OECD Economic Surveys: Slovenia

Frequency :
Irregular
ISSN :
1999-0642 (online)
ISSN :
1995-3585 (print)
DOI :
10.1787/19990642
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OECD’s periodic surveys of the Slovenian economy. Each edition surveys the major challenges faced by the country, evaluates the short-term outlook, and makes specific policy recommendations. Special chapters take a more detailed look at specific challenges. Extensive statistical information is included in charts and graphs.

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OECD Economic Surveys: Slovenia 2015

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Author(s):
OECD
04 May 2015
Pages :
133
ISBN :
9789264232235 (PDF) ; 9789264232228 (print)
DOI :
10.1787/eco_surveys-svn-2015-en

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This OECD Economic Survey of Slovenia examines recent economic developments, policies and prospects. Special chapters cover raising competitiveness and sustainable growth and the economic consequences of ageing.

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  • Basic statistics of Slovenia, 2013

    This Survey is published on the responsibility of the Economic and Development Review Committee of the OECD, which is charged with the examination of the economic situation of member countries.The economic situation and policies of Slovenia were reviewed by the Committee on the 1st April 2015. The draft report was then revised in the light of the discussions and given final approval as the agreed report of the whole Committee on the 15th April 2015.The Secretariat’s draft report was prepared for the Committee by Urban Sila, Natasa Jemec and Peter Walkenhorst, under the supervision of Piritta Sorsa. Statistical research assistance was provided by Hermes Morgavi with general administrative assistance provided by Anthony Bolton and Mikel Inarritu. The authors would like to thank Alvaro Pereira, Robert Ford and Jeanne Dall’Orso for their contributions at different stages.The previous Survey of Slovenia was issued in April 2013.

  • Acronyms
  • Executive summary
  • Assessment and recommendations
  • Progress in structural reform

    The objective of this Annex is to review action taken since the previous Survey (April 2013) on the main recommendations from previous Surveys. The recommendations that are new to this Survey are contained in the corresponding chapters.

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  • Expand / Collapse Hide / Show all Abstracts Thematic chapters

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    • Raising competitiveness and long-term growth of the Slovenian economy

      The rapid growth after independence stopped in 2008, as the global crisis exposed important structural weaknesses. Large state involvement and rigid labour and product markets lowered productivity. Weak corporate governance and easy credit before the crisis led to high indebtedness and overinvestment. Slovenia was slow to deal with the underlying structural problems. Gradually, important reforms have been implemented which raised credibility of Slovenia in the financial markets and boosted confidence. But economic recovery has been sluggish, many people are unemployed and living standards still remain below the pre-crisis levels. Cost competitiveness and export market performance deteriorated, and there have been marked improvements only recently. Better corporate governance and management practices in the state owned sector and privatisations can attract FDI and raise efficiency. Low innovative activity could be boosted by more FDI, stronger framework for entrepreneurial activity and better start-up support. Relatively high minimum wage is potentially reducing employment opportunities of low-skilled workers. Limiting the minimum wage growth, and lowering the high tax wedge on labour income could boost employment. Efficiency should be raised in early and tertiary education to enhance skills. Despite generous public support, overall students’ performance could be improved and there are marked differences between students from different socioeconomic backgrounds.

    • The economic consequences of an ageing population in Slovenia

      Slovenia’s population is set to age rapidly in the coming decades. This demographic trend will increasingly put pressure on already fragile public finances as age related expenditure is projected to rise by 3 percentage points of GDP by the year 2030. Ensuring debt sustainability and generational equity requires reforms of social support systems and necessitates adjustments in labour markets. Policy makers will thus need to act more strongly than in the past to rein in ageing-related outlays, pursue efficiency-enhancing restructurings of health and long-term care systems, and adopt measures to strengthen labour force participation. In particular, further increases in the relatively low pension age in line with the rise in life expectancy would reduce pension costs and the burden on the active population. Better utilisation of medical resources and co-ordinated purchasing of medical supplies would curb health care expenditure, while a dedicated funding mechanism for long-term care would enhance the sustainability of the system. Moreover, removing incentives for early retirement in combination with active labour market policies would increase the labour force participation rates of older workers from its currently very low levels.

    • Restoring the financial sector and corporate deleveraging

      Excessive credit growth, poor risk assessment and lax lending standards in the run up to the 2008 global crisis led to unsustainable debt build-up in banks and related corporates. A weak framework for the governance of largely state-owned banks is likely to have contributed to the misallocation of credit. Furthermore, there were weaknesses in the banks’ risk management systems and banks often didn’t properly adhere to regulations and guidance given by the supervisor. Following the results of the stress tests and the Asset Quality Review, in December 2013, the major state-owned banks were recapitalised at a cost of around 11% of GDP, and part of their non-performing loans (NPLs) transferred to the Bank Asset Management Company (BAMC). Banks nevertheless remain weak, with still high NPLs, and corporations are highly leveraged. For successful restructuring and liquidation of assets, BAMC needs to act independently, transparently, with corporate governance of highest standards. Privatisation can improve corporate governance and closer supervision can ensure better compliance by banks. Insolvency legislation was thoroughly reformed in 2013 and should be implemented effectively to help return the healthy parts of the economy to invest and grow again.

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