.5 -0.8 -0.6 -0.6 -0.5 0.4 -0.5 0.6 -0.1 1.1 -0.4 1.1 0.8 1.3 1.5 2.1 -1.9 -6.3 -1.3 2.7 -1.1 -3.9 -1.6 -1.1 -1.4 -0.8 0.7 0.3 -0.4 1.7 0.3 -4.7 2.5 -2.7 -1.4 0.5 -1.2 -0.1 -1.1 -1.9 -0.9 -0.9 -1.4 -2.4 -1.3 -0.2 0.1 -0.6 -1.7 -0.7 -1.0 -0.1 0.8 -0.6 2.3 1.7 -0.1 0.8 -1.2 -3.1 0.1 -7.1 1.6 -1.1 -0.5 -0.1 -4.3 -1.9 -1.9 -0.8 -1.8 -0.6 -1.1 -2.3 -0.4 -4.4 -0.2 1.8 1.8 3.0 3.5 -4.0 0.3 -1.0 -3.6 -1.6 0.4 3.5 -0.1 4.0 -1.4 1.0 2.7 -3.0 -0.1 -1.3 -2.4 0.1 -1.0 -1.1 0.1 -2.3 -1.6 -0.4 -2.1 -0.7 -0.2 0.6 0.2 -0.3 -1.4 0.0 0.5 0.4 -0.7 1.0 -2.7 -0.8 -1.9 -2.4 -0.9 -1.9 -1.0 -0.3 -3.5 -2.8 -3.0 -4.1 -3.0 -2.3 -2.4 0.3 -2.1 -2.6 -0.2 1.7 -0.6 -0.1 0.0 -2.5 1.4 -1.1 0.5 -0.5 -4.3 -2.3 1.4 0.0 0.9 0.8 0.2 1.3 1.0 2.1 -0.7 -0.3 -3.5 -3.4 -3.3 -2.9 -2.9 -2.6 -1.6 -1.7 -2.9 -2.6 -2.2 -3.0 -1.0 -0.4 -0.8 -0.6 0.8 -1.0 -1.5 -0.4 -4.6 -4.8 -5.0 -5.2 -5.8 -5.8 -5.3 -5.9 -5.0 -5.4 -4.2 -5.8 -2.5 -2.4 -2.2 -1.3 -1.5 -1.4 -0.3 -1.0 -1.6 -2.2 -2.0 -1.0 -2.8 -3.0 -0.4 -2.7 -2.5 -1.6 -3.0 -2.1 -1.7 -2.2 -1.8 -2.4 -1.8 -0.4 -0.9 0.0 -3.5 -4.1 -3.6 -5.4 -6.3 -3.9 -3.7 -4.7 -4.7 -7.5 -4.0 -3.2 -4.2 -0.7 -2.6 -0.9 -1.4 -0.5 -0.6 0.1 -1.2 -0.1 -2.2 -0.7 -1.2 -4.0 -1.9 -0.8 -0.1 -0.7 1.0 -1.2 -1.9 -0.8 -1.2 -1.2 0.9 -0.5 -1.2 -1.2 -1.5 -1.8 -2.1 -1.5 -1.6 -1.7 -0.9 0.1 0.4 0.1 0.2 0.4 1.1 1.6 2.0 1.3 1.3 1.5 -1.1 -1.4 -1.5 -1.5 -1.5 -0.5 -1.0 -1.3 -0.2 0.8 1.3 0.5 0.4 0.4 1.6 2.7 2.7 1.4 1.3 1.5 1.3162 1.2789 1.2526 1.2288 1.2400 1.2856 1.2974 1.2828 1.3119 1.3288 1.3359 1.2964 1.3026 1.2982 1.3189 1.3080 1.3310 1.3348 1.3635 1.3493 PRICES 2011 2012 2013 2011 2012 2013 2011 2012 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 10 11 12 1 2 CPI, y-o-y growth rates, % 1.8 2.6 1.8 2.5 2.5 2.5 2.9 2.6 2.3 1.5 2.1 1.1 2.7 2.7 2.0 2.3 2.9 Food, non-alcoholic beverages 4.4 4.1 3.6 5.1 3.9 4.2 3.9 4.4 4.4 3.6 4.1 2.3 5.6 4.8 4.9 3.9 3.9 Alcoholic beverages, tobacco 5.7 6.5 7.0 4.9 4.2 5.1 7.2 9.5 10.6 7.5 7.4 3.0 4.8 4.9 4.9 4.1 3.9 Clothing and footwear -1.5 -0.2 0.2 0.9 -2.2 1.6 0.7 -0.8 2.1 -1.2 1.0 -0.8 2.0 2.1 -1.5 -2.2 -3.5 Housing, water, electricity, gas 5.6 3.8 3.1 5.4 4.9 4.2 4.4 1.8 2.1 2.9 2.8 4.6 5.5 5.7 5.0 4.7 5.3 Furnishings, household equipment 2.7 0.1 -1.2 1.7 1.2 0.0 -0.1 -0.9 -1.1 -1.8 -1.2 -0.6 1.8 2.0 1.4 1.3 1.5 Medical, pharmaceutical products 1.6 0.4 -0.5 0.3 -0.2 1.4 0.2 0.3 -0.2 -2.1 0.4 0.1 0.5 0.2 0.0 -0.3 -0.3 Transport 1.0 3.3 0.3 1.7 2.6 3.2 3.9 3.5 1.5 -0.5 0.5 -0.4 1.9 1.9 1.4 2.0 2.5 Communications 1.2 -2.4 -1.2 -1.8 -1.2 -2.9 -3.6 -2.0 -3.8 -1.9 1.2 -0.1 -1.8 -0.3 -3.3 -0.1 -1.2 Recreation and culture -1.5 1.4 0.1 -0.8 2.6 1.2 1.2 0.4 -0.3 -0.5 0.6 0.4 -0.3 -0.9 -1.2 0.8 6.8 Education 1.7 2.9 2.6 1.4 1.1 1.3 4.3 4.8 4.6 4.6 1.4 -0.1 1.8 0.9 1.6 1.0 1.1 Catering services -6.8 4.5 6.5 2.0 2.3 2.5 3.7 9.4 9.2 8.8 7.0 1.6 2.0 2.0 2.2 2.5 2.4 Miscellaneous goods & services 2.2 2.4 1.3 2.6 2.5 1.2 3.3 2.8 2.4 2.7 0.5 -0.5 2.4 2.5 2.8 2.9 2.7 HCPI 2.1 2.8 1.9 2.6 2.5 2.5 3.2 3.0 2.7 1.8 2.2 1.1 2.9 2.8 2.1 2.3 2.8 Core inflation (excluding fresh food and energy) 1.3 2.0 1.6 2.3 2.2 1.8 2.0 1.9 1.9 1.4 1.9 1.2 2.3 2.5 2.1 2.4 2.6 PRODUCER PRICE INDICES, y-o-y growth rates, % Total 4.5 0.9 0.0 3.6 1.3 0.8 0.6 0.6 0.8 0.2 -0.2 -0.6 3.7 3.6 3.6 2.4 0.8 Domestic market 3.8 1.0 0.3 2.9 1.1 0.9 0.9 1.2 1.1 0.3 0.1 -0.3 3.1 2.9 2.6 1.9 0.7 Non-domestic market 5.3 0.7 -0.2 4.4 1.6 0.7 0.4 0.1 0.4 0.2 -0.6 -0.9 4.3 4.3 4.5 3.0 0.9 euro area 6.1 0.1 -0.4 4.6 0.8 0.2 0.1 -0.5 0.4 0.0 -0.7 -1.3 4.4 4.7 4.7 2.8 -0.1 non-euro area 3.6 2.0 0.3 3.8 3.4 2.0 1.3 1.5 0.6 0.7 -0.3 0.0 4.1 3.5 4.0 3.5 3.3 Import price indices 5.4 1.9 -0.4 2.9 1.9 1.2 1.3 3.2 0.8 -0.5 -0.3 -1.5 4.1 3.0 1.8 0.9 2.1 PRICE CONTROL,1 y-o-y growth rates, % Energy prices 10.9 12.7 10.8 12.1 12.5 14.5 11.6 5.6 0.1 -0.7 10.8 11.9 9.7 10.3 12.0 Oil products 11.9 13.0 11.7 12.3 12.7 14.4 12.6 6.4 0.4 0.4 12.3 12.7 10.3 10.5 12.2 Transport & communications 1.1 1.6 1.1 0.7 0.0 0.0 5.7 8.6 8.6 17.3 1.1 1.1 1.1 1.1 1.1 Other controlled prices 0.0 -0.6 -0.2 -0.2 -0.3 0.1 -1.8 -3.9 -2.9 -0.8 -0.2 -0.2 -0.2 -0.2 -0.2 Direct control - total 2.8 9.2 2.1 7.3 9.5 11.0 8.9 4.3 0.5 1.0 2.2 2.9 1.3 2.0 9.5 Source of data: SURS; calculations by IMAD. Note: 1 The structure of groups varies. Data for individual years are not fully comparable to those published previously. On 1 July 2007, the electricity market was liberalised. Since July 2007, the data are not comparable. 2 After a longer period of unchanged prices, at the beginning of 2013, the Decree on the pricing of mandatory local public services in the field of environmental protection (Official Gazette of the RS, No. 87/2012) transferred the responsibility for approving price changes to local communities. 2012 2013 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 2.3 2.6 2.4 2.3 2.4 2.9 3.3 2.7 2.3 2.7 2.4 2.7 2.0 1.5 1.2 1.9 2.6 2.2 1.4 1.3 1.3 0.7 4.0 4.7 4.3 3.7 4.1 3.7 4.0 4.3 4.2 4.7 5.2 4.1 3.9 3.3 3.1 4.4 4.4 4.3 3.5 2.4 2.2 2.2 4.7 5.1 5.2 5.1 7.4 7.1 7.0 9.6 9.5 9.4 11.2 10.7 10.0 7.8 7.4 7.5 7.5 7.5 7.1 3.0 3.0 3.0 -1.2 0.2 3.0 1.6 0.8 1.8 -0.3 -1.5 -1.7 0.8 1.6 6.5 -1.3 0.0 -3.1 -0.5 1.1 0.1 1.7 0.3 0.1 -2.9 4.7 4.0 3.7 4.9 3.9 4.2 5.2 2.7 1.5 1.3 0.7 2.8 2.9 3.3 2.8 2.5 3.4 2.7 2.1 3.9 4.8 5.2 0.8 0.7 0.1 -0.7 -0.3 0.1 -0.2 -0.8 -1.2 -0.7 -0.5 -1.5 -1.1 -2.2 -1.9 -1.4 -1.3 -0.8 -1.5 -0.4 -0.4 -0.9 0.1 1.5 1.5 1.3 0.1 0.2 0.3 0.3 0.4 0.2 -0.1 0.2 -0.7 -2.0 -2.1 -2.2 0.0 0.3 0.7 0.0 0.0 0.2 3.3 4.1 2.8 2.6 2.4 4.5 4.7 3.9 3.3 3.4 2.0 1.9 0.6 -0.9 -0.9 0.2 2.0 0.0 -0.4 -0.6 -0.3 -0.3 -2.4 -2.6 -3.2 -2.8 -3.1 -4.4 -3.2 -1.6 -3.3 -1.1 -3.6 -4.6 -3.2 -2.2 -2.3 -1.3 0.0 2.5 1.1 1.6 -0.5 -1.5 0.4 0.9 1.2 1.6 1.3 1.2 1.2 0.1 0.9 0.2 -0.4 -0.4 -0.1 -0.4 -0.5 -0.6 0.7 0.9 0.2 0.9 0.4 -0.1 1.2 1.3 1.3 1.3 1.3 5.9 5.7 4.8 5.0 4.7 4.6 4.7 4.7 4.6 4.6 4.6 4.6 0.1 -0.5 0.1 -0.3 0.0 2.1 2.8 2.6 2.1 1.4 0.9 8.9 9.1 9.7 9.3 9.3 9.2 9.0 8.6 8.6 9.1 9.6 9.9 2.0 2.0 1.5 1.4 1.9 1.9 1.1 0.6 2.5 3.7 3.7 3.1 2.9 2.4 2.4 2.5 2.4 2.1 2.9 3.1 1.2 0.2 0.1 0.7 1.0 -3.2 2.4 2.9 2.4 2.4 2.6 3.1 3.7 3.2 2.8 3.1 2.8 2.9 2.2 1.6 1.6 2.2 2.8 2.2 1.5 1.1 1.2 0.9 1.6 1.9 1.9 1.7 1.9 2.0 2.0 1.9 1.8 2.0 1.9 2.2 1.6 1.4 1.3 1.5 2.0 2.1 1.7 1.6 1.4 0.7 0.7 0.7 1.0 0.7 0.8 0.4 0.7 0.8 0.7 0.4 0.4 1.1 0.8 0.5 0.2 0.0 -0.3 0.0 -0.4 -0.5 -0.7 -0.5 0.6 0.7 1.3 0.8 0.9 0.8 0.9 1.2 1.3 1.0 1.1 1.1 1.1 0.6 0.1 0.1 0.1 0.2 0.1 -0.2 -0.4 -0.3 0.8 0.8 0.8 0.5 0.6 0.1 0.6 0.4 0.1 -0.2 -0.3 1.0 0.5 0.5 0.3 -0.2 -0.6 -0.2 -0.9 -0.9 -1.1 -0.7 -0.2 0.0 0.4 0.1 0.5 -0.5 0.2 -0.1 -0.6 -0.8 -0.8 1.2 0.7 0.3 0.0 -0.4 -0.8 -0.3 -1.0 -1.0 -1.5 -1.4 3.4 2.8 1.7 1.4 1.0 1.3 1.6 1.7 1.8 1.1 1.0 0.6 0.2 0.8 1.1 0.3 -0.3 0.0 -0.6 -0.4 -0.3 0.8 2.8 2.0 1.2 0.3 0.1 1.1 2.7 2.9 3.7 3.0 2.1 0.6 -0.3 -0.6 -1.3 0.5 1.2 -0.4 -1.6 -1.5 -2.0 -0.9 13.8 14.7 11.8 10.9 10.1 14.6 18.8 14.7 10.4 9.8 7.5 6.4 2.9 -0.6 -0.7 1.8 3.8 -1.3 -4.2 -5.9 -3.8 14.2 15.3 11.9 10.8 9.2 14.4 19.4 15.8 11.4 10.5 8.1 7.7 3.6 -0.8 -0.9 3.1 5.5 -0.3 -3.5 -2.4 -0.2 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 8.6 8.6 8.6 8.6 8.6 8.6 8.6 8.6 17.3 17.3 17.3 17.3 8.0 -0.3 -0.3 -0.3 -0.3 0.1 0.1 0.1 -3.0 -1.1 -1.1 -3.9 -3.9 -3.9 -3.8 -3.8 -1.1 -0.8 -0.8 -0.8 2.7 0.8 10.6 11.1 9.0 8.5 7.9 11.0 14.0 10.1 8.5 8.1 5.6 4.9 2.4 -0.1 -0.3 2.0 4.3 0.5 -1.6 -1.4 -1.0 BALANCE OF PAYMENTS 2010 2011 2012 2011 2012 2013 2011 2012 Q^ Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 11 12 1 2 BALANCE OF PAYMENTS, in EUR m Current account -50 146 1,159 -47 0 96 262 320 482 489 704 631 7 -91 -23 -76 Goods1 -830 -957 -110 -194 -356 -149 -45 60 24 134 251 254 -106 -211 -115 -39 Exports 18,973 21,450 21,631 5,285 5,403 5,364 5,559 5,283 5,424 5,393 5,660 5,450 1,913 1,641 1,646 1,726 Imports 19,804 22,407 21,741 5,479 5,758 5,514 5,604 5,223 5,400 5,259 5,409 5,196 2,019 1,851 1,761 1,765 Services 1,281 1,476 1,803 377 375 418 444 528 414 506 539 573 127 97 152 106 Exports 4,593 4,842 5,166 1,393 1,217 1,118 1,237 1,502 1,310 1,206 1,318 1,549 381 421 377 325 Imports 3,312 3,365 3,363 1,016 841 700 793 974 896 700 779 976 254 325 225 219 Income -588 -524 -552 -235 -81 -145 -168 -198 -42 -73 -108 -126 -37 -14 -35 -41 Receipts 583 936 699 221 259 131 188 174 206 223 206 198 78 100 41 42 Expenditure 1,172 1,460 1,251 456 340 276 356 372 247 296 314 323 115 114 77 83 Current transfers 88 151 18 4 62 -28 31 -70 86 -78 22 -70 24 38 -25 -101 Receipts 1,231 1,404 1,410 319 371 348 366 285 411 333 356 293 117 158 73 68 Expenditure 1,143 1,253 1,392 315 310 377 336 355 325 412 334 363 94 120 97 169 Capital and financial account 530 -474 -1,206 -81 -175 67 -249 -540 -484 -879 -754 -830 -53 176 87 152 Capital account 54 -85 -92 -3 -80 -24 11 -30 -49 -5 -40 -31 11 -91 -4 -6 Financial account 476 -389 -1,114 -78 -94 91 -260 -511 -434 -874 -714 -799 -64 267 90 158 Direct investment 428 633 166 260 151 146 98 84 -162 -62 -649 -6 -51 285 -53 77 Domestic abroad 156 -85 212 54 -156 41 127 39 5 -110 51 -2 3 -83 -12 17 Foreign in Slovenia 272 718 -46 206 307 105 -29 45 -167 47 -700 -4 -54 367 -41 60 Portfolio investment 1,956 1,839 -218 -441 -20 -923 124 -982 1,564 132 2,101 -424 -179 -66 221 -820 Financial derivatives -117 -155 -203 -28 -24 -23 -21 -31 -129 23 -224 -117 2 -18 0 9 Other investment -1,810 -2,777 -890 98 -221 851 -455 439 -1,726 -1,033 -1,922 -170 120 76 -10 834 Assets 779 -1,490 -1,474 -363 567 -1,466 -95 205 -118 -1,284 -635 143 301 628 -612 102 Commercial credits -174 -49 65 44 316 -347 -35 109 339 -364 -49 90 42 409 -86 -85 Loans 203 -55 -319 48 19 3 -95 84 -310 25 -180 89 23 44 22 128 Currency and deposits 669 -1,341 -1,177 -422 249 -1,131 11 -33 -24 -928 -332 -44 233 203 -544 42 Other assets 81 -46 -45 -33 -18 10 24 45 -124 -17 -73 7 3 -29 -3 17 Liabilities -2,589 -1,287 584 461 -788 2,317 -359 234 -1,608 251 -1,287 -312 -181 -551 602 732 Commercial credits 362 107 265 -82 17 161 136 -96 63 -300 93 -197 133 -96 -79 147 Loans -986 -1,234 -729 203 -752 -121 -223 -178 -208 374 602 -530 -429 -121 77 -211 Deposits -1,954 -169 1,026 340 -57 2,287 -288 530 -1,503 188 -1,981 429 103 -319 550 833 Other liabilities -11 9 23 0 3 -11 17 -22 39 -12 -2 -15 12 -15 54 -36 International reserves2 19 72 31 33 19 39 -6 -21 19 67 -19 -83 44 -10 -68 59 Statistical error -480 328 47 128 174 -163 -13 220 2 390 50 199 46 -85 -64 -76 EXPORTS AND IMPORTS BY END-USE OF PRODUCTS, in EUR m Export of investment goods 1,875 2,042 2,112 514 540 477 569 514 552 517 525 518 179 186 144 159 Intermediate goods 10,172 12,008 12,138 3,024 2,931 3,063 3,101 3,019 2,955 3,077 3,184 3,138 1,058 837 957 996 Consumer goods 6,592 6,950 6,811 1,631 1,803 1,685 1,734 1,604 1,788 1,677 1,832 1,679 632 573 500 528 Import of investment goods 2,324 2,505 2,402 589 736 562 584 570 687 646 664 559 226 307 174 159 Intermediate goods 12,247 14,107 14,005 3,472 3,490 3,636 3,578 3,410 3,382 3,477 3,465 3,299 1,262 1,018 1,171 1,171 Consumer goods 5,530 5,943 5,671 1,502 1,524 1,435 1,400 1,350 1,486 1,394 1,488 1,478 537 483 447 456 Source of data: BS, SURS. Note: "Exports and imports (F.O.B.) include also the adjustment for exports and imports of goods by ITRS and duty-free shops reports. 2Reserve assets of the BS. 2012 2013 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 910 11 195 89 23 150 59 61 200 196 230 56 63 82 343 299 143 263 256 164 211 170 80 4 7 -31 -21 48 -73 84 43 98 -117 -49 59 124 136 -15 129 142 18 94 62 -3 1,992 1,807 1,862 1,891 1,829 1,606 1,848 1,961 1,926 1,537 1,718 1,740 1,935 1,965 1,851 1,844 1,964 1,557 1,930 2,029 1,904 1,988 1,800 1,892 1,912 1,781 1,679 1,764 1,918 1,828 1,654 1,767 1,681 1,811 1,829 1,866 1,715 1,822 1,538 1,836 1,967 1,907 161 148 156 140 147 189 192 183 145 86 168 123 215 172 186 181 199 206 168 150 129 417 392 410 434 512 512 477 467 415 427 389 352 464 429 436 453 531 533 485 454 410 256 244 254 295 366 323 285 284 270 341 221 229 250 257 249 272 332 327 318 303 281 -68 -44 -99 -25 -110 -32 -56 -8 -14 -19 -26 -24 -23 -30 -40 -37 -40 -42 -43 -46 -44 48 54 63 72 54 55 65 58 59 88 74 73 76 69 69 69 69 64 65 65 64 116 98 162 97 164 87 121 66 73 108 100 97 99 99 109 106 110 106 108 111 108 98 -23 -3 56 -25 -24 -21 -21 1 106 -30 -76 27 21 11 -10 -44 -19 -7 4 -3 207 97 113 156 112 85 88 90 109 212 86 95 152 139 115 102 100 91 101 101 87 110 120 116 100 137 109 109 112 108 106 116 171 125 118 104 112 145 110 109 98 90 -172 -168 -162 81 -55 -243 -242 -384 -348 248 -398 -89 -392 -326 -154 -274 -221 -291 -318 -389 -96 -14 24 5 -18 9 -10 -29 -13 -40 3 -1 -5 0 0 -27 -13 4 -12 -23 10 -3 -158 -193 -167 100 -65 -233 -213 -372 -308 245 -397 -84 -393 -326 -127 -261 -225 -279 -295 -399 -92 123 -92 144 45 87 -28 25 -45 31 -149 51 25 -138 -701 -4 56 52 2 -59 295 -65 36 -6 53 80 13 43 -16 -6 42 -32 -9 -7 -94 -8 22 38 -4 -2 4 63 -9 87 -86 91 -35 74 -71 41 -39 -11 -117 60 32 -45 -693 -26 18 56 4 -64 233 -56 -324 76 133 -86 -644 -152 -187 1,674 -54 -56 -156 17 271 -143 2,589 -346 -129 -90 -204 -24 1,823 -31 -6 -7 -7 -9 -3 -19 -44 -40 -44 -34 65 -8 -7 -67 -151 -83 -55 21 -59 -5 27 -171 -435 151 541 -46 -56 -1,982 -256 512 -281 -201 -551 508 -2,671 241 17 -138 -49 -611 -1,840 -956 -383 119 169 122 147 -64 -294 -422 597 -337 -374 -574 -221 -403 -11 -3 207 -61 -444 -131 -176 24 -32 -27 16 158 -65 -28 37 330 -62 -86 -217 -25 55 -80 -2 182 -90 -56 18 -147 -153 -28 86 40 51 -8 17 -49 -277 4 8 13 -71 -68 -41 11 75 4 -33 -17 -629 -258 164 105 36 -77 8 -132 -406 514 -274 -297 -357 -55 -396 120 -10 -59 25 -286 -84 -4 4 15 5 30 15 0 -151 -4 31 -5 1 -13 -69 6 -10 -1 8 0 -69 -48 983 212 -554 -18 419 -193 8 -1,688 166 -85 55 172 23 728 -2,268 252 19 -344 13 -167 -1,709 93 -16 -72 224 -8 -144 56 6 18 40 -234 86 -152 -5 34 64 -125 -138 66 76 136 14 103 -213 -114 -83 -62 -32 14 -194 -28 34 -151 492 675 -14 -59 -372 43 -200 12 -6 904 115 -278 -126 527 12 -9 -1,726 358 -136 274 234 -319 68 -2,299 251 524 -250 155 -259 -1,843 -29 10 9 -2 -17 1 -6 18 -17 38 -18 3 2 -10 12 -4 -7 0 -8 4 5 48 0 -2 -4 -41 -3 23 26 11 -18 22 11 33 17 25 -61 -82 3 -4 1 -6 -23 80 139 -231 -4 182 42 188 118 -304 335 6 49 28 11 12 -35 128 107 219 16 175 183 189 196 172 164 179 193 191 168 156 159 202 181 176 169 201 145 172 193 N/A 1,110 1,009 1,049 1,042 1,052 935 1,032 1,116 1,062 777 1,008 988 1,082 1,110 1,054 1,020 1,117 925 1,097 1,164 N/A 657 559 572 603 554 460 590 610 628 550 507 558 612 635 582 614 604 452 623 632 N/A 228 186 201 197 217 163 190 219 209 259 196 196 254 218 259 187 202 154 203 218 N/A 1,294 1,177 1,209 1,192 1,175 1,096 1,140 1,244 1,160 978 1,223 1,110 1,144 1,200 1,201 1,063 1,178 989 1,132 1,236 N/A 533 449 475 475 442 447 461 530 508 448 444 467 483 491 490 506 510 439 529 556 N/A MONETARY INDICATORS AND INTEREST RATES 2011 2012 2013 2011 2012 8 1 9 1 10 1 11 1 1 2 1 3 1 4 1 5 1 6 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 76 77 76 83 102 111 119 182 169 188 204 Central government (S. 1311) 4,299 5,057 6,554 3,328 3,355 3,387 3,436 4,299 4,465 4,580 4,801 4,752 4,796 4,811 Other government (S. 1312, 1313, 1314) 584 610 581 536 535 541 554 584 588 589 588 591 580 584 Households (S. 14, 15) 9,454 9,267 8,918 9,490 9,468 9,481 9,467 9,454 9,421 9,391 9,412 9,380 9,380 9,362 Non-financial corporations (S. 11) 20,876 19,470 14,956 21,537 21,369 21,444 21,434 20,876 20,976 20,896 20,933 20,922 20,843 20,693 Non-monetary financial institutions (S. 123, 124, 125) 2,229 2,135 1,786 2,292 2,298 2,286 2,277 2,229 2,210 2,234 2,323 2,320 2,300 2,291 Monetary financial institutions (S. 121, 122) 5,445 5,194 5,016 5,422 5,375 5,491 5,224 5,445 5,111 4,846 5,644 5,527 5,613 5,918 Claims on domestic sectors, TOTAL In domestic currency 35,692 34,558 29,697 35,854 35,763 35,970 35,784 35,692 35,407 35,334 36,103 35,955 35,979 36,202 In foreign currency 1,536 1,309 1,097 1,705 1,628 1,586 1,557 1,536 1,529 1,505 1,492 1,472 1,458 1,439 Securities, total 5,659 5,862 7,013 5,046 5,008 5,075 5,052 5,659 5,837 5,697 6,105 6,066 6,076 6,018 SELECTED OBLIGATIONS OF OTHER MFI ON DOMESTIC SECTORS, end of the month, in EUR m Deposits in domestic currency, total 28,420 29,582 27,050 27,423 27,337 27,631 27,376 28,420 28,359 27,926 30,197 30,165 30,208 30,322 Overnight 8,245 8,678 8,557 8,241 8,236 8,058 8,436 8,245 8,399 8,195 8,177 8,404 8,375 9,151 With agreed maturity -short-term 7,868 7,056 6,689 8,468 8,369 8,372 7,791 7,868 7,688 7,468 7,553 7,362 7,441 7,111 With agreed maturity -long-term 12,248 13,780 11,569 10,662 10,683 11,148 11,089 12,248 12,180 12,171 14,395 14,319 14,309 13,982 Short-term deposits redeemable at notice 59 68 235 52 49 53 60 59 92 92 72 80 83 78 Deposits in foreign currency, total 579 552 487 476 486 494 538 579 570 564 577 568 559 583 Overnight 386 372 324 305 320 329 365 386 391 384 384 385 381 397 With agreed maturity -short-term 133 123 91 108 109 109 114 133 117 120 132 124 116 125 With agreed maturity -long-term 59 56 72 62 57 55 58 59 61 59 60 58 61 60 Short-term deposits redeemable at notice 1 1 0 1 0 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 0.23 0.24 0.24 0.26 0.24 0.24 0.24 0.23 0.22 0.22 0.22 Time deposits with maturity of up to one year 2.15 2.31 1.86 2.18 2.17 2.24 2.27 2.28 2.39 2.35 2.38 2.38 2.37 2.29 New loans to households in domestic currency Housing loans, 5-10 year fixed interest rate 5.46 5.48 5.40 5.49 5.45 5.50 5.43 5.27 5.37 5.40 5.46 5.36 5.45 5.42 New loans to non-financial corporations in domestic currency Loan over EUR 1 million, 1-5 year fixed interest rate 5.69 5.32 3.86 6.48 5.91 4.25 5.20 6.51 3.79 3.00 6.04 5.81 6.27 5.83 INTEREST RATES OF THE EUROPEAN CENTRAL BANK, % Main refinancing operation^ 1.2^ 0.8^ 0.5^ 1.5^ 1.5^ 1.5^ 1.2^ 1.0^ 1.0^ 1.0^ 1.0^ 1.0^ 1.0^ 1.00 INTERBANK INTEREST RATES EURIBOR 3-month rates 1.39 0.57 0.22 1.55 1.54 1.58 1.48 1.43 1.22 1.05 0.86 0.74 0.68 0.66 6-month rates 1.64 0.83 0.34 1.75 1.74 1.78 1.71 1.67 1.50 1.35 1.16 1.04 0.97 0.93 LIBOR CHF 3-month rates 0.12 0.07 - 0.06 0.01 0.04 0.05 0.05 0.06 0.08 0.10 0.11 0.11 0.09 6-month rates 0.18 0.15 - 0.12 0.05 0.08 0.09 0.10 0.11 0.14 0.16 0.18 0.19 0.18 Source of data: BS, BBA - British Bankers' Association. 2012 2013 7 1 8 1 9 1 10 1 11 1 12 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 1 10 1 11 1 12 227 227 207 226 224 221 232 233 229 233 233 233 233 232 231 232 233 233 4,870 4,805 4,874 5,138 5,144 5,057 5,036 5,111 5,048 5,451 5,361 4,999 5,108 5,024 4,995 4,965 4,881 6,554 589 590 585 583 580 610 609 613 609 610 600 600 601 601 604 610 570 581 9,341 9,346 9,338 9,341 9,318 9,267 9,191 9,160 9,159 9,141 9,107 9,099 9,050 9,059 9,052 9,031 8,996 8,918 20,561 20,488 20,398 20,294 20,044 19,470 19,425 19,265 19,152 19,022 18,889 18,832 18,639 18,633 18,501 18,102 17,918 14,956 2,247 2,244 2,210 2,204 2,186 2,135 2,116 2,102 2,028 2,000 1,990 1,999 1,992 1,983 1,978 1,962 1,966 1,786 5,248 5,237 5,210 4,930 5,012 5,194 5,085 5,300 5,389 4,957 5,423 5,255 5,190 5,320 5,311 5,198 4,752 5,016 35,461 35,422 35,316 35,131 34,943 34,558 34,349 34,342 34,336 33,765 34,040 33,902 33,612 33,754 33,705 33,198 32,569 29,697 1,423 1,402 1,372 1,354 1,348 1,309 1,263 1,277 1,264 1,236 1,235 1,223 1,203 1,192 1,177 1,152 1,144 1,097 5,972 5,886 5,928 6,004 5,990 5,862 5,846 5,927 5,780 6,177 6,091 5,657 5,762 5,669 5,554 5,513 5,366 7,013 29,703 29,591 29,354 29,460 30,062 29,582 29,575 29,961 30,070 29,665 30,497 29,943 30,228 30,184 30,193 30,091 29,645 27,050 8,573 8,633 8,523 8,651 8,763 8,678 8,726 9,185 8,997 8,919 8,806 8,923 9,124 9,055 8,812 8,861 8,729 8,557 7,134 7,052 6,964 6,980 7,417 7,056 6,905 6,827 7,140 7,148 7,712 7,626 7,652 7,696 8,261 8,222 8,110 6,689 13,930 13,851 13,751 13,755 13,763 13,780 13,863 13,829 13,775 13,424 13,787 13,189 13,203 13,159 12,841 12,688 12,495 11,569 66 55 116 74 119 68 81 120 158 174 192 205 249 274 279 320 311 235 597 591 579 571 576 552 538 554 549 520 548 536 520 541 521 506 511 487 410 412 397 388 399 372 372 383 363 361 354 340 342 362 333 324 334 324 125 119 124 126 119 123 109 114 128 103 103 113 97 95 109 104 98 91 61 59 57 56 57 56 56 56 57 55 91 82 81 84 79 78 79 72 1 1 1 1 1 1 1 1 1 1 0 1 0 0 0 0 0 0 0.19 0.19 0.18 0.17 0.17 0.17 0.14 0.13 0.13 0.13 0.12 0.11 0.10 0.10 0.10 0.10 0.09 0.09 2.27 2.23 2.23 2.28 2.28 2.24 2.28 2.18 2.10 2.01 2.01 1.97 1.89 1.78 1.65 1.56 1.48 1.46 5.37 5.41 5.62 5.53 6.00 5.31 5.46 6.40 5.03 5.49 5.39 5.30 5.34 5.31 5.11 5.49 5.17 5.36 3.94 5.06 6.52 6.51 5.48 5.57 3.75 3.76 3.70 3.48 5.68 .. 3.03 2.66 3.37 3.73 4.71 4.59 0.7^ 0.7^ 0.7^ 0.7^ 0.75 0.7^ 0.7^ 0.7^ 0.7^ 0.7^ 0.5^ 0.5^ 0.5^ 0.5^ 0.5^ 0.5^ 0.2^ 0.25 0.50 0.33 0.25 0.21 0.19 0.19 0.20 0.22 0.21 0.21 0.20 0.21 0.22 0.23 0.23 0.22 0.28 0.29 0.78 0.60 0.48 0.41 0.36 0.32 0.34 0.36 0.33 0.32 0.30 0.32 0.34 0.34 0.34 0.33 0.37 0.40 0.07 0.05 0.05 0.02 0.03 0.01 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 0.02 - - 0.18 0.16 0.16 0.11 0.12 0.07 0.08 0.08 0.09 0.08 0.08 0.08 0.08 0.08 0.08 0.08 - - PUBLIC FINANCE 2010 2011 2012 2011 2012 2013 2012 Q^ Q4 Q1 1 Q2 1 Q3 1 Q4 Q1 1 Q2 1 Q3 4 1 5 CONSOLIDATED BALANCE OF PUBLIC FINANCING (GFS-IMF methodology), current prices, EUR m GENERAL GOVERNMENT REVENUES TOTAL REVENUES 14,794.0 14,982.3 14,999.1 3,538.4 4,016.5 3,618.4 3,712.2 3,577.2 4,091.3 3,419.9 3,495.0 3,733.1 1,283.2 1,159.7 Current revenues 13,771.5 14,037.9 14,030.6 3,319.1 3,715.6 3,410.8 3,485.9 3,367.4 3,766.5 3,184.6 3,293.1 3,510.9 1,230.7 1,101.4 Tax revenues 12,848.4 13,209.2 13,118.3 3,129.7 3,472.7 3,172.7 3,314.0 3,170.4 3,461.2 2,946.8 3,107.4 3,188.1 1,174.5 1,049.3 Taxes on income and profit 2,490.7 2,723.5 2,656.6 562.9 697.5 629.5 723.0 511.1 793.0 577.1 510.9 442.5 248.3 194.8 Social security contributions 5,234.5 5,267.6 5,244.1 1,303.8 1,346.2 1,342.5 1,332.8 1,306.4 1,262.4 1,264.9 1,283.4 1,261.3 441.3 449.0 Taxes on payroll and workforce 28.1 29.2 25.6 6.7 8.2 7.2 6.4 5.8 6.1 5.5 6.1 5.5 2.2 2.2 Taxes on property 219.7 215.2 233.9 84.2 53.1 26.6 64.8 79.4 63.1 24.2 67.8 91.3 10.5 27.4 Domestic taxes on goods and services 4,780.7 4,856.2 4,876.1 1,148.4 1,324.9 1,164.0 1,164.5 1,244.1 1,303.4 1,039.2 1,224.7 1,357.0 460.7 371.2 Taxes on international trade & transactions 90.7 100.2 82.5 23.8 25.1 22.3 21.9 17.9 20.5 19.4 22.9 18.2 8.8 6.6 Other taxes 4.0 17.2 -0.6 -0.2 17.6 -19.4 0.5 5.8 12.6 16.5 -8.4 12.4 2.7 -1.9 Non-tax revenues 923.0 828.7 912.3 189.5 242.9 238.1 171.9 197.0 305.3 237.8 185.7 322.8 56.2 52.1 Capital revenues 175.7 65.3 62.5 14.4 21.7 10.5 10.8 11.7 29.5 10.7 13.1 12.8 2.4 3.5 Grants 12.6 10.4 9.2 1.0 4.0 1.3 1.8 1.6 4.5 12.9 2.7 14.7 0.6 0.9 Transferred revenues 109.5 53.8 51.7 50.5 0.6 0.1 0.5 50.0 1.1 0.5 0.4 50.9 0.1 0.0 Receipts from the EU budget 724.7 814.9 845.1 153.3 274.6 195.6 213.2 146.6 289.7 211.2 185.6 143.8 49.4 53.9 GENERAL GOVERNMENT EXPENDITURES TOTAL EXPENDITURES 16,692.7 16,546.3 16,125.7 3,955.7 4,240.0 4,326.5 3,857.4 3,836.0 4,105.7 4,137.4 4,011.6 3,846.2 1,366.7 1,249.3 Current expenditures 6,960.4 6,926.7 6,813.5 1,645.5 1,640.3 1,995.1 1,668.7 1,553.2 1,596.6 1,842.9 1,819.0 1,496.7 628.1 515.4 Wages, salaries and other personnel expenditures 3,912.4 3,882.7 3,727.7 955.0 950.4 958.3 973.9 910.8 884.7 907.9 936.0 870.6 329.8 315.6 Expenditures on goods and services 2,512.4 2,443.4 2,373.0 603.4 638.9 589.7 599.1 551.1 633.1 559.7 566.5 527.4 216.0 192.1 Interest payments 488.2 526.7 647.9 78.0 29.3 431.8 81.5 79.4 55.3 319.1 295.2 77.8 77.3 2.6 Reserves 47.4 73.9 64.9 9.1 21.6 15.3 14.3 11.8 23.4 56.2 21.3 20.8 5.0 5.2 Current transfers 7,628.5 7,818.9 7,687.0 1,855.7 1,944.4 1,957.3 1,878.7 1,903.2 1,947.8 1,948.5 1,893.7 1,922.4 638.5 627.2 Subsidies 581.9 496.3 502.7 69.1 128.2 177.1 107.8 57.3 160.5 190.5 111.9 77.5 47.2 31.8 Current transfers to individuals and households 6,277.7 6,533.5 6,384.2 1,583.0 1,598.3 1,609.2 1,588.7 1,636.6 1,549.7 1,576.7 1,585.9 1,626.0 530.2 531.1 Current transfers to non-profit institutions, other current domestic transfers 728.8 737.2 741.0 189.0 203.2 158.0 169.6 196.7 216.8 158.1 185.2 185.7 56.3 59.0 Current transfers abroad 40.1 52.0 59.0 14.5 14.6 13.0 12.5 12.6 20.8 23.3 10.7 33.2 4.6 5.2 Capital expenditures 1,310.6 1,023.5 915.0 266.5 391.6 165.3 179.2 223.4 347.2 141.6 146.3 259.7 50.9 63.9 Capital transfers 396.4 372.1 319.9 97.0 159.4 47.0 44.3 74.3 154.3 42.5 52.0 69.3 14.3 10.2 Payments to the EU budget 396.8 405.1 390.3 91.0 104.4 161.8 86.5 82.0 59.9 161.8 100.5 98.0 34.9 32.5 SURPLUS / DEFICIT -1,898.7 -1,564.1 -1,126.6 - - - - - - - - - - - Source of data: Bulletin of Government Finance. Note: In line with the changed methodology of the International Monetary Fund of 2001, social security contributions paid by the general government are not consolidated. * Data on revenues for November 2012 include corrections in DURS records for the period January-October 2012, which were due to the rectification of technical errors in the new DURS information system. 2012 2013 6 1 7 1 8 1 9 1 10 1 11M 12 1 |2|3|4|5|6|7|8|9|10|11 1,269.3 1,188.8 1,234.9 1,153.5 1,300.4 1,304.0 1,486.9 1,183.0 1,143.6 1,093.2 1,187.0 1,133.7 1,174.3 1,290.1 1,204.9 1,238.2 1,275.2 1,201.0 1,153.8 1,120.0 1,189.9 1,057.5 1,256.4 1,228.5 1,281.6 1,130.5 1,072.7 981.5 1,107.7 1,060.8 1,124.5 1,225.5 1,159.5 1,125.9 1,210.9 1,144.3 1,090.3 1,059.0 1,107.5 1,003.9 1,188.8 1,161.5 1,111.0 1,076.5 955.1 915.2 1,046.5 997.0 1,063.9 1,061.0 1,063.1 1,064.0 1,142.4 1,067.1 279.9 91.6 210.5 209.0 215.7 311.1 266.3 199.9 194.1 183.1 70.9 163.5 276.6 62.6 188.7 191.2 187.8 190.0 442.5 432.2 446.0 428.2 430.0 360.0 472.3 424.7 418.9 421.4 432.4 426.3 424.7 423.0 419.4 418.9 420.1 427.8 2.0 2.2 1.7 1.9 2.0 1.6 2.5 1.9 1.8 1.8 2.1 2.0 2.0 2.2 1.6 1.6 1.9 2.0 26.9 26.3 26.4 26.6 20.0 30.5 12.7 6.1 9.0 9.0 17.3 30.4 20.1 32.1 29.3 29.8 19.9 35.7 332.7 496.8 414.2 333.2 512.5 444.9 346.1 438.3 319.3 281.6 521.1 375.5 328.1 527.3 408.0 421.6 512.7 408.8 6.5 5.9 5.6 6.3 7.6 7.5 5.4 5.3 6.3 7.9 8.3 7.6 7.0 6.6 6.3 5.3 5.8 6.1 -0.3 4.2 3.0 -1.4 1.0 5.9 5.7 0.3 5.7 10.5 -5.7 -8.2 5.5 7.2 9.7 -4.5 -5.8 -3.2 63.6 60.9 82.4 53.6 67.6 67.0 170.7 54.0 117.5 66.2 61.2 63.9 60.6 164.5 96.4 61.9 68.5 77.2 4.8 4.7 2.9 4.1 3.6 5.3 20.6 4.0 3.5 3.1 4.1 4.6 4.4 5.8 2.7 4.4 4.7 5.5 0.4 0.4 0.7 0.4 0.3 1.1 3.1 0.2 12.4 0.3 0.9 0.3 1.4 10.4 0.2 4.0 0.3 0.5 0.4 0.0 0.1 49.8 0.5 0.2 0.3 0.4 0.0 0.1 0.0 0.0 0.3 0.3 0.4 50.2 0.3 0.5 109.9 63.7 41.3 41.6 39.7 68.9 181.1 47.9 55.1 108.2 74.1 67.9 43.6 48.0 42.0 53.8 59.0 50.2 1,241.5 1,346.7 1,241.2 1,248.1 1,332.7 1,352.4 1,420.6 1,460.9 1,348.6 1,327.9 1,452.2 1,260.2 1,299.3 1,373.0 1,179.8 1,293.4 1,332.4 1,367.6 525.2 530.0 507.0 516.2 563.7 530.6 502.2 664.4 568.6 609.9 727.3 519.2 572.5 503.8 460.8 532.1 532.6 565.1 328.5 323.3 305.0 282.5 294.3 314.8 275.6 326.9 268.8 312.2 294.3 280.5 361.2 294.8 290.3 285.5 284.9 295.3 191.0 199.0 195.1 157.0 215.4 209.5 208.3 197.4 155.5 206.8 197.7 194.2 174.6 198.6 161.2 167.7 173.3 183.3 1.6 5.1 2.2 72.1 48.5 2.3 4.5 133.3 101.8 83.9 227.9 38.8 28.5 3.9 1.7 72.2 66.8 78.8 4.1 2.5 4.7 4.6 5.5 4.1 13.8 6.8 42.4 7.0 7.3 5.7 8.3 6.5 7.6 6.8 7.6 7.7 613.0 697.0 607.4 598.8 611.3 662.3 674.2 683.1 639.8 625.7 637.4 633.4 622.9 731.8 582.5 608.2 617.1 628.6 28.8 14.7 20.6 22.0 27.4 68.1 65.0 94.2 60.0 36.3 33.2 44.7 34.1 28.4 21.2 27.9 34.4 48.5 527.4 611.7 519.8 505.1 524.2 511.8 513.6 526.3 521.5 529.0 534.5 525.4 526.0 610.4 503.5 512.1 516.7 513.9 54.2 67.3 62.3 67.0 56.7 70.0 90.1 57.9 41.6 58.5 67.2 57.7 60.3 67.1 53.7 64.8 63.2 63.3 2.7 3.3 4.6 4.7 3.0 12.3 5.5 4.6 16.8 1.9 2.6 5.6 2.5 25.8 4.0 3.4 2.7 2.9 64.3 76.7 72.4 74.2 86.5 95.7 165.0 49.5 50.8 41.4 38.1 50.6 57.5 80.9 83.2 95.5 122.6 125.2 19.8 23.5 24.5 26.3 43.3 41.6 69.4 12.6 11.9 17.9 16.1 23.3 12.7 23.0 21.3 25.1 41.5 29.6 19.1 19.5 29.9 32.6 27.9 22.2 9.8 51.3 77.5 33.0 33.2 33.7 33.6 33.5 32.0 32.5 18.6 19.1 - - - - - - - - - Acronyms Acronyms in the text AJPES - Agency of the Republic of Slovenia for Public Legal Records and Related Services, BoJ - Bank of Japan, BS - Bank of Slovenia, CHF - Swiss Franc, DUTB - Bank Asset Management Company, ECB - European Central Bank, EFSF - European Financial Stability Facility, EFSM - European Financial Stability Mechanism, EIA - Energy Information Administration, EMU - European Monetary Union, ES - European Council, ESI - Economic Sentiment Indicator, ESM - European Stability Mechanism, ESS - Employment Service of Slovenia, ESSPROS - European System of Integrated Social Protection Statistics, Euribor - Euro Interbank Offered Rate, EUROSTAT - Statistical Office of the European Union, FED - Federal Reserve System, GBP - British pound, GDP - Gross domestic product, HICP-Harmonised Index of Consumer Prices, HUF -Hungarian Forint, ifo - Institut für Wirtschaftsforschung, IMAD - Institute of Macroeconomic Analysis and Development, IMF - International Monetary Fund, JPY - Japanese yen, LFS - Labour Force Survey, Libor - London Interbank Offered Rate, MF - Ministry of Finance, MZIP - Ministry of Infrastructure and Spatial Planning, NEER - Nominal Effective Exchange Rate, NFI - Non-monetary Financial Institutions, OECD - Organization for Economic Co-operation and Development, OI - core inflation, OP RČV - Operational Programme for Human Resource Development, OP ROPI - Operational Programme of Environmental and Transport Infrastructure Development, OP RR - Operational Programme for Strengthening Regional Development Potentials, PDII - Pension and Disability Insurance Institute, PISA - Programme for International Student Assessment, PMI - Purchasing Managers Index, PRS - the Slovenian Business Register, REER - Real Effective Exchange Rate, RS - Republic of Slovenia, RULC - Relative Unit Labor Cost, SCA - Standard Classification of Activities, SRE - Statistical Register of Employment, SURS - Statistical Office of the Republic of Slovenia, ULC - Unit Labour Costs, USD - US Dollar, ZEW - Centre for European Economic Research, ZUJF - Fiscal Balance Act, ZZZS - The Health Insurance Institute of Slovenia. Acronyms of Standard Classification of Activities (SCA) A - Agriculture, forestry and fishing, B - Mining and quarrying, C - Manufacturing, 10 - Manufacture of food products, 11 - Manufacture of beverages, 12 - Manufacture of tobacco products, 13 - Manufacture of textiles, 14 - Manufacture of wearing apparel, 15 - Manufacture of leather and related products, 16 - Manufacture of wood and of products of wood and cork, except furniture, manufacture of articles of straw and plaiting materials, 17 - Manufacture of paper and paper products, 18 - Printing and reproduction of recorded media, 19- Manufacture of coke and refinedpetroleum products, 20 -Manufacture of chemicals and chemical products, 21 - Manufacture of basic pharmaceutical products and pharmaceutical preparations, 22 - Manufacture of rubber and plastic products, 23 - Manufacture of other non-metallic mineral products, 24 - Manufacture of basic metals, 25 - Manufacture of fabricated metal products, except machinery and equipment, 26 - Manufacture of computer, electronic and optical products, 27 - Manufacture of electrical equipment, 28 - Manufacture of machinery and equipment n.e.c., 29 - Manufactureof motorvehicles,trailersand semi-trailers, 30 - Manufactureof othertransportequipment, 31 - Manufacture of furniture, 32 - Other manufacturing, 33 - Repair and installation of machinery and equipment, D-Electricity,gas,steamandairconditioningsupply,E-Watersupplysewerage,wastemanagementandremediationactivities, F - Construction, G - Wholesale and retail trade, repair of motor vehicles and motorcycles, H - Transportation and storage, I - Accommodation and food service activities, J - Information and communication, K - Financial and insurance activities, L -Real estate activities, M - Professional, scientific and technical activities, N - Administrative and support service activities, O -Public administration and defence, compulsory social security, P - Education, Q - Human health and social work activities, R - Arts, entertainment and recreation, S - Other service activities, T - Activities of households as employers, undifferentiated goods- and services- producing activities of households for own use, U - Activities of extraterritorial organizations and bodies. Acronyms of Countries AT-Austria, BA-Bosnia and Herzegovina, BE-Belgium, BG-Bulgaria, BY-Belarus, CH-Switzerland, HR-Croatia, CZ-Czech Republic, CY-Cyprus, DE-Germany, DK-Denmark, ES-Spain, EE-Estonia, GR-Greece, FR-France, FI-Finland, HU-Hungary, IE-Ireland, IL-Israel, IT-Italy, JP-Japan, LU-Luxembourg, LT-Lithuania, LV-Latvia, MT-Malta, NL-Netherlands, NO-Norway, PL-Poland, PT-Portugal, RO-Romania, RS-Republic of Serbia, RU-Russia, SE-Sweden, SI-Slovenia, SK-Slovakia, TR-Turkey, UA-Ukraine, UK-United Kingdom, US-United States of America. Slovenian economic mirror January 2014, No. 1, Vol. XX