[prezentacija] iskustvo slovenije u vremenu ekonomske krize, izazovi i mjere oporavka

SLOVENIA IN A TIME OF ECONOMIC CRISIS, CHALLENGES AND ACTIONS TAKEN

B O Š TJ A N VA S L E , I M A D

Z A G R E B , 1 1 . D E C E M B E R 2 0 1 4

One of the biggest declines at the beginning of crisis: in terms of output...

Source: Eurostat, IMAD, EC.

... and in terms of employment

Source : Eurostat, IMAD, EC.

Slovenia being a small and open economy, exports are key to the economic development

Source : SURS.

A huge drop in investment as the crisis coincided with the conclusion of large infrastructure projects

Source: SURS.

All this together resulted in a substantial public finance deficit

Source: Ministry of finance, IMAD estimates.

Large dependence of the corporate sector on bank credit

Source: Bank of Slovenia.

Inappropriate wage policy at the beginning of the crisis

Source: SURS.

Continued increase in employment in the public sector despite public finance restrictions

Source: SURS.

The result: loss of competitiveness

Source: Eurostat, IMAD.

Problems culminated in a substantial increase in public debt...

Source: SURS, forecast Ministry of finance.

... and interest payments narrow public finance maneuvering space

Source: SURS, forecast Ministry of finance.

At the same time, increase in government financing costs

Source: Bloomberg.

Problems reflected in a huge increase of non-performing loans in the banking sector

Source: Bank of Slovenia.

Crisis culminated in EU procedures

7 country specific recommendations: - decreasing public finance deficit and improvement of budgetary strategy - sustainability of the pension system - social agreement - privatisation - SDH strategy - corporate restructuring plan - improvent of business environment - anti-corruption measures

Publicly financed capitalization of banks

Source: IMF. *data for Q2 2014, **data for Q4 2013, ***data for 2013, ****data for Q2 2012, *****data for Q3 2013 before capitalizati on.

Attempts of structural reforms – pension system reform

Source: Country fiche, april 2013.

Attempts of structural reforms – labour market reform

Source:OECD.

Attempts of structural reforms – consolidation effort

Source: Ministry of finance, IMAD estimates.

Turnaround in economic activity ...

Source: SURS.

... and employment

Source: SURS.

The need for systemic public finance consolidation remains

Source: Ministry of finance.