Slovenian Economic Mirror J IMAD Economic Analyses/October 2007 No. 10, Vol. XIII Slovenian Economic Mirror presents current macroeconomic developments as well as selected economic, social and environmental issues. The publication consists of articles, which present the main economic indicators, assess the realisation of the spring and autumn forecasts, and monitor implementation of economic policies (earnings, public finance, prices, competitiveness, etc.). The periodical is published monthly, except in September. This issue of Slovenian Economic Mirror was prepared by: Lejla Fajić (In the Spotlight), Jure Brložnik (International Environment), Miha Trošt (Price Trends & Policy), Marjan Hafner (Money Market - Household Savings, Money Market - Loans, Stock Exchange), Jasna Kondža (General Government Revenue), Tomaž Kraigher (Labour Market), Saša Kovačič (Earnings), Katarina Ivas (Manufacturing), Jure Povšnar (Transport), Mateja Kovač (Forestry), Alenka Kajzer (Job Vacancy Rate), Janja Pečar (Jobs and Employment by Region), Ana Vidrih (Technology Intensity - Companies in the Manufacturing Sector), Andreja Poje (Public Finance Flows between Slovenia and the EU). Acting Director: Boštjan Vasle. Editor in Chief: Luka Žakelj. Translator: Tina Potrato. Language Editing: Translation and Interpretation Division of the Secretariat-General of the Government of the RS. Technical Editor: Ema Bertina Kopitar. Statistical Appendix, Data Preparation & Graphs: Bibijana Cirman Naglič, Marjeta Žigman. Distribution: Katja Ferfolja. Printed by: Tiskarna Štrok. Concept & Design: Sandi Radovan, Studio DVA. Circulation: 610 copies. Institute of Macroeconomic Analysis and Development Gregorčičeva 27, 1000 Ljubljana (+386 1) 478 10 12 fax: 478 10 70 Editor in chief: luka.zakeli@gov.si Translator: tina.potrato@gov.si Distribution: publicistika.umar@gov.si SEM can be found on the Internet at http://www.gov.si/aindex/. Publication is included in Ebsco Publishing Database and Internet Securities Database. © Institute of Macroeconomic Analysis and Development, 2007. The contents of this publication may be reproduced in whole or in part provided that the source is acknowledged. Contents Slovenian Economic Mirror IMAD No. 10/2007 p. 2 In the Spotlight Favourable trends in production, exports, and unemployment continued in the summer months; inflation rose further in October p. 3 International Environment IMF lowered GDP growth forecasts particularly due to the financial crisis in the USA p. 4 Price Trends & Policy Food price rises remain the main factor of accelerated inflation p. 5 Money Market -Household Savings The growth of net wages and the rising deposit interest rates boosted household savings in banks p. 6 Money Market - Loans Household borrowing rose somewhat due to seasonal factors p. 7 Stock Exchange A high year-on-year increase in shares trading in the third quarter p. 8 General Government Revenue The moderate real growth of general government revenue indicates a lower tax burden for households and the corporate sector p. 9 Labour Market Most indicators of labour market trends remain more favourable than in 2006 p. 10 Earnings The wage rise in the private sector mainly linked to the August adjustment p. 11 Manufacturing Car industry contributed one third to August's increase in production p. 12 Transport Slovenian carriers perform a high volume of per capita road freight transport p. 13 SELECTED TOPICS Forestry Removal intensity increased again last year but sanitation comprised already one third of the total removal p. 17 Job Vacancy Rate The job vacancy rate in Slovenia has increased somewhat in 2007, yet it remains below the EU average p. 18 Jobs and Employment by Region The concentration of jobs in the Osrednjeslovenska region causes increased daily migration of labour from neighbouring regions p. 19 Technology Intensity -Companies in the Manufacturing Sector Within manufacturing's value added, particularly the share of medium-low-technology industries is increasing pp. 20, 21 Public Finance Flows between Slovenia and the EU Slovenia remained a net recipient of funds from the EU budget in 2006 pp. 22, 23 Data: (pp. A 1-A 12), Main indicators (p. A 13), International Comparisons (pp. A 14-15), Graphs (pp. A 16-17). Compared to the Selected indicators of current economic Latest previous month same period of previous year developments, change in % Data latest data pre-latest data pre-pre latest data Industrial production (value based) VIII -12.6 8.8 8.6 8.4 Manufacturing VIII -14.2 10.1 10.0 9.8 Electricity, gas and water supply VIII -3.4 -9.6 -10.5 -11.3 Value of construction put in place, real terms VIII 4.7 30.4 30.2 33.1 Exports of goods (nominal terms)1 VIII -15.1 18.8 18.0 17.8 Imports of goods (nominal terms)1 VIII -13.1 20.0 19.8 20.1 Real effective exchange rate2 VIII 0.1 1.8 1.7 1.6 Gross wage per employee, real terms VIII 1.3 2.7 2.8 2.7 Total household savings in banks3, nominal terms VIII 0.2 11.4 11.0 9.8 General government revenue, real terms IX -9.4 3.6 3.1 2.2 Number of persons in paid employment VIII 0.0 3.5 3.4 3.4 Number of registered unemployed IX -2.7 -17.9 -18.0 -18.1 Number of job vacancies IX 15.6 5.7 6.5 4.8 Month current previous pre-previous Registered unemployment rate VIII 7.4 7.6 7.5 Month current cumulative annual4 Consumer prices X 0.7 4.2 5.1 Producer prices (domestic market) IX 1.1 5.1 5.8 Sources of data: SORS, BS, ESS, estimates and calculations by IMAD. Notes: 1balance of payments' statistics; 2euro's exchange rate for Slovenia measured by relative consumer prices; the calculation of the effective exchange rate includes the currencies/prices of Slovenia's 17 trading partners (Austria, Belgium, Germany, Italy, France, Netherlands, Spain, Denmark, United Kingdom, Sweden, Czech Republic, Hungary, Poland, Slovakia, USA, Switzerland, Japan); weights are the shares of individual trading partners in Slovenian exports and imports of goods within manufacturing (5-8 SITC) in 2001-2003; exports are double weighted; 3the year-on-year growth rate is defined as the ratio between the stock at the end of the current month and the stock in the same month of the previous year; 4total in the last 12 months. In the Spotlight Slovenian Economic Mirror IMAD No. 10/2007 p. 3 According to the IMF's October forecasts, global economic growth is gradually moderating. Last year the global economy reached its highest economic growth in the period 1999-2008 (5.4%). In 2007 and 2008 it will gradually moderate to a respective 5.2% and 4.8%. The main factors of this year's slowdown appear to be the softening of private consumption growth and the drop in investment activity in the United States, which was triggered by the turbulence in the housing market, whereas growth in other economic regions has remained strong. According to the IMF, such trends will affect euro area countries mainly through tighter financing conditions and credit availability, which will translate into a slowdown in investment growth in the following year, while the growth of private consumption, supported by the favourable developments in the labour market, should turn into the main engine of economic growth (unlike in the United States) and is projected to total 2.5% in 2007 and 2.1% in 2008. These forecasts are broadly consistent with the export demand assumptions used in the Autumn Forecast (p. 4). The growth of domestic manufacturing's industrial production and exports remained at a high level in August. Due to the usual seasonal trends in August, when many companies close for a collective holiday, production and exports in that month were lower than in July, but their year-on-year growth rates did not ease off. Compared with August 2006, manufacturing's production activity rose by a real 10.6%, while exports increased by a nominal 25.5%, exceeding the rise in imports in this period (20.8%). Despite the projected gradual slowdown in the international environment, such trends were expected in view of the gradual expansion of the production and exports of transport equipment, which was almost 90% higher in August 2007 than a year ago and contributed approximately one third to the overall increase in production (see p. 12). Thus, the easing in the global economy will not significantly affect the total growth of Slovenian exports until 2008. As in production and exports, the holiday season is likewise reflected in employment trends. The total number of persons in formal employment remained unchanged in August, while the increase in the eight months to August (3.5%) was even slightly higher than at mid-year (3.4%). The construction sector (up by 0.9% over July; in the eight months 11%, y-o-y) again stands out among the activities in which the number of employees rose also in August. The number of unemployed continued to decline (66,658 in September). However, the decrease in September was largely due to deletions from unemployment register for reasons other than employment, although in the entire nine-month period these were much lower than last year (p. 10). Amid such trends, Slovenia has been experiencing excess demand in the labour market (labour shortages), especially in the construction sector. However, the available data show that these developments still have not resulted in higher wage increases. One criterion of the disparity in labour market demand and supply is the job vacancy rate, which has been rising in Slovenia since Q2 of 2005, when economic growth accelerated. Excess demand for labour is particularly strong in the construction sector, in hotels and restaurants, and in real estate, renting, and business services. Although the rising job vacancy rate in these activities, coupled with the concurrent decline in unemployment points to imbalances in the labour market, data on wage increases do not suggest acceleration in these activities. In the eight months to August, the average nominal gross wage growth rose by 6.9% in the construction sector, by 5.1% in hotels and restaurants, and by 6.3% in business services, showing no major divergence from the average wage increase in the private sector (6.5%; see p. 11). Domestic employers are partly compensating for labour shortages by increased overtime work (23.5% of workers in construction work overtime; the average for the economy is 18.1%) and by hiring foreign workers, whose number in this activity was 45% higher in June 2007 than in June 2005 (p. 18). This year's wage increases have been underpinned by favourable business results. Due to the lower tax burden, net wages rose by around two percentage points more than gross wages. In the first eight months of the year, gross earnings in the private sector were 6.5% higher than in the same period of 2006 (last year the comparable increase was 5.5%), reflecting the strong business performance of firms in 2006 and 2007. Meanwhile earnings in the public sector increased by 4.2% (last year the comparable increase was 3.4%). The amendments to personal income tax legislation enforced in January, which raised the general tax relief (for all taxpayers) by 11% and reduced taxation particularly in higher income brackets, also underpinned the faster nominal growth of net wages (7.9%) relative to gross wages (5.7%). We estimate that, given the interest rate increases, a proportion of additional funds arising from the higher net wage increase (by 3.0 p.p. over 2006) was partly transferred to savings, since the net flows of household deposits in banks recorded in the eight months to August exceeded last year's levels 2.3-fold (p. 6). In the otherwise favourable macroeconomic environment, the growth of general government revenue has lagged behind GDP growth due to the structure of the latter and the lower tax burden for households and companies. In the first nine months of 2007, general government revenue rose by a total of 3.6% in real terms. Within that, the revenue from personal income tax declined in real terms due to the enforcement of the new personal income tax legislation, while the revenue from payroll tax was also lower in real terms as a result of the further cuts in this tax. On the other hand, the revenue from excise duties, especially on cigarettes and mineral oils, increased more than the total revenue, as did the revenue from social security contributions. Due to the structure of economic growth, which is largely based on exports and investment, the increase in the revenue from VAT in the eight months to August was lower than the average increase in revenue. Revenue from VAT is largely determined by the growth of household and government consumption, which has lagged behind GDP growth this year (p. 9). Amid the continued rapid rises in food prices and record-high oil prices, inflation has continued to increase. In the ten months to October, prices rose by 4.2%, 2.2 p.p. more than in the same period last year. As in previous months, the difference is largely attributable to food prices, which surged by 2.5% in October alone (last year by 3.6% in the entire year) and to the record-high oil prices. The high monthly price rise (0.7%), coupled by the low base effect of the price decrease in October 2006 (-0.8%), pushed annual inflation up to a soaring 5.1%, up from September's 3.5%. The outcome of wage negotiations between employers and employees will be critical to curbing inflation and tempering inflationary expectations in the months ahead. The Government should retain a restrictive stance in administered prices and use fiscal policy to ease inflationary pressures. International Environment Slovenian Economic Mirror IMAD No. 10/2007 p. 4 Comparison of different forecasts and assumptions - real GDP growth 2007 Real growth (%) 2006 IMAD Mar. 07 IMF Apr. 07 IMF July 07 IMAD Sep. 07 CONS Oct. 07 IMF Oct. 07 IMAD Mar. 07 IMF Apr. 07 IMF Jul. 07 IMAD Sep. 07 CONS Oct. 07 IMF Oct. 07 EMU 2.8 2.4 2.3 2.6 2.6 2.6 2.5 2.2 2.3 2.5 2.3 2.0 2.1 Germany 2.9 1.9 1.8 2.6 2.6 2.6 2.4 2.0 1.9 2.4 2.3 2.2 2.0 Italy 1.9 1.8 1.8 1.8 1.9 1.8 1.7 1.5 1.7 1.7 1.5 1.4 1.3 Austria 3.3 2.5 2.8 N/A 3.1 3.3 3.3 2.3 2.4 N/A 2.4 2.5 2.5 France 2.0 2.0 2.0 2.2 1.9 1.8 1.9 2.0 2.4 2.3 2.0 1.9 2.0 USA 2.9 2.4 2.2 2.0 1.8 2.0 1.9 3.0 2.8 2.8 2.3 2.4 1.9 2008 Sources of data: Eurostat; Consensus Forecasts (October 2007); IMF World Economic Outlook (April 2007, October 2007); IMF World Economic Outlook Update (July 2007); IMAD Spring Forecast 2007, Autumn Forecast 2007. The IMF October outlook for this year's global economic growth remains unchanged from July (5.2%), while the forecast for 2008 is 0.4 p.p. lower (4.8%). The largest downward revision was made to the forecast for the United States due to the situation in its housing market, which presents the main risk to the outlook. On the other hand, China and India will make the largest contribution to global growth for the first time (in terms of purchasing power parity). Compared with the IMAD's autumn assumptions, the IMF forecasts for Slovenia's main trading partners within the euro area are slightly lower for Germany and Italy, higher for Austria, and the same for France (see table). Particularly for 2008, the IMF also marked down the economic outlook for the EMU, where growth will be largely underpinned by private consumption. Lower foreign demand and the strong euro will dampen exports, while the tightening of credit conditions will cause investment growth to ease off. Private consumption will gather momentum next year to become the main engine of economic growth, which was expected given the substantial improvement in labour market conditions. Employment growth increased in the first quarter of 2006, averaging a 1.6% year-on-year level in the following six quarters. In August the unemployment rate totalled 6.9% for the third month in a row, the lowest rate since 1993. The beginning of 2007 also saw acceleration in the growth of disposable income, which sped up from 3.3% in Q4 of 2006 to 4.5% in Q1 of 2007. The consumer sentiment measured by the EC has deteriorated over recent months, but it nevertheless remains at a level above the long-term average. The financial crisis in the United States and the consequent deterioration in credit conditions pose the main downside risks to GDP growth in the euro area. According to the EC (Quarterly report on the euro area, October 2007), the deterioration in credit conditions will dampen economic growth in the euro area, albeit to a limited extent since economic fundamentals appear to remain sound: banks have made large profits over recent years, which gives them some leeway in deteriorated credit conditions; due to the low wage increases in previous years, the profits of non-financial institutions were also high. On the other hand, the effect of the financial turmoil will not be completely clear at least until the release of data on the performance of European banks. Furthermore, the turbulences in the American housing market could spill over to some European countries, where housing prices have risen at a much faster pace than in the United States in recent years. The record-high prices of oil and other commodities could push up the inflation rate, which exceeded 2.0% in September for the first time since August 2006. The U.S. economy will not recover until 2009 (see graph), since the downturn in the housing market is expected to persist at least until the end of 2008. All recent data regarding the situation in the housing market indicate that the correction of prices and housing investment will last for another while. September witnessed the lowest levels of issued building permits since 1995, while housing starts were at the lowest level since 1993. Consequently, the climate in the construction sector plunged to a historical low since it began to be measured in 1985. Although the number of foreclosures decreased by 8.0% in September over August, it was still 99.0% higher than in 2006. A critical question is how the drop in housing prices that started at the beginning of 2007 will affect the growth of private consumption, which slackened to 1.4% in the second quarter (from 3.7% in Q1; annualised q-o-q growth). Graph: Year-on-year quarterly GDP growth, % 4.0 3.5 3.0 2.5 2.0 1.5 1.0 0.5 0.0 * ■* - « + - * --TL» ^ . ^ i --- - - » » _ ......... ^ m " • # * - - _ ■ Germany □- US Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2005 2006 2007 2008 2009 Source of data: Eurostat; Consensus Forecasts, September 2007. Note: forecasts from Q3 2007 onwards. Price Trends & Policy Slovenian Economic Mirror IMAD No. 10/2007 p. 5 2006 2007 Price indices XII 2006/ O (I 06-XII 06)/ IX 2007/ IX 2007/ O (X 06-IX 07)/ XII 2005 O (I 05-XII 05) VIII 2007 IX 2006 O (X 05-IX 06) Consumer prices (CPI) 102.8 102.5 100.4 103.5 102.8 Goods 102.1 102.0 101.2 102.9 102.1 Fuel and energy 103.9 108.2 99.1 99.6 101.6 Other 101.7 100.5 101.7 103.6 102.2 Services 104.3 103.4 98.7 104.7 104.3 Consumer prices (HICP) 103.0 102.5 100.4 103.6 103.0 Administered prices1 102.1 105.8 98.5 100.1 101.3 Energy 103.7 108.0 99.1 99.1 101.2 Other 97.9 100.2 97.2 102.5 101.5 Core inflation: - trimmean 102.7 102.8 100.3 102.5 102.2 - excluding food & energy 102.0 101.2 100.5 103.1 102.0 Producer prices: - domestic market 102.8 102.3 101.1 105.8 104.4 - EMU 106.3 102.6 99.7 103.8 106.2 Consumer prices in the EMU 101.9 102.2 100.4 102.1 101.9 Sources of data: CPI, HICP, IPI: SORS; administered prices and core inflation: IMAD estimate; MUICP in the EU: Eurostat (provisional data) and IMAD recalculation. Note: figures are not directly comparable between years due to the annual changes of the administered prices index. Inflationary pressures are showing in long-term inflation indicators. After average inflation totalled 2.7% in August, it rose as expected in September to total 2.8%. In comparison with August, prices rose by 0.4% in September (the same as in September 2006), while the total price increase this year was 3.6%. Year-on-year inflation remained unchanged from August, at 3.5%. The acceleration in inflation has been largely propelled by food price increases and is estimated to be transitory. Price trends in other groups of the price index have been similar as in 2006. Some of the predicted food price increases materialised in September. Food prices increased by 9% in the first nine months of the year and contributed around 1.4 p.p. to the 3.6% overall inflation recorded in this period. According to the available data, particularly the prices of bread and other grain products surged in September (11.6%), contributing 0.4 p.p. to monthly inflation. The prices of meat, fish, milk products, and eggs also rose by more than one percent. Thus, food prices remain the main determinant of the high domestic inflation. The September price developments were also affected by seasonal impacts, which, however, did not diverge from usual trends. The higher prices of clothing and footwear added 0.7 p.p. to the monthly price increase, while the lower prices of package holidays reduced inflation by 0.4 p.p. Both price groups are typically prone to strong seasonal swings (see graph). Inflation in September was lowered by two one-off factors. First, the Government reduced the excise duties on liquid fuels to the minimum level still allowed by EU regulations, which lowered inflation by approximately 0.2 p.p. Second, the prices of municipal services in Ljubljana, as measured statistically by the SORS, returned to July's level, which further reduced inflation by slightly more than 0.1 p.p. Price rises in the EMU also accelerated in September. After euro area's year-on-year inflation totalled 1.7% in August, it rose to 2.1% in September, exceeding the medium-term objective of the ECB, which is defined as a value below but close to 2%. In comparison with August, prices in the euro area increased by 0.4%. Graph: Quarterly indices of the prices of clothing and footwear, and package holidays 130 125 120 115 110 105 100 95 90 85 80 Q1 Q2 Q3 Q4 Q1 Q2 2001 2002 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2003 2004 2005 Source of data: Eurostat; Consensus Forecasts, September 2007. Note: forecasts from Q3 2007 onwards. Q3 Q4 Q1 Q2 Q3 2006 Q4 Q1 Q2 2007 Money Market - Household Savings Slovenian Economic Mirror IMAD No. 10/2007 p. 6 Household savings in banks and mutual funds managed by domestic administrators EUR m, nominal Nominal growth rates, % 31. XII 2006* 31. VIII 2007 31. VIII 2007/ 31. VII 2007 31. VIII 2007/ 31. XII 2006* 31. VIII 2007/ 31. VIII 2006* Total savings 11,451.3 12,200.0 0.2 6.5 11.4 Domestic currency savings 7,181.3 11,781.4 0.2 N/A N/A Overnight deposits1 3,730.9 5,406.9 -1.3 N/A N/A Short-term deposits 2,558.1 4,514.7 0.6 N/A N/A Long-term deposits 677.2 1,227.0 2.1 N/A N/A Deposits redeemable at notice 215.0 632.8 6.6 N/A N/A Foreign currency savings 4,270.0 418.6 0.0 N/A N/A Overnight deposits1 1,794.3 174.5 0.6 N/A N/A Short-term deposits 1,877.1 179.8 -1.7 N/A N/A Long-term deposits 474.4 45.2 -0.7 N/A N/A Deposits redeemable at notice 124.2 19.1 13.8 N/A N/A Mutual funds2 1,967.3 2,692.1 4.9 36.8 75.7 to domestic currency loans, data from previous years are not comparable with data for 2007, and calculations of growth rates are therefore meaningless. Although the monthly growth of household deposits in banks slowed down considerably in August in comparison with the previous months, it was positive for the twelfth consecutive month. Time deposits are still recording fairly high growth rates. In August they rose by 1.4%, which equalled the monthly average for the first eight months of the year (0.3% in 2006). Meanwhile, overnight deposits declined by 1.2%, experiencing the sharpest drop since January. This decline appears to be related to the somewhat stronger holiday spending. Deposits redeemable at notice registered the highest monthly growth rates among household deposits for the eighth consecutive month. At the monthly level they increased by 6.8%, falling 1.7 p.p. short of their monthly average this year. On the other hand, long-term deposits increased by 2.0% and exceeded their monthly average from the first eight months by more than half. Household savings in banks have continued to strengthen. In the eight months to August, they rose by 6.5%, 3.5 p.p. more than in the comparable period of 2006. Over 40% of this increase was due to the growth of deposits redeemable at notice, which account for just 5% of all household deposits, but they almost doubled over the first eight months of the year. Short-term deposits, which rose by 5.8% in this period, also made a significant contribution. On the other hand, the contribution of overnight deposits, which account for more than 45% of all household deposits, contracted significantly. The total net flows in the first eight months of the year amounted to EUR 748.7 bn, 2.3 times more than in the comparable period of 2006. The higher growth rates may reflect the stronger growth of net wages and the progressive raising of deposit interest rates. The higher net wage increases are characteristic of groups with a higher propensity to save and are the result of the lower progressivity in the new tax legislation. The raising of interest rates was initially the consequence of the ECB's key interest rate increases (the last one was carried out in June). Subsequently, the tightening of conditions in interbank markets resulting from the financial crisis may have been an additional reason for the raising of domestic deposit interest rates. Thus, banks began to turn back to savers in order to finance their strong lending activity. The growth rates of long-term savings have begun to increase at a somewhat stronger pace in the second half of the year, which is positive in view of the maturity structure of the banking sector's balance sheets. Graph: Dynamics of interest rates on household time deposits in banks 5.0 4.5 4.0 3.5 3.0 2.5 2.0 2 □ Source of data: BS. Time deposits up to 1 y ear Time deposits over 1 and up to 2 y ears Time deposits over 2 y ears Deposits redeemable at notice announced up to 3 months in advance Deposits redeemable at notice announced over 3 months in advance Source of data: Monthly Bulletin of the BS, calculations by IMAD. Notes: 1demand deposits; 2data for June 2007; *due to the transfer of euro loans Money Market - Loans Slovenian Economic Mirror IMAD No. 10/2007 p. 7 Domestic bank loans Nominal amounts, EUR m Nominal loan growth, % 31. XII 2006* 31. VIII 2007 31. VIII 2007/ 31. VII 2007 31. VIII 2007/ 31. XII 2006* 31. VIII 2007/ 31. VIII 2006* Loans total 20,193.3 24,651.4 2.6 22.1 32.1 Domestic currency loans 7,457.5 23,070.9 2.4 N/A N/A Enterprises and NFI 4,066.8 17,070.7 2.8 N/A N/A Households 2,896.4 5,484.0 2.2 N/A N/A Government 494.3 516.1 -7.2 N/A N/A Foreign currency loans 12,735.8 1,580.6 4.8 N/A N/A Enterprises and NFI 10,091.3 725.6 3.8 N/A N/A Households 2,484.3 839.1 5.8 N/A N/A Government 160.1 15.9 -2.4 N/A N/A Household loans by purpose 5,380.7 6,323.1 2.7 17.5 25.9 Consumer credits 2,286.6 2,587.9 2.2 13.2 18.4 Lending for house purchase 1,955.8 2,428.5 2.9 24.2 38.8 Other lending 1,138.3 1,306.7 3.4 14.8 20.2 Source of data: BS Bulletin, calculations by IMAD. Notes: NFI - non-monetary financial institutions; *due to the transfer of euro loans to domestic currency loans, data from previous years are not comparable with data for 2007, and calculations of growth rates are therefore meaningless. In August the monthly increase in domestic bank loans to domestic non-banking sectors was at the lowest level since March 2007. Nevertheless, their growth remained relatively strong. The decline in growth primarily reflects somewhat lower borrowing by enterprises and NFI, while household borrowing even recorded a slight increase. Despite the smaller overall monthly increase, year-on-year growth increased for the fifth consecutive month in August. In the eight months to August, banks' net lending to domestic non-banking sectors totalled EUR 4,458.2 m, almost three quarters more than in the comparable period of 2006. The year-on-year growth rate of loans also strengthened in other EMU countries (albeit at much lower levels), totalling 10.8% on average in August. The volume of loans to enterprises and NFI increased by 2.9% at the monthly level. This was the lowest rise in five months, which is attributable to the weaker growth of working capital loans and investment loans, whereas the growth of loans for other purposes strengthened. The volume of loans to enterprises and NFI achieved an increase of 25.7% in the first eight months of 2007, up almost 10 p.p. from the comparable period of 2006. Their year-on-year growth continued to record historically high levels (since comparable data have been available), reaching 37% at the end of August. In the eight months to August, the net borrowing of enterprises and NFI from domestic banks amounted to EUR 3,638.2 m, almost twice as much as in the same period of 2006. In June enterprises and NFI recorded net repayment of loans taken out abroad, followed by their net borrowing in July. Nevertheless, in the seven months to July the net flows amounted to EUR 314.6 m and were over a quarter lower than in the comparable period of 2006. Banks' borrowing abroad has seen a significant shift in the maturity of borrowing in the past two months. Domestic banks particularly intensified their net borrowing in the form of short-term loans (EUR 219.3 m in June and July; EUR 259.4 m in the first seven months of the year), while their net borrowing in the form of long-term loans eased off considerably, especially in July. In the coming months, when more data are available, it will be possible to assess whether these trends are the result of random events or whether they are linked to foreign banks' reaction to the developments in financial markets by limiting longer-term lending. In August the monthly increase in household loans was at the highest level this year due to seasonal factors (annual leave and the beginning of the school year). A notable increase was observed in loans for other purposes (probably reflecting an increased volume of overdrawn current accounts). The growth of consumer loans also rose somewhat. The growth of housing loans has hovered at a level around 3% for three months. In the eight months to August alone, households recorded net borrowing worth EUR 942.4 m, over a quarter more than in the same period of 2006. The year-on-year growth rate of household loans remains at a level of 25%, the highest rate in the EMU. Among the new member states, the Baltic states have been recording particularly high growth rates (even exceeding 50%). In 2006 household loans as a share of GDP in Slovenia totalled 17.7%, while the average in the EMU was 54.0%. Graph: Dynamics of year-on-year growth rates of household loans in the EMU and in Latvia and Lithuania 75 60 45 30 15 0 Source of data: Eurostat; Consensus Forecasts, September 2007. Note: forecasts from Q3 2007 onwards. Stock Exchange Slovenian Economic Mirror IMAD No. 10/2007 p. 8 Turnover and market capitalisation on the Ljubljana Stock Exchange Turnover, I-IX 2007 Market capitalisation, 31. IX 2007 EUR m Growth rates (%), I-IX 2007/I-IX 2006 EUR m Growth rates (%), 30. IX 07/30. IX 06 Total 2,997.0 3.2 26,597.0 69.1 Official market Total 2,303.1 148.8 21,678.0 80.3 Shares 2,195.3 153.9 16,610.0 147.5 Bonds 59.7 -1.8 4,892.0 -7.8 Mutual funds 48.1 - 176.0 - Semi-official market Total 381.5 0.3 4,919.0 32.9 Shares 227.0 28.9 2,915.0 70.5 Bonds 57.3 -32.1 1,014.0 -20.4 Shares of investment funds 97.1 -19.0 990.0 38.0 MMTS (Market Maker Trading Segment Total 312.3 -80.5 - - Bonds 193.2 -79.1 - - Short-term securities 119.1 -82.4 - - Source of data: Ljubljana Stock Exchange, calculations by IMAD. Notes: figures do not always add up due to rounding; 1data are available from September 2005 onwards. After the main index (SBI20) enjoyed a record-high gain in the second quarter, its growth rate halved in the subsequent months, but it nevertheless remained at a high level. In the third quarter its value rose by 14.5%, largely as a result of the high growth rates recorded in July and August, whereas the index declined in September. Similar dynamics continued in October. The value of the SBI20 thus surged by 89.4% in the first nine months of 2007, reaching the highest increase on record in the comparable period. As with the main index, the quarterly growth of market capitalisation halved in the third quarter to total 7.7%. The market capitalisation of shares (excluding investment funds) witnessed the sharpest slowdown by almost two thirds to 10.8%. The market capitalisation of bonds continued to decline in the third quarter, when it was 2.5% lower than at the end of the second quarter (it dropped by as much as a tenth in Q2). Due to the high growth rates recorded in the first half of the year, the total market capitalisation rose by 40.3% in the nine months to September, posting the highest gain in five years. After the share of nonresidents in market capitalisation on the Ljubljana Stock Exchange had been rising month by month (at the end of August it totalled 6.17%, the highest level since August 2003), it shrank to 5.82% in September. This appears to be the result of the reaction to negative developments on the Ljubljana Stock Exchange. In the third quarter of 2007 turnover rose by 41.7%, year on year, after it fell short of the levels from comparable periods of the previous year in the previous two quarters (largely due to the lower volume of turnover on the MMTS). The substantial increase primarily reflects sizeable trading in shares (excluding investment funds), where turnover grew 2.5fold from the comparable period of 2006. Trading in shares was mainly propelled by the high yields. Turnover in other segments of the market lagged behind the levels achieved in the same period of 2006. Despite the high quarterly growth, the turnover in the first nine months of the year was roughly at the level of the same period of 2006 due to the drop in the first two quarters. Trading in shares (excluding investment funds) picked up, recording a 2.3-fold increase in value over the same period of 2006. Meanwhile, trading in bonds plummeted by 70% (the MMTS witnessed an almost 80% drop), whereas trading in shares of investment funds declined by 19.0%. Following the relatively high growth rates of the main indices on foreign capital markets in the second quarter, their values mostly declined in the third quarter. The decreases ranged between 1.8% and 7.5%. This development appears to be linked to the financial crisis caused by the crisis in the American market of subprime mortgages. Nevertheless, the American stock exchange indices Dow Jones and NASDAQ recorded gains in the third quarter, which were, however, largely the result of the positive response of investors to the 0.5% cut in the Fed's key interest rate to 4.75% in September. Graph: Structure of quarterly turnover on the Ljubljana Stock Exchange 60% 40% 20% 0% □ Investment funds □ Shares Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2003 2004 2005 2006 2007 Source of data: Ljubljana Stock Exchange, calculations by IMAD. General Government Revenue Slovenian Economic Mirror IMAD No. 10/2007 p. 9 I-IX 2007, Growth index, nominal Structure, I-IX General government revenue in EUR IX 2007/ IX 2007/ I-IX 2007/ thousands VIII 2007 $ 2006 I-IX 2006 Total general government revenue 9,343,448 91.0 101.4 106.7 100.0 100.0 Corporate income tax 874,007 103.9 98.9 111.0 9.4 9.0 Personal income tax 1,274,664 84.3 99.5 97.9 13.6 14.9 Domestic taxes on goods & services 3,038,408 82.1 96.4 109.1 32.5 31.8 Value added tax 2,020,163 79.4 87.0 106.5 21.6 21.7 Excise duties1 831,678 100.0 107.1 114.0 8.9 8.3 Customs duties, other import taxes 85,163 124.8 282.0 243.0 0.9 0.4 Social security contributions 3,300,691 101.1 108.3 108.2 35.3 34.9 Other revenue 770,515 86.2 90.5 97.0 8.2 9.1 Source of data: AP, PPA, B-2 Report (gross deposits); methodology and calculations by IMAD. Note: 1the figure is adjusted for excise duty payment periods. In the first nine months of the year, the total general government revenue rose by 3.6% in real terms, year on year. Following the weak real growth of general government revenue at mid-year (2.1%), its real growth picked up somewhat in August and September after the relatively favourable inflows of taxes and contributions. This year, taxes and contributions have evolved in a relatively favourable macroeconomic environment and in compliance with the amended tax legislation, which has affected their volume and structure. The effect of the macroeconomic environment on general government revenue in a given tax system is largely reflected in the nominal dynamics of the tax and contribution base. As much as two thirds of the general government revenue follows the nominal growth of the gross wage bill, which has been rising faster than planned this year, as both the wages per employee and the number of employees have exceeded the planned growth rates. Therefore, all taxes and contributions that are paid on the basis of the gross wage bill will be higher than planned this year. The strong economic growth has benefited particularly the revenue from excise duties (petroleum products) and some other taxes that are less significant in the tax structure. Due to the structure of economic growth, which has been mainly generated by exports and investment this year, the dynamics of value added tax have been slightly below expectations, since revenue from VAT is primarily determined by the evolution of household and government consumption, which has lagged behind GDP growth this year. The first effects of the tax reform were already visible in the nine months to September. The lagging of general government revenue behind GDP growth in an otherwise supportive macroeconomic environment suggests a lower tax burden for households and businesses. Due to the amendments to tax legislation enforced this year, the revenue from personal income tax and payroll tax decreased already in the first nine months of the year. The enacted amendment to value added tax regulations resulted in lower liquidity shortfalls in the revenue from VAT. The effect of the amended Corporate Income Tax Act will not be seen until 2008. Revenue from excise duties rose faster than total revenue due to the increase in excise duties and the strong economic growth. This revenue rose by a real 10.7% in the nine months to September. Excise duties on mineral oils were cut in September to the minimum level to mitigate the effect of global oil prices on domestic inflation. Excise duties on cigarettes were raised in July in accordance with the programme of harmonisation of excise duties with the European directive. March also saw the imposition of an excise duty on electricity. The real growth of revenue from social security contributions has been stable. With unchanged contribution rates (38.2%) it totalled 5% in the first nine months of 2007, year on year. Also favourable were the inflows of corporate income tax, which increased by a real 7.8% in the analysed period. The increase in revenue from this source was underpinned by last year's good business results. It was only slowed slightly by the final annual tax assessments, which were lower than in 2006 due to the amended law. The current monthly tax advance payments are still determined on the basis of the tax calculation for 2006, whereas the tax assessments pursuant to the new Corporate Income Tax Act will be carried out in 2008 based on the final annual tax assessments for 2007. Revenue from value added tax increased by a real 3.4% in the first nine months, year on year. Compared with the real growth of the total revenue from VAT, the real growth of VAT from imports was faster (8.7%), while the real growth of revenue from accrued VAT was slower (1.8%). The growth of revenue from VAT, which generally follows domestic household and government consumption, picked up somewhat in July and August. Revenue from personal income tax paid pursuant to the new Personal Income Tax Act (see SEM 4/2007: 12) decreased by 5% in real terms in the nine months to September, year on year. Personal income tax advance payments on income from employment declined by a real 4.8%, while advance payments from other sources increased by 6.3%. The tax refunds based on tax returns for 2006 additionally contributed to the decrease in revenue. The decline in revenue from payroll tax due to the gradual lowering of the tax rates has continued. In the first nine months of the year, this revenue contracted by 15.9% in real terms compared with the same period of 2006. Labour Market Slovenian Economic Mirror IMAD No. 10/2007 p. 10 thousands % growth Selected labour market indicators I-XII VIII XII VIII VIII 2007/ I-VIII 2007/ O 2006/ 2006 2006 2006 2007 VII 2007 I-VIII 2006 O 2005 Registered labour force (A=B+C) 910.7 908.2 911.3 923.1 -0.1 1.4 0.6 Persons in formal employment* 824.8 825.2 833.0 854.6 0.0 3.5 1.4 in enterprises and organisations 675.1 674.7 681.7 696.1 0.0 3.0 1.3 by those self-employed 66.5 67.3 67.5 71.0 0.2 5.2 1.7 self-employed and farmers 83.3 83.2 83.8 87.5 0.2 6.1 2.1 Registered unemployed 85.8 83.1 78.3 68.5 -2.3 -18.0 -6.6 women 47.0 46.4 42.6 38.1 -3.2 -17.3 -4.9 aged over 40 39.7 39.3 37.7 36.6 -1.0 -7.1 -0.9 unemployed more than 1 year 41.9 41.3 39.7 35.6 -0.6 -12.6 -3.6 Rate of registered unemployment (C/A), % 9.4 9.1 8.6 7.4 - - - male 8.9 7.3 7.1 5.9 - - - female 12.0 11.4 10.5 9.3 - - - Job vacancies 19.0 16.4 15.9 19.7 4.8 6.5 12.3 for a fixed term, % 75.3 78.5 76.4 77.1 - - - Number of people hired 13.0 9.9 9.1 9.9 -1.4 -1.3 13.8 Lower education 3.9 3.1 2.6 3.2 2.6 2.6 19.4 Secondary education 7.1 5.5 5.2 5.4 -3.2 -3.0 13.8 Tertiary education 2.0 1.3 1.3 1.3 -3.6 -3.2 4.3 Sources of data: SORS, ESS, calculations by IMAD. Note: 'persons in employment according to administrative sources. In August and September the relatively favourable trends in the labour market continued. Due to the holiday season, the number of persons in formal employment remained almost unchanged in August, while the number of the unemployed decreased. Thus, the registered unemployment rate declined to 7.4%. In September the number of the registered unemployed fell again (to 66,658), in large part due to increased outflows for reasons other than employment. After the decline in the summer, the number of vacancies and persons hired rebounded in September, while the total number of persons hired in the first nine months of the year was lower than in 2006. The number of work permits for foreign workers is also still rising. It totalled 63,860 in September. The construction sector again recorded the highest monthly increase in employment (0.9%) in August. Further fairly strong gains (0.3%) were observed in transport and in other community, social, and personal services, while positive growth was also recorded in business services, trade, and financial intermediation. The number of workers in the manufacturing sector fell by 502 or 0.2%, similar to July. September's flows of registered unemployment show a smaller inflow into unemployment, yet also a lower outflow into employment than in September 2006. A total of 5,864 persons were newly registered as unemployed; 4,233 thereof because they lost work (almost a fifth more than in August, but 17.6% fewer than in September 2006). Meanwhile, 4,426 unemployed persons found work (15.8% more than in August, but 17.0% fewer than in September 2006). The outflow from unemployment for other reasons was also much higher than in the previous months (net outflow totalled 2,687 persons, 40.8% more than in August, but 34.4% fewer than in September 2006). The outflow of unemployed persons into full-time education and the outflow of persons who signed off the unemployment register voluntarily increased. Throughout the year, inflows into unemployment have been lower than last year by a fifth; at the same time, however, fewer unemployed persons than last year were hired. As in the first and second quarters, inflows into unemployment were lower by a fifth in the third quarter of 2007 than in the same period of 2006. On the other hand, the number of unemployed persons who found work was also lower than last year. In the third quarter their number was 16.2% lower than in the comparable period of 2006. The decrease in the number of persons unemployed for other reasons was also smaller than last year (by 36.7% in the third quarter, which was again largely due to the smaller number of persons who were struck off the unemployment register for neglecting their duties as unemployed persons; see SEM 7/2007: 11). In the nine months to September, the number of new vacancies was 5.9% higher than in the same period of 2006, while the number of persons hired was 0.9% lower. Among those who found work, the number of persons with lower education was higher than last year, while the number of those with secondary or higher education was lower this year (see graph). There were also fewer vacancies available for highly educated workers. Graph: Persons hired by level of education; quarterly flows 2004-2007 ■ Lower education -Secondary education -Tertiary education 20,000 16,000 12,000 8,000 4,000 0 Q1 2004 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2005 2006 Source of data: ESS, calculations by IMAD. Q2 Q3 Q4 Q1 2007 Q2 Q3 B C D E F Earnings Slovenian Economic Mirror IMAD No. 10/2007 p. 11 Gross wage per employee, growth index Wages in In nominal terms In real terms1 EUR VIII 07/ VIII 07/ I-VIII 07/ VIII 07/ VIII 07/ I-VIII 07/ VIII 2007 VII 07 VIII 06 I-VIII 06 VII 07 VIII 06 I-VIII 06 Gross wage per employee, total 1,279.40 101.3 105.7 105.7 101.0 102.1 102.7 Private sector (activities A-K) 1,210.50 102.6 106.8 106.5 102.3 103.2 103.5 A Agriculture 1,072.38 104.2 108.7 107.6 103.9 105.0 104.5 B Fisheries 1,077.60 106.2 112.4 104.3 105.9 108.6 101.2 C Mining and quarrying 1,548.96 102.1 103.9 104.2 101.8 100.4 101.3 D Manufacturing 1,131.88 103.7 106.9 106.2 103.4 103.2 103.2 E Electricity, gas, and water supply 1,602.19 106.7 105.2 104.1 106.4 101.7 101.2 F Construction 1,071.34 102.0 105.3 106.9 101.7 101.8 103.9 G Wholesale. retail; certain repairs 1,151.13 101.3 107.8 107.7 101.0 104.1 104.7 H Hotels and restaurants 944.58 102.7 106.0 105.1 102.4 102.4 102.1 I Transport, storage & communications 1,342.61 101.0 105.7 105.7 100.7 102.2 102.8 J Financial intermediation 1,853.31 101.1 107.1 107.9 100.8 103.5 104.8 K Real estate, renting, business services 1,360.73 102.3 107.6 106.3 102.0 104.0 103.3 Public services (activities L-O) 1,485.65 98.4 103.5 104.2 98.1 100.0 101.3 L Public administration 1,511.81 96.6 104.9 104.5 96.3 101.4 101.5 M Education 1,555.55 99.0 102.6 104.8 98.7 99.1 101.8 N Health and social work 1,401.24 98.5 103.3 103.5 98.2 99.8 100.6 O Other social and personal services 1,415.35 101.2 103.1 103.6 100.9 99.6 100.7 Source of data: SORS and IMAD calculations for the private sector and public services. Note: deflated by the consumer price index. In August the gross wage per employee increased by 1.3% in nominal terms and by 1.0% in real terms (consumer prices rose by 0.3%). The gross wage in the private sector (activities A through K) rose more than the overall gross wage, by 2.6% in nominal and 2.3% in real terms. The increase in earnings was largely due to the adjustment mechanism from the Collective Agreement on the Wage Adjustment Mechanism, Reimbursement of Work-Related Costs, and Holiday Allowances. Earnings under the collective agreement rose by 2% and by an additional 0.5% to cover the difference between the actual inflation rate in 2006 and that projected in the adjustment mechanism. The activity-specific differences in wage increases were largely due to the differences in workload rather than the more advantageous adjustment mechanism agreed upon at the level of individual activities. The adjustment percentage was more favourable in four sectoral collective agreements; it totalled 3% in three of these (graphic, newspaper, and metal industries) and 2.8% in construction. In all other activities, the adjustment percentage was 2.5%, in line with the collective agreement. In the industry and construction group (C, D, E, F), the gross wage per employee rose by a nominal 3.6%. The largest increase in this group was recorded in the electricity, gas, and water supply sector. The most moderate nominal growth (1.4%) was registered in the group of production services (G, H, I). The gross wage per employee in business services (J, K) rose slightly more, by 1.9% in nominal terms. The gross wage in public services (L through O) fell by a nominal 1.6% and by a real 1.9% in August. The nominal decrease in earnings was expected due to the effect of the comparable base, since July's wages were higher due to the mid-year payment of the difference between last year's actual and projected inflation. The largest decline in gross wages was observed in public administration, where wage movements are most dependent on the adjustment mechanism. In the education and health sectors, earnings may also be influenced by other factors (the volume of additional school activities, overtime work, hours worked on duty, and the dynamics of wages observed at private providers of services in these branches). All adjustments agreed in collective agreements were realised with the August wages. In the public sector no other major wage increases are foreseen, except for the bonuses for work performance and the wage increases due to promotions in October. In the private sector, a significant increase is expected at the end of the year when the 13th month's payments are to be disbursed. Based on these assumptions, the gross wage will record a nominal increase of 6.6% in the private sector and 4.7% in the public sector in 2007 relative to 2006. Graph: Nominal gross wage per employee by groups of activities • Total Public services Production services Private sector (A to K) Industry, construction Business services Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug 2006 2007 Source of data: SORS, calculations by IMAD. Manufacturing Slovenian Economic Mirror IMAD No. 10/2007 p. 12 Growth rates, % Selected economic indicators VIII 2007/ VIII 2007/ I—VIII 2007/ I-XII 2006/ VII 2007 VIII 2006 I—VIII 2006 I-XII 2005 Production value1 -14.2 10.6 10.1 6.5 - highly export-oriented industries'2 -23.3 27.8 14.9 7.6 - mainly export-oriented industries3 -12.7 7.2 9.8 8.5 - mainly domestic market-oriented industries4 -3.6 6.3 4.6 0.8 Average number of employees -0.2 0.9 1.0 -1.7 Labour productivity -14.0 9.6 9.0 8.3 Level of inventories5 0.5 11.1 8.2 1.8 Turnover5 -16.6 12.1 9.0 5.2 New orders5 8.4 0.7 11.3 5.5 Industrial producer prices (domestic market) 0.2 4.1 3.9 2.3 - producer prices/inflation -0.1 0.6 1.0 -0.2 Source of data: SORS; calculations by IMAD. Notes: real growth calculated on the basis of data on production value - SORS' recalculation with the IPI (provisional data); Manufacturing industries (DG, DK, DM) which have, according to data on Slovenian commercial companies from the AJPES, earned over 70% of their average net revenue from sales on foreign markets in the last three years on average; Manufacturing industries (DB, DC, DD, DH, DJ, DL, DN) which have earned 50-70% of their average net revenue from sales on foreign markets in the last three years on average; "manufacturing industries (DA, DE, DF, DI) which have earned less than 50% of their average net revenue from sales on foreign markets in the last three years; 5real growth. August witnessed the usual seasonal drop in industrial production. In comparison with July, industrial production declined by 14.2%, which is normal in August when many companies close for a collective holiday. According to data adjusted for season and working days, production growth was slightly positive (0.2%) in comparison with July. The manufacture of transport equipment (DM) contributed roughly one third to the year-on-year increase in August. This sub-industry, which represents around 5% of Slovenian manufacturing, contributed one third to August's 10.6% year-on-year production increase in the sector. Although the manufacture of transport equipment was substantially lower than in July (by 38%), it was a remarkable 89.9% higher than in August 2006.1 The robust growth seen in the last four months has substantially raised average growth in this activity, which totalled 11.4% in the eight months to August (until April it was still negative). The growth of turnover from sales on foreign markets has accelerated. In the first half of the year, the growth of turnover from sales on foreign markets fell short of the growth of turnover from sales on the domestic market, but the trend has reversed in recent months. In the first eight months of the year, the manufacturing sector increased its sales abroad by 9.7%, while it raised its sales at home by 7.4%. Further favourable sales on foreign markets will also be underpinned by accelerated sales of transport equipment (DM), the most export-oriented industry of Slovenian manufacturing which generates more than 86% of turnover on foreign markets. In comparison with July, manufacturing also recorded a decline in employment. The number of formally employed persons fell by 502 or 0.2% in August. This phenomenon is characteristic of August and has been observed in all but three out of the 14 manufacturing sub-industries.2 The largest increase in employment was recorded in the manufacture of metals and metal products (DJ), by 73 persons or 0.2%. In the eight months to August, this sub-industry, which has been actively hiring new labour since the beginning of the year, employed 2,667 or 6.4% more workers than in the same period of 2006. Employment trends were also favourable in the manufacture of transport equipment (DM), which employed 1,165 or 10.3% more workers than in the same period of 2006, in anticipation of accelerated production activity. The massive hiring in these industries more than offset further drops in employment in some of the more labour-intensive industries (the food, textile, and leather industries jointly employed 2,607 fewer workers than in the same period of 2006). Although hiring is expected to slow down in the latter part of the year, the number of employees in manufacturing is projected to increase this year after several years of decline. In general, the manufacture of transport equipment tends to record weak production activity in August. The manufacture of metals and metal products (DJ), the leather industry (DC), and the furniture industry DN). However, the latter two industries employed significantly fewer workers than in August 2006. Graph: Production and employment in manufacturing according to export orientation (I—VIII 2007/I—VIII 2006) ] Highly export-oriented industries □ Mainly export-oriented industries □ Mainly domestic market-oriented industries Production volume Employment Source of data: SORS, calculations by IMAD. Transport Slovenian Economic Mirror IMAD No. 10/2007 p. 13 ected transport indicators Absolute data Growth, % Q2 2006 Q2 2007 Q2 2007/ Q2 2006 I-XII 2006/ I-XII 2005 Railways, in million passenger km 201 202 0.3 2.4 Roads,1 in million passenger km 236 222 -6.0 0.3 Urban, in thousand passengers 24,334 23,292 -4.3 -3.4 Air, in million passengers km 251 288 15.0 2.3 Airport, in thousand passengers 330 382 15.9 9.0 Railways, in million tonne km 814 913 12.1 3.9 Roads, in million tonne km 3,413 3,418 0.1 9.8 Maritime, in million tonne km 11,544 13,224 1 4.5 -6.4 Harbour, in thousand tonnes 3,877 3,967 2.3 22.5 Passenger transport Freight transport Source of data: SORS. Notes: excluding private transport of passengers by taxi, bus and car. Within passenger transport, bus transport continued to witness a year-on-year decline in the second quarter, while air transport and airport traffic rose substantially. In comparison with the second quarter of 2006, both the number of passengers using city bus transport and the volume of intercity and urban bus transport declined. Meanwhile, railway passenger transport stagnated. In comparison with the first quarter, air transport and airport traffic rose sizeably (their year-on-year increases in the first quarter totalled a respective 0.9% and 6.8%; see table). Looking at freight transport, there was a significant increase in maritime and railway transport, while the volume of road transport remained roughly at the level from last year's second quarter. After the volume of maritime transport fell by a fifth in the first quarter, it rose by 14.5% in the second quarter of 2007, year on year. The volume of transport has become more volatile in recent years, but the volume of goods carried has not contracted significantly relative to the global conjuncture witnessed in the industry in 2005. Maritime transport is one of the minor transport modes in Slovenia. Railway freight transport grew by 14.9% in the first quarter and continued to grow strongly in the second quarter. Harbour transport recorded a modest increase, while road freight transport did not increase in year-on-year terms in the second quarter, partly because of the very high volume of road transport seen in the second quarter of 2006. Data also show that the expansion in this mode of transport, boosted by the abolition of restrictions upon Slovenia's accession to the EU, has moderated somewhat this year Slovenia is near the top among EU countries according to the volume of road freight transport per capita. The assessment refers to the volume of freight transport expressed in tonne kilometres, undertaken by freight vehicles registered in a given country. It measures carriage by domestic freight vehicles in the country of registration and abroad, and not the volume of transport within the territory of a given country. In 2006 by far the most per capita road shipments were performed by carriers registered in Luxembourg (18,766 tkm; see graph). Slovenian carriers (with three times lower freight transport per capita) were ranked second and performed 58.9% more transport than the average carrier in the EU. The high intensity of road freight transport in Slovenia is the result of the surging growth rates of road transport, particularly in 2004 and 2005 (27.9% and 22.5%). From the second quarter of 2004 to the second quarter of 2007, the volume of shipments carried by freight vehicles registered in Slovenia increased by 53.8%. Domestic transport rose by 23.9%, while international transport climbed by as much as 63.8%. Within international transport, the largest (3.2-fold) increase was recorded in cross-trade transport and cabotage (transport performed in another country). The well-developed shipping industry in Slovenia is attributable to Slovenia's favourable position at the crossing of European corridors V and X. Transport on these corridors is increasing, and Slovenian carriers are exploiting new business opportunities. With Slovenia's entry into the EU, a number of administrative barriers for carriage within the EU were removed for Slovenian carriers (especially the procurement of a limited number of licences). Slovenia also negotiated the possibility to perform cabotage in the EU-15 countries, which the Eastern European countries that joined the EU together with Slovenia will only be allowed to do after the end of a five-year period. Graph: Road freight transport per capita in EU countries, 2006 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 18,766 LU* SI FI ES LT NL CZ AT LV SE PT IE EE SK BE DE DK EU IT* PL FR GR HU UK* RO BG CY Source of data: Eurostat, calculations by IMAD. Note: * data for 2005. Forestry Slovenian Economic Mirror IMAD No. 10/2007 p. 17 2002 2003 2004 2005 2006 Growth rates, % 2006/05 2006/01 Gross value added,1 current prices, SIT m 15,014 16,474 16,411 16,581 23,943 44.4 63.3 of which: - value of production 19,816 22,341 23,503 25,030 35,947 43.6 93.1 - value of intermediate consumption 4,803 5,867 7,092 8,449 12,005 42.1 203.5 Forest area, thousand hectares 1,150 1,158 1,164 1,169 1,174 0.4 2.7 Annual gross increment, thousand m3 7,102 7,290 7,446 7,569 7,652 1 .1 10.5 Growing stock, thousand m3 276,574 285,735 293,532 300,795 307,689 2.3 14.8 Annual removal, thousand m3 2,646 3,007 2,958 3,253 3,718 1 4.3 42.2 of which: - tending 1,885 1,866 1,734 1,873 2,288 22.1 19.2 - sanitation 566 976 1,055 1,212 1,224 1 .0 142.6 - deforestation 66 47 71 65 86 33.6 65.0 - for infrastructure 45 45 43 48 50 3.3 5.2 Removal intensity,2 % 37.3 41.2 39.7 42.8 48.6 - - Sources of data: SORS, Slovenian Forest Service (Forest Report for 2006); calculations by IMAD. Notes:1according to the economic accounts for 2 forestry; removal intensity is the ratio of the annual removal levels to the annual wood increment. The gross value added of forestry grew extraordinarily last year. According to the preliminary release of the economic accounts for forestry, the value added in this activity rose by 44.4%, as the value of production increased by a nominal 43.6%, while the increase in the value of intermediate consumption was somewhat lower (see table). Industrial wood contributed 63% to the total production value (five years ago 88%) and forestry services added 19%, while the rest came from wood fuel and other products. Over the last five-year period, the value of production almost doubled (the largest increases were observed in the values of forestry services and wood fuel), the value of intermediate consumption trebled, while gross value added increased by 63.3%. Although the share of forestry in the total value added of agriculture, hunting, and forestry is fairly low (in 2006, 9.0% according to the economic accounts), it has increased over recent years. The total forest area, wood increment, growing stock, annual removal, and removal intensity rose further last year. Forest area grew by 0.4%, the annual increment by 1.1%, while growing stock increased by 2.3%. Tree removal, which totalled 3.7 million m3 (60% conifers and 40% non-conifers), increased by 14.3% from 2005 and by 42.2% from five years ago. The predominant types of removal were tending and sanitation. Tending, which is vital for the development of forests and therefore the most extensive, increased for the second year in a row after the previous decline and accounted for 61.5% of total tree removal (11.9 p.p. less than five years ago). Sanitation, which has been growing rapidly year by year due to the spreading insect attacks, contributed as much as 32.9% to total removal (13.6 p.p. more than five years ago). As removal rose faster than increment, the removal intensity improved again (from 42.8% to 48.6%) to reach its highest level in 15 years. Nevertheless, removal intensity can be further improved, since the removal in 2006 totalled only 82% of all possible removal according to national forestry plans (in 2005, 75%). The maximum possible removal was again carried out in state-owned forests, while in private forests, comprising almost three quarters of the total forest area, removal was lower due to fragmented ownership. The quantity of wood obtained per unit of forest area in Slovenia is similar to the average level for EU countries, but it is growing at a faster rate. In 2005 it totalled 2.3 m3/ha, while the EU average was 2.5 m3/ha. The highest rates were recorded in Belgium (7.4 m3/ha), the Czech Republic (5.9 m3/ha), and Germany (5.3 m3/ha). In the last five years, wood production increased by 21.3% in Slovenia and by 9.6% in the EU. The dynamics of growth differ strongly across the member states: there were almost no changes in three countries, 13 countries produced more wood, while production fell in eight countries. Trends also varied in Europe's four largest wood producers: production rose in Sweden and Germany, but shrank in Finland and France (see graph). Graph: Wood production in 2005 and its increase in 2005 over 2000 across the EU countries 120 100 80 60 40 20 0 □ Production I Increase (right axis) ■ ■ ■ ■ ■ . ■ ■ _ ■ ■ ■ r*i □ ■ ■ ■ ■ nnnr-ir 60 40 20 0 % -20 -40 -60 £ ^ ra ro E < d ra a g n u i CD CÛ E > O S £ h n e Q Source of data: Eurostat. Note: Malta has no forests. Job Vacancy Rate Slovenian Economic Mirror IMAD No. 10/2007 p. 18 Job vacancy rate, % 2001 2002 2003 2004 2005 2006 2007 Q1 2007 Q2 TOTAL 0.7 0.6 0.7 0.8 0.9 1.0 1.1 1.2 A Agriculture, forestry, hunting 0.7 0.8 1.0 1.0 1.0 1.0 1.5 1.0 B Fishing, fish farming, and related service activities 0.5 0.5 0.5 0.9 0.4 0.4 0.0 0.4 C Mining and quarrying 0.2 0.1 0.1 0.2 0.3 0.2 0.3 0.2 D Manufacturing 0.6 0.5 0.5 0.6 0.7 0.8 0.8 0.8 E Electricity, gas, and water supply 0.2 0.2 0.2 0.2 0.3 0.3 0.2 0.3 F Construction 1.5 1.2 1.6 1.8 2.2 2.2 2.9 2.9 G Wholesale and retail trade, repair of motor vehicles 0.9 0.7 0.7 0.8 0.8 1.0 1.1 1.1 H Hotels and restaurants 1.2 0.9 0.9 1.2 1.3 1.4 1.4 1.6 I Transport, storage, and communications 0.6 0.5 0.5 0.7 0.9 0.9 1.0 1.1 J Financial intermediation 0.4 0.4 0.4 0.7 1 0.8 0.7 0.6 K Real estate, renting, and business activities 1.0 0.8 0.9 1.1 1.6 1.8 1.9 2.1 L Public administration and defence, compulsory social insurance 0.4 0.2 0.2 0.3 0.3 0.3 0.3 0.3 M Education 0.7 0.6 0.7 0.7 0.8 0.7 0.3 1.1 N Health and social work 0.5 0.6 0.5 0.5 0.5 0.5 0.4 0.5 O Other community, social, and personal services 0.5 0.5 0.5 0.6 0.5 0.5 0.7 0.6 Source of data: SORS. Note: the rate of job vacancies is the percentage of job vacancies relative to total jobs (vacancies + occupied posts). Slovenia has been experiencing excess demand (shortage of workers) in the labour market, which increased further in the first half of the year. The job vacancy rate (JVR) is one of the indicators of the difference between demand and supply in the labour market, i.e. labour shortages. The preliminary data on the JVR are consistent with the business surveys that report shortages of qualified labour as one of the limiting factors to production (see also SEM 7/2007, p. 11). At the level of the economy, the job vacancy rate has exceeded 1% since the second quarter of 2005, when economic growth accelerated. Excess demand for labour has been particularly strong in the construction sector, in hotels and restaurants, and in real estate, renting, and business services. The relatively high JVR in construction and in hotels and restaurants is partly linked to the above-average seasonal fluctuation of workers in these activities. In 2007 a sizeable increase in the JVR has been recorded especially in construction. At present, data on the excess demand by occupational groups show labour deficits particularly in elementary occupations and in craft and related trades. The JVR has been increasing despite the declining unemployment rate, which suggests that imbalances in the labour market are widening. Excess demand for labour is also widespread in other EU countries, where it is even higher than in Slovenia. According to preliminary data, the average JVR in the EU-27 was 2.1% in the second quarter this year. According to the available figures, the following countries are most in excess of the average rate: Germany (3.4%), Estonia (3.3%), the Czech Republic (2.7%), Finland (2.7%), and the UK (2.4%). We estimate that wage increases are currently not underpinned by pressures arising from labour shortages. We examined the hypothesis regarding wage pressures arising from labour shortages by analysing wage increases and job vacancies by activity. To this end, we separately analysed wage increases in activities in which the job vacancy rate exhibits the largest disparities between supply and demand (construction, hotels and restaurants, and real estate, renting, and business services). In the first half of 2007, the dynamics of the gross wage per employee in these sectors did not significantly diverge from the evolution of the average gross wage at the aggregate level (see also p. 11). Activity-specific data on wage increases and excess demand currently do not suggest any exceptional acceleration in wage increases in these activities. Employers have been compensating for excess labour demand with overtime work by existing employees, particularly in construction, where as many as 23.5% of workers have been working overtime (the average in the Slovenian economy is 18.1%). Wage pressures have probably also been mitigated by the hiring of foreign workers. From June 2005 to June 2007, the number of foreign workers in the construction sector surged by 45% (by 9,125 workers). As in construction, extensive hiring of foreign labour was likewise recorded in activity K, where the number of foreign employees rose by 36% (from 2,984 to 4,070) in this period, particularly due to the hiring in temporary work agencies. The current wage setting system, according to which collective agreements define the staring-level wages for specific qualification levels, provide few possibilities for further wage increases for the profiles in shortage. Furthermore, at present there is particularly a lack of low-skilled labour, for which employers are not prepared to pay a significantly higher price. The situation presented above is based on the SORS data on job vacancies and earnings by activity, which do not suffice for a more detailed analysis. For a more detailed analysis of wage pressures arising from labour shortages, we would need data on labour shortages broken down by specific profiles and their earnings. However, such data are not collected by the existing statistical surveys. Jobs and Employment by Region Slovenian Economic Mirror IMAD No. 10/2007 p. 19 Statistical region Number of jobs Percentage of jobs, SLO = 100% Increase in the number of jobs, % Activity rate, % Jobs per formal active population (job deficit index) Jobs per population in formal employment (daily migration index)* I-VI 04 I-VI 07 I-VI 04 I-VI 07 I-VI 07/ I-VI 04 I-VI 04 I-VI 07 I-VI 04 I-VI 07 I-VI 04 I-VI 07 Osrednjeslovenska 244,651 268,335 30.4 31.7 9.7 65.2 67.0 107.9 114.1 116.6 121.6 Obalno-kraška 42,489 45,236 5.3 5.3 6.5 63.1 65.2 90.0 91.9 97.9 98.3 Gorenjska 72,514 72,606 9.0 8.6 0.1 63.4 64.2 82.9 81.9 89.9 86.2 Goriška 46,681 48,399 5.8 5.7 3.7 63.0 64.6 89.6 90.9 96.1 95.8 Savinjska 103,919 106,853 12.9 12.6 2.8 65.2 66.0 87.4 88.1 100.1 97.9 Jugovzhodna Slovenija 53,489 55,612 6.6 6.6 4.0 65.3 67.1 85.1 85.0 92.7 91.6 Pomurska 42,676 43,065 5.3 5.1 0.9 63.7 63.9 77.0 77.8 92.9 90.4 Notranjsko-kraška 17,961 18,044 2.2 2.1 0.5 65.9 67.9 76.9 74.4 83.7 78.9 Podravska 117,769 124,555 14.6 14.7 5.8 62.3 63.6 83.4 86.5 97.8 97.1 Koroška 26,269 26,803 3.3 3.2 2.0 63.0 62.9 79.1 81.0 89.6 88.7 Spodnjeposavska 23,069 24,198 2.9 2.9 4.9 63.7 64.6 74.3 76.7 85.9 84.5 Zasavska 13,888 13,523 1.7 1.6 -2.6 63.5 63.2 67.6 66.7 79.3 74.3 SLOVENIA 805,375 847,228 100.0 100.0 5.2 64.1 65.3 89.5 92.0 100.0 100.0 Source of data: SORS; calculations by IMAD. Note: 'farmers are included. The Osrednjeslovenska region has the highest concentration of jobs. Over 31% of jobs in Slovenia are concentrated in this region, which is more than the joint proportion of the Podravska and Savinjska regions which follow. In 2007 (I-VI) over 2004 (I-VI), the Osrednjeslovenska region recorded the largest increase in the number of jobs (by 9.7%). Thus, this region's share also rose by 1.3 p.p. Further above-average increases were also observed in the Obalno-kraška and Podravska regions. The only region where the number of jobs dropped was Zasavska (see table). Only the Osrednjeslovenska region has a surplus of jobs relative to the resident active population. The number of available jobs exceeds the number of the formal active population by over 14%. This region also recorded surplus increase in the analysed period (by 6.3 p.p. - see table). The Zasavska region has been recording the largest job deficit for several years. There is a one-third shortage of jobs relative to the resident active population. In the observed period, this deficit increased further (by 0.9 p.p.). The Notranjsko-kraška region also has a notable shortage of jobs for the resident active population (the job deficit is more than 25%). Moreover, the deficit in this region saw the biggest increase (by 2.5 p.p.). Roughly one fifth of jobs are also lacking in the Spodnjeposavska, Pomurska, Koroška, and Gorenjska regions (see table). Regional job shortages result in daily work migration and increased unemployment rates. The Osrednjeslovenska region has the largest daily inflow of labour force (daily migration index), mainly from the neighbouring regions where jobs are lacking (Zasavska, Notranjsko-kraška, Gorenjska). On the other hand, the number of jobs in the Podravska and Savinjska regions is almost level with the number of the resident active population, but they nevertheless have high registered unemployment rates (see SEM 8-9/2007: 21). Here, the resident active population cannot find work in the region because the available jobs are inappropriate (structural unemployment). The formal employment rate has been rising in all regions over the past three years (see graph). In the analysed period, the formal employment rate rose most strongly in the Spodnjeposavska, Podravska, Notranjsko-kraška, and Obalno-kraška regions, while the highest increase in 2007 (I-VI) was recorded in the Notranjsko-kraška region, which has been compensating for the lack of jobs by daily work migration. Graph: Formal employment rate, % ] Jan.-June 2004 ■ Slovenia, Jan.-June 2004 ] Jan.-June 2007 ■Slovenia, Jan.-June 2007 g ž ra m o S Source of data: SORS, calculations by IMAD. 65 60 55 50 Technology Intensity - Companies in the Manufacturing Sector Slovenian Economic Mirror IMAD No. 10/2007 p. 20 Difference between net Activity Number of employees2 profit and net loss,3 SIT m Operating efficiency4 2005 2006 2005 2006 2005 2006 Manufacturing 202,755 206,408 158,950 204,081 1.046 1.052 High technology industries (HT)6 11,744 12,318 46,434 62,544 1.127 1.187 Medium-high technology industries (MHT)7 62,556 64,360 54,368 57,536 1.044 1.044 Medium-low technology industries (MLT)8 55,126 57,967 49,346 63,303 1.055 1.057 Low technology industries (LT)9 73,329 71,763 8,802 20,697 1.018 1.021 Activity Value added per employee, SIT thousand Share of labour costs in value added, % Export orientation5, % 2005 2006 2005 2006 2005 2006 Manufacturing 6,560 6,954 63.8 62.4 61.1 62.2 High technology industries (HT) 14,749 15,810 48.9 45.9 75.8 78.9 Medium-high technology industries (MHT) 6,632 6,919 64.6 64.3 74.9 75.5 Medium-low technology industries (MLT) 6,616 7,028 61.3 60.4 59.5 60.9 Low technology industries (LT) 5,144 5,407 72.1 70.7 41.1 41.0 Selected performance indicators for company groups1 in the manufacturing sector Source of data: Agency for Public Legal Records and Related Services (AJPES) - data from the balance sheets and profit and loss accounts for 2006; calculations by IMAD. Notes: 1at the level of the manufacturing industries (activity D; 3-digit SCA numerical code), companies are divided into four groups (HT, MHT, MLT, LT) according to their technology intensity, which is consistent with the OECD methodology (Hatzichronoglou, T.: Revision of the High Technology Sector and Product Classification, 1997); 2average number of employees calculated on the basis of working hours in an accounting period; 3in an accounting period; "operating revenues relative to operating expenses; 5net revenue from sales on foreign markets relative to net revenue from sales: 6DG-24.4, DL-30, 32, DM-35.3; 7DG (except 24.4), DK, DL (except 30, 32), DM-34, 35.2, 35.4; 8DF, DH, DI, DJ, _DM-35.1, DN-36 (except 36.1); 9DA, DB, DC, DD, DE, DN-36.1, 37._ One of the priorities of Slovenia's Development Strategy (SDS, 2005) in the area of economic competitiveness is to restructure the manufacturing sector in favour of the more high technology industries. This article analyses company performance in the manufacturing sector in 2006 with regard to achieving this strategic orientation. Due to the methodological changes introduced by the Slovenian Accounting Standards 2006, data for 2006 are compared to methodologically adjusted data for 2005, which include only those companies that operated in 2006. In the analysis of changes that occurred in the structure of manufacturing's value added we have retained a longer time series (2002-2006), since we estimate that in this case the differences are not so striking as to completely prevent year-on-year time comparisons (see the comparison of data for 2005 in Graph 1). In line with the OECD methodology, companies were classified into four groups of industries (Hatzichronoglou, 1997): high technology (HT), medium-high technology (MHT), medium-low technology (MLT), and low technology (LT) industries. In classifying industries, this methodology takes into account two criteria of technology intensity: the level of technology intensity characteristic of each industry, and the technology involved in the inputs of each industry. The former is defined by the ratio of R&D expenditure to value added, the latter by the technical coefficients for individual industries based on input-output tables. In 2006 the changes in the structure of value added in manufacturing companies were only partially positive with regard to the developmental goal. After a two-year decline, the share of high technology industries rebounded, but this increase was matched by an even stronger expansion of the share of medium-low technology industries, while the shares of medium-high and low technology industries contracted (see Graph 1). Companies in HT industries increased their structural share in the value added of activity D by 0.6 p.p. to 13.6%. However, the bulk (77.9%) of value added in HT industries was generated by pharmaceutical firms. These companies also produced a relatively high (10.6%) share of manufacturing's total value added. Companies in MHT industries slightly (by 0.2 p.p.) reduced their share in manufacturing's value added. The contraction in their structural share was largely caused by companies that manufacture instruments and appliances for measurement. Thus, the total contribution of HT and MHT industries edged up slightly and reached their highest value (44.6%) in the period 2002-2006. On the other hand, the share of MLT industries increased substantially last year (by 1.0 p.p.), primarily reflecting the effect of the strong business cycle in the construction sector and the expansion of some branches in this group (manufacture of precious and non-ferrous metals, cement and lime, structural metal products, and treatment of metals). The share of LT industries in value added has been declining. Since 2002 it has contracted by almost 7 p.p., to 27.0%. Last year, as in 2002, the manufacture of other food products and furniture contributed more than one fifth to value added in LT industries. A more detailed analysis of company performance shows that high-technology industries scored very highly last year in comparison with other categories. They ended the accounting period with a positive difference between net profit and net loss, which was 34.7% higher than in the previous year. The difference was largely due to higher net operating profits. Specifically, companies in the HT sector last Technology Intensity - Companies in the Manufacturing Sector Slovenian Economic Mirror IMAD No. 10/2007 p. 21 year achieved the largest improvement in their operating efficiency (see table). They also enjoyed by far the highest return on revenues (13.3%, i.e. 9.6 p.p. higher than the manufacturing sector on average). They achieved exceptional growth of operating revenues (9.9%), largely by boosting their sales on foreign markets, which surged by almost a quarter. Above-average returns on revenues were also recorded in MLT industries (3.9%), particularly in construction-related activities (18.9% in the manufacture of cement and lime, and 10.1% in cutting, shaping, and finishing stone). HT industries also achieved the highest increase in labour productivity last year. On balance, the value added per employee generated in HT industries was twice as high as the average in manufacturing. This is understandable, given the relatively high capital intensity of HT industries (assets per employee in HT companies is twice as high as that of the manufacturing sector as a whole). However, it is encouraging that HT industries also achieved the highest productivity growth (7.2%) last year. A notably high increase in labour productivity was also recorded in MLT industries on the back of the favourable trends in construction. Thus, the value added per employee in MLT industries for the first time exceeded (by 1.6%) the level of labour productivity generated in MHT industries (see table). The group of MLT industries also recorded the largest increase in the ' number of employees (5.2%) among all four groups. Export orientation also increases with higher technology intensity. As seen from the table above, export orientation is highest in both technology-intensive groups of industries (HT and MHT). Of all groups of industries, companies in HT industries also achieved the largest increase (by 3.1 p.p.) in their net revenue from sales on foreign markets relative to total net revenue. They realised most of their net revenue on markets outside the EU, contrary to activity D on average, which generated only a modest fifth of its revenue from sales on these markets (see Graph 2). The pharmaceutical industry, which increased its net revenue from sales on foreign markets by 30.7%, exported almost one third of its products to the Russian and American markets. In order to achieve even faster further development, the technologically most advanced industries will have to boost their investment in human resources and R&D activities.1 This is the only way for them to increase their absorption capacity for introducing cutting-edge technologies in the production process. The realisation of (technological) innovation also critically depends on non-technology skills (human resources management, quality control systems, organisational schemes, marketing). These areas certainly have room for improvement, which will boost the expansion of industries with the highest value added. According to the most recent data (2005), the Slovenian business sector invested 0.82% of GDP in R&D activities, while the EU-25 average was 1.01% of GDP. Graph 1: Structure of manufacturing's value added according to technology intensity, 2002-2006 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 25.0 11.8 >31 4 > 25.4 14.3 26.1 13.9 28.5 28.4 312 I 13.° I 28.4 2002 2003 2004 2005* 2005*' 2006 ] MHT □ HT Source of data: AJPES, calculations by IMAD. Notes: * Data refer to companies that operated in 2005 and submitted data to AJPES in the current year. ** Data for 2005 refer only to companies that operated in 2006, since these data are not fully comparable to data submitted for 2005 as a current year due to methodological changes related to the Slovenian Accounting Standards 2006. Graph 2: Structure of net revenue from sales in groups of manufacturing industries, 2006 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% ] Domestic market □ EU market □ Markets outside the EU MHT MLT LT Source of data: AJPES, calculations by IMAD. 10.2 A-O 3 LT 27.0 29.9 33.9 27.2 27.4 Public Finance Flows between Slovenia and the EU Slovenian Economic Mirror IMAD No. 10/2007 p. 22 EUR m Structure, % EUR m Structure, % 2000-2006 2000-2006 2004 2005 2006 2004 2005 2006 Funds received from the EU budget 1,270.2 100.0 282.0 366.1 406.0 100.0 100.0 100.0 Agriculture 311.8 24.5 49.4 102.6 159.9 17.5 28.0 39.4 Structural actions 168.9 13.3 24.4 53.5 91.0 8.7 14.6 22.4 Structural funds 129.9 10.2 24.4 45.0 60.5 8.7 12.3 14.9 Cohesion Fund 39.0 3.1 0.0 8.5 30.5 0.0 2.3 7.5 Internal policies 222.4 17.5 57.9 65.9 78.5 20.5 18.0 19.3 External actions 1 .4 0.1 0.0 0.0 0.0 0.0 0.0 0.0 Administrative expenditure 25.2 2.0 6.1 6.8 7.8 2.2 1.9 1.9 Pre-accession strategy 280.6 22.1 39.1 43.6 7.9 13.9 11.9 1.9 Compensations 259.8 20.5 105.1 93.8 61.0 37.3 25.6 15.0 Payments to the EU budget 724.2 100.0 170.4 274.7 279.1 100.0 100.0 100.0 VAT-based own resource payments 1 16.8 16.1 25.1 43.9 47.8 14.7 16.0 17.1 Payments for the UK correction 60.7 8.4 16.1 23.2 21.4 9.5 8.4 7.7 GNI-based own resource payments 471 .0 65.0 116.9 179.5 174.6 68.6 65.3 62.6 Traditional own resources (TOR) 75.7 10.5 12.3 28.1 35.3 7.2 10.2 12.6 Net position according to the accounting definition - - 111.6 91.4 126.9 - - - Net position based on the UK correction - - 109.7 101.5 142.7 - - - Source of data: European Commission; calculations by IMAD. Note: the sums may not add up due to rounding. The European Commission (EC) has published final data regarding the public finance flows between Slovenia and the EU in 2000-2006. In this period, Slovenia received a total of EUR 1,270.2 m in funds from the EU budget and paid EUR 724.2 m to the EU budget. In the years 2004-2006, for which the net position is calculated, Slovenia was a net recipient of funds. In 2006 Slovenia's net receipts totalled EUR 126.9 m according to the accounting definition of the net position, and EUR 142.7 m according to the definition based on the UK correction. In 2000-2003, Slovenia's total receipts amounted to EUR 216.1 m. In the first four years, Slovenia received most funds under the pre-accession strategy (87.9%). These funds varied across the years - they were highest in 2002 (EUR 58.5 m) and lowest in 2000 (EUR 30.8 m). In the first period, funds for internal policies also represented a substantial proportion (9.3%) of the total funds received. The absorption of funds under this heading increased year by year: in 2003 over 2000 by as much as 3.2-fold. The structure of funds acquired for internal policies differs considerably in the two periods. In the first period, most funds were acquired for research and technological development (84.4% of these funds), followed by funds for training, youth, culture, etc. (9.3%), and energy (4.3%). In this period Slovenia also received funds for external actions (0.7%) and administration (2.1%). Within the financial framework for enlargement, negotiated in Copenhagen in 2002, Slovenia was granted EUR 1,023 m under "payment appropriations"1 and EUR 1,445.7 m under "commitment appropriations"2 for the period 2004-2006. The funds appropriated in Copenhagen do not include funds for the pre-accession strategy and administrative expenditure, 1The level of planned payment appropriations is generally based on the expected average absorption of countries in the previous period. The calculations are prepared by the European Commission based on past experience with the absorption of funds. 2 The maximum available funds negotiated by each member state. which combined accounted for 10.6% of all funds received in 2004-2006. The absorption of funds according to the Copenhagen package excluding these two items was 92.2% in payment appropriations and 65.2% in commitment appropriations. Together with the funds for pre-accession strategy and administrative expenditure, Slovenia has received EUR 1,054.1 m from the EU budget since joining the EU. In 2004-2006, Slovenia received the highest proportion of funds for agriculture (29.6%). The absorption of these funds has increased each year (in 2006 over 2004 by more than 3.2-fold). Most funds were acquired for rural development (76.2%), followed by direct aids (17.6%), export refunds (3.0%), other funds (2.7%), and storage (0.5%). Agricultural funds can also be divided into funds for plant products (9.7% of funds for agriculture), animal products (13.2%), ancillary expenditure (1.0%), and funds for rural development (76.2%). Relative to payment appropriations, Slovenia's absorption rate in agricultural funds was 83.2%; Slovenia was very successful in acquiring funds for rural development (118.5% realisation) but less successful in acquiring funds under the Common Agricultural Policy (CAP), where absorption was just 42.7%. The amount of pre-accession funds acquired in 2004-2006 was 2.1 times lower than in the first period. The lowest figure was recorded in 2006. Compensations amounted to EUR 259.8 m. The absorption of these funds started after accession to the EU. Relative to payment appropriations, the absorption of these funds was 97.8%. The absorption of funds for internal policies rose substantially after Slovenia became an EU member (tenfold relative to the first period). At the same time, the structure of these funds also changed significantly in comparison with the first period. In the second period, most of these funds were received for participation in the Schengen facility programme (68.9% in 2004, 53.5% in 2006), followed by funds for training, youth, culture, etc. (11.4%). Slovenia was most successful in drawing funds for internal policies, where the absorption rate relative to payment appropriations totalled 101.1%. In 2004-2006 Public Finance Flows between Slovenia and the EU Slovenian Economic Mirror IMAD No. 10/2007 p. 23 Slovenia received EUR 129.9 m from structural funds. The absorption of these funds increased year by year (in 2006 over 2004 almost 2.5-fold). Most funds under this heading were acquired for the realisation of the first objective (supporting development and structural adjustment of less prosperous regions: 95.7% of these funds). Within that, most funds were acquired from the European Regional Development Fund (EUR 86.4 m), while the amount received from the European Social Fund was EUR 28.3 m. Slovenia started to draw funds from the cohesion fund in 2005 and acquired EUR 39.0 m in two years. In 2006 over 2005, absorption increased 3.6-fold. Relative to the Copenhagen package, Slovenia was also successful in absorbing these funds. Compared with payment appropriations, the absorption rates totalled 93.7% for the structural funds and 89.1% for the cohesion fund. The share of funds received for administrative expenditure was minimal in 2004-2006 (2.0%). Slovenia started to pay contributions to the EU budget after it joined the EU. In 2004-2006, its total payments amounted to EUR 724.2 m. The payments have increased over the years, but their structure has not changed significantly. GNI-based payments accounted for the largest share of payments in the analysed period, although their proportion has declined over the years (see table). They were followed by VAT-based payments and traditional own resources (TOR); the latter represent pure EU revenue. Member states pay 75% of the collected TOR into the EU budget and keep 25% as compensation for the cost of collecting these funds. In 2004-2006, the largest share within the TOR was customs duties (98.3%), while sugar levies (1.1%) and agricultural duties (0.6%) accounted for just a fraction. To cover the cost of collecting TOR, Slovenia kept EUR 25.2 m in the three years. Payments for the UK correction made up the smallest share of payments to the EU budget in 2004-2006. According to preliminary and incomplete data of the Ministry of Finance, Slovenia was a net contributor to the EU budget until September 2007 (according to the accounting definition) in the amount of EUR 46.3 m. These figures are not comparable to EC data, since they exclude the funds paid directly to recipients in Slovenia for internal policies and data on advance payments from the structural fund and funds for rural development. In the first nine months of 2007, Slovenia received EUR 199.8 m from the EU budget (34.3% realisation relative to the amended budget for 2007) and contributed EUR 246.1 m to the EU budget. Since these data do not comprise the total allocated funds from the EU budget, the EC final data for 2007 will probably be higher than the currently available figures. However, even the "old" member states tend to have low absorption rates in the first year of a new financial perspective. According to the MF's preliminary and incomplete data, Slovenia has again received the most funds for agriculture in 2007. These funds amounted to EUR 115.3 m, or 57.7% of the total funds received. The highest share was again acquired for rural development. Slovenia received 19.8% (EUR 39.5 m) of total funds for internal policies, of which 95% was for the Schengen facility, while 5% was granted for the implementation of internal policy. Another 13.7% of funds were acquired for structural policy; the bulk of that (65.8%) came from the ERDF, followed by the ESF (16.3%) and the EAGGF (17.6%). Under the cohesion policy, Slovenia acquired EUR 9.2 m or 4.6% of the total funds received. Most of this amount was for the environment (92.3%), followed by transport. EUR 6.3 m (3.2% of the received funds) were acquired under pre-accession funds; the majority was again granted for the PHARE programme (69.0%), followed by the ISPA instrument (31.0%). In the nine months to September, Slovenia paid EUR 246.1 m into the EU budget. This corresponds to 77.6% of the funds planned in the amended budget for 2007. As in previous years, the GNI-based payments were again the highest (54.5%). Traditional own resources (TOR) have increased substantially in 2007 and accounted for as much as 23.7% of total payments. Relative to the same period of 2006, they increased 2.3-fold. Customs duties, having risen more than 2.3-fold in comparison with the same period of 2006, comprised the bulk of TOR payments (99.5%). Payments for the UK correction contracted to 7.0% of total payments to the EU. Graph: Structure of Slovenia's receipts from the EU budget, 2000-2006 Structure of received funds, 2000-2003 Administrative expenditure 2% Structure of received funds, 2004-2006 Pre-accession strategy 9% Administrative expenditure 2% Internal policies 9% Source of data: European Commission; calculations by IMAD. Gross Domestic Product / I Slovenian Economic Mirror IMAD No. 10/2007 p. A 2 2003-2006 constant previous year prices, 2007-2009 constant 2006 prices In SIT m In EUR m Real growth rates in % 2007 2008 2009 2007 2008 2009 2003 2004 2005 2006 forecast 2004 2005 2006 forecast VALUE ADDED BY ACTIVITIES AND GROSS DOMESTIC PRODUCT A Agriculture, hunting, forestry 123,669 147,506 139,222 142,730 608 617 627 15.1 -4.4 -3.8 1.0 1.5 1.5 B Fishing 800 875 1,014 996 4 4 4 -7.0 20.4 1.5 0.0 1.0 1.0 C Mining and quarrying 24,674 28,084 30,647 32,719 137 137 1 37 6.8 0.4 7.5 1.0 0.5 -0.5 D Manufacturing 1,278,086 1,385,784 1,441,576 1,538,233 6,927 7,339 7,732 3.7 3.6 8.5 8.5 6.0 5.3 E Electricity, gas and water supply 140,397 153,187 174,594 187,081 769 780 784 6.8 5.7 5.7 -3.0 1.5 0.5 F Construction 264,015 282,539 316,444 394,283 1,892 2,062 2,073 0.0 4.9 15.2 14.0 9.0 0.5 G Wholesale, retail; certain repairs 563,223 628,070 679,306 753,850 3,408 3,553 3,689 4.2 4.5 6.1 7.5 4.3 3.8 H Hotels and restaurants 108,731 115,150 127,161 137,422 634 665 696 -1.1 1.2 2.9 3.0 5.0 4.5 I Transport, storage and communications 357,817 402,669 442,608 500,231 2,221 2,342 2,495 5.3 6.1 9.4 6.5 5.5 6.5 J Financial intermediation 222,430 263,041 278,993 285,593 1,403 1,486 1,584 17.1 10.5 9.8 7.0 6.0 6.5 K Real estate, renting and business services 807,976 886,022 978,785 1,047,398 4,695 4,895 5,118 2.8 3.5 3.7 4.8 4.3 4.5 L Public administration and defence 300,255 337,436 356,269 375,972 1,633 1,665 1,699 4.8 2.9 2.9 1.2 2.0 2.0 M Education 271,188 297,113 328,786 347,104 1,527 1,554 1,583 2.3 3.3 1.7 1.8 1.8 1.8 N Health and social work 247,634 275,279 299,347 310,503 1,345 1,385 1 ,427 5.6 5.2 1.6 1.7 3.0 3.0 O Other community and personal services 167,258 183,431 209,598 219,146 1,002 1,042 1,084 2.8 3.3 1.2 3.5 4.0 4.0 P Private households with employed persons 1,007 1,103 1,436 1,114 5 5 5 -8.1 5.9 -3.5 -4.1 0.0 0.0 VALUE ADDED (A+...+P) 4,879,160 5,387,291 5,805,787 6,274,375 28,210 29,530 30,736 4.4 4.0 6.0 5.9 4.7 4.1 Taxes on products and services 751,700 828,100 883,539 919,784 4,143 4,319 4,485 4.2 4.7 3.9 4.9 4.3 3.8 Less: subsidies on products and services 23,598 29,272 31,323 38,790 140 144 1 47 -2.0 -0.4 10.0 1.0 3.0 2.0 GDP 5,607,262 6,186,119 6,658,003 7,155,369 32,213 33,706 35,073 4.4 4.1 5.7 5.8 4.6 4.1 Source of data: SORS 2003-2006, IMAD's Autumn Forecast 2007. Real growth rates: SORS 2004-2006; IMAD's calculations and Autumn Forecast 2007. Note: a comparison of nominal values is possible under the technical assumption of the SIT/EUR exchange rate = 239.64, which has been used since 2007. Gross Domestic Product / II Slovenian Economic Mirror IMAD No. 10/2007 p. A 3 Current prices, in SIT m Current prices, in EUR m Structure in %, current prices, GDP=100 2007 2008 2009 2007 2008 2009 2003 2004 2005 2006 forecast 2004 2005 2006 forecast SUPPLY AND USE OF GROSS NATIONAL DISPOSABLE INCOME 1. GROSS DOMESTIC PRODUCT 5,922,917 6,392,985 6,768,266 7,296,627 33,177 35,953 38,482 100.0 100.0 100.0 100.0 100.0 100.0 2. Net primary income with the rest of the world -46,503 -75,128 -58,391 -78,661 -497 -474 -534 -1.2 -0.9 -1.1 -1.5 -1.3 -1.4 3. GROSS NATIONAL INCOME (1+2) 5,876,414 6,317,857 6,709,875 7,217,966 32,680 35,479 37,949 98.8 99.1 98.9 98.5 98.7 98.6 4. Net current transfers with the rest of the world 6,994 -10,555 -34,525 -50,281 -96 -81 -39 -0.2 -0.5 -0.7 -0.3 -0.2 -0.1 5. GROSS NATIONAL DISPOSABLE INCOME (3+4) 5,883,408 6,307,302 6,675,350 7,167,684 32,585 35,398 37,909 98.7 98.6 98.2 98.2 98.5 98.5 6. Final consumption expenditure 4,424,637 4,703,677 4,964,645 5,299,860 23,750 25,663 27,302 73.6 73.4 72.6 71.6 71.4 70.9 Private consumption 3,275,936 3,473,290 3,653,249 3,896,317 17,522 18,861 20,045 54.3 54.0 53.4 52.8 52.5 52.1 Government consumption 1,148,701 1,230,387 1,311,395 1,403,543 6,229 6,802 7,257 19.2 19.4 19.2 18.8 18.9 18.9 7. GROSS SAVINGS (5-6) 1,458,771 1,603,625 1,710,706 1,867,824 8,834 9,735 10,607 25.1 25.3 25.6 26.6 27.1 27.6 8. GROSS CAPITAL FORMATION 1,510,498 1,770,142 1,846,356 2,068,981 10,000 10,854 11,378 27.7 27.3 28.4 30.1 30.2 29.6 9. SURPLUS ON THE CURRENT ACCOUNT WITH THE ROW (7-8) -51,727 -166,516 -135,650 -201,156 -1,165 -1,118 -770 -2.6 -2.0 -2.8 -3.5 -3.1 -2.0 Source of data: SORS 2003-2006, BS; IMAD's Autumn Spring Forecast 2007. Note: a comparison of nominal values is possible under the technical assumption of the SIT/EUR exchange rate = 239.64, which has been used since 2007. EXPENDITURE STRUCTURE OF GROSS DOMESTIC PRODUCT, 2003-2006 constant previous year prices, 2007-2009 constant 2006 prices In SIT m In EUR m Real growth rates, in % GROSS DOMESTIC PRODUCT (3+4+5) 5,607,262 6,186,119 6,658,003 7,155,369 32,213 33,706 35,073 4.4 4.1 5.7 5.8 4.6 4.1 1. Exports of goods and services 3,157,565 3,653,898 4,145,398 4,788,469 23,259 25,660 28,136 12.5 10.1 12.3 13.4 10.3 9.7 2. Imports of goods and services 3,194,810 3,694,754 4,101,467 4,830,821 23,762 26,173 28,333 13.3 6.7 12.2 14.2 10.1 8.2 3. EXTERNAL BALANCE * (1-2) -37,245 -40,856 43,931 -42,352 -502 -514 -197 -0.5* 2.0* 0.0* -0.6* 0.0* 0.9* 4. FINAL CONSUMPTION 4,195,627 4,557,677 4,836,456 5,168,882 22,952 23,826 24,583 3.0 2.8 4.1 3.8 3.8 3.2 Private consumption 3,112,561 3,373,478 3,566,122 3,800,103 16,946 17,624 18,220 3.0 2.7 4.0 4.2 4.0 3.4 Government consumption (individual and collective) 1,083,066 1,184,199 1,270,334 1,368,779 6,006 6,201 6,363 3.1 3.2 4.4 2.6 3.2 2.6 5. GROSS CAPITAL FORMATION 1,448,880 1,669,298 1,777,616 2,028,838 9,763 10,394 10,687 10.5 0.4 9.9 13.1 6.5 2.8 Gross fixed capital formation 1,368,338 1,531,410 1,666,102 1,872,354 9,110 9,679 9,931 7.3 2.5 8.4 14.5 6.2 2.6 Changes in inventories and valuables* 80,542 137,887 111,514 156,484 653 714 756 0.9* -0.5* 0.6* -0.1* 0.2* 0.1* Source of data: Nominal: SORS 2003-2006, BS; IMAD's Autumn Forecast 2007. Real growth rates: SORS 2004-2006, BS; IMAD's Autumn Forecast 2007. Notes: a comparison of nominal values is possible under the technical assumption of the SIT/EUR exchange rate = 239.64, which has been used since 2007; *as contributions to real GDP growth (in percentage points). Slovenian Economic Mirror IMAD Industrial Production No. 10/2007 p. A 4 2006 2007 2006 2007 2002 2003 2004 2000 2000 QII QIII QIV QI QII 7 8 9 10 11 12 1 2 3 4 0 6 7 8 INDUSTRIAL PRODUCTION by sectors *, indices, 2000=100; 2007 data are provisional INDUSTRY, total 105.4 106.9 112.8 116.5 123.7 124.1 122.1 130.6 128.8 133.7 124.7 108.5 133.0 134.4 139.7 117.6 125.4 121.4 139.5 129.0 135.2 136.8 136.5 119.4 C Mining and quarrying 99.2 104.9 97.6 104.2 115 115.1 106.6 134.5 113.5 129.9 98.2 102.4 119.1 135.5 152.6 115.3 94.1 107.6 138.7 133.6 135.2 120.8 92.1 121.7 D Manufacturing 104.8 106.5 111.6 115.6 123.2 124.1 122.5 129.3 129.1 135.4 125.5 108.0 134.0 134.2 138.9 114.8 125.0 121.8 140.5 129.8 137.0 139.3 139.2 119.5 DA Food, beverages, tobacco 98.6 99.6 89.4 88.0 87.9 89.7 88.4 95.5 79.8 90.9 88.0 87.3 90.0 88.9 104.7 92.8 76.1 76.2 87.0 89.6 90.9 92.1 91.7 90.6 DB Textiles & textile products 80.5 71.3 61.7 54.1 52.3 49.7 54.3 47.5 56.7 51.6 60.0 44.3 58.5 51.1 50.2 41.2 55.1 52.4 62.5 52.0 49.8 53.1 54.3 40.8 DC Leather & leather products 83.6 72.7 68.2 72.7 76.5 77.8 72.1 77.7 72.8 52.3 67.0 66.5 82.9 90.3 91.1 51.6 86.0 61.0 71.5 53.2 51.2 52.4 79.6 50.3 DD Wood & wood products 94.3 91.0 94.7 100.7 104.1 109.7 104.5 108.4 111.6 124.6 109.8 88.4 115.2 114.7 119.6 91.0 97.1 110.7 127.1 120.1 129.0 124.8 122.4 103.3 DE Paper, publishing, printing 1 100.9 100.6 101.2 104.8 103.9 103.0 102.0 109.5 103.0 106.6 101.0 97.9 107.1 110.3 113.4 104.8 103.2 93.4 112.3 104.0 110.2 105.7 111.8 108.0 DF Coke, petrol. prod., nuclear fuel 2 34.2 36.3 - - - - - 20.9 22.3 18.6 - 15.8 19.9 21.1 21.6 19.9 22.8 21.2 23.0 18.8 18.4 18.6 20.2 18.8 DG Chem., prod., man-made fibers 114.5 128.0 147.5 158.7 179.4 183.3 172.1 189.3 201.1 213.9 191.6 154.4 170.4 207.4 198.6 161.9 209.4 193.6 200.4 206.8 199.2 235.8 241.5 180.7 DH Rubber & plastic products 99.8 103.6 116.5 122.2 130 126.8 136.9 135.9 135.1 141.2 134.6 124.8 151.4 145.6 149.7 112.3 127.3 125.5 152.6 131.0 146.7 146.0 145.5 137.1 DI Non-metal mineral products 100.9 101.6 84.6 78.7 83.6 88.0 90.6 89.2 78.1 92.9 91.7 85.3 94.9 96.4 98.1 73.1 71.4 72.5 90.5 85.4 97.8 95.4 96.0 87.8 DJ Basic metals & fabricated. prod. 108.3 112.0 107.8 116.3 129.8 130.5 131.5 136.6 143.9 147.2 133.0 120.0 141.5 147.6 146.1 116.1 142.7 135.4 153.6 142.5 148.3 150.7 146.4 131.1 DK Machinery & equipment nec. 128.6 120.9 138.5 140.9 149.5 147.8 144.7 161.7 163.5 165.8 153.6 121.1 159.4 162.4 173.4 149.2 154.1 154.1 182.4 161.6 167.9 168.0 162.1 139.4 DL Electrical & optical equipment 110.3 122.8 153.0 157.7 181.5 182.2 183.0 193.6 186.8 199.9 171.8 152.0 225.1 193.6 210.0 177.2 173.4 175.4 211.6 185.9 211.8 202.1 193.3 174.8 DM Transport equipment 106.4 111.7 152.7 184.7 177.7 185.6 149.4 173.3 195.2 206.4 177.0 75.4 195.8 175.0 180.3 164.6 179.6 184.6 221.5 184.4 216.5 218.4 230.9 143.2 DN Manufacturing nec. 106.3 102.6 103.4 108.7 107.5 107.9 107.8 111.1 106.5 106.6 108.3 97.5 117.7 115.0 122.2 96.0 100.0 104.6 114.9 103.6 110.8 105.4 105.9 84.2 E Electricity, gas & water supply 3 115.3 111.3 132.9 130.9 129.6 122.3 117.7 140.9 126.4 104.2 121.2 113.1 118.7 130.7 137.5 154.6 142.4 117.5 119.3 108.3 102.4 101.9 114.6 110.7 NUMBER OF PERSONS IN PAID EMPLOYMENT IN INDUSTRY 4 Total, in 1000 259.9 255.1 251.7 247.3 243.3 243.0 243.0 244.7 243.3 243.0 244.7 244.6 245.5 243.6 242.9 242.7 243.3 244.6 245.4 244.0 244.1 244.8 245.0 244.6 C Mining & quarrying 5.1 4.8 4.4 4.2 4.0 4.0 4.0 3.9 4.0 4.0 3.9 3.9 3.8 4.0 4.0 4.0 4.0 3.9 3.9 3.9 3.9 3.9 3.8 3.7 D Manufacturing 243.1 238.9 236.1 231.8 227.9 227.5 227.5 229.2 227.9 227.5 229.2 229.4 230.2 228.0 227.4 227.2 227.8 229.1 229.9 228.7 228.9 229.6 229.7 229.3 E Electricity, gas & water supply 11.7 11.4 11.3 11.4 11.4 11.4 11.5 11.5 11.4 11.4 11.5 11.3 11.5 11.5 11.5 11.5 11.5 11.5 11.5 11.4 11.3 11.3 11.4 11.5 CONSTRUCTION 5, real indices of construction put in place, indices 2000=100 Construction 97.9 105.7 108.4 111.7 128.8 120.0 149.0 169.4 128.8 120.0 169.4 104.0 157.8 143.9 140.4 132.3 174.2 188.1 163.2 157.0 88.7 98.1 125.1 173.9 Buildings 104.2 104.9 114.6 126.4 144.2 131.4 165.3 179.6 144.2 131.4 179.6 123.0 172.7 157.3 152.7 156.1 187.1 191.9 169.9 177.0 107.2 115.3 146.5 183.0 Civil engineering 92.1 106.4 102.6 98.0 114.5 109.5 133.8 160.0 114.5 109.5 160.0 91.5 148.1 131.5 128.9 110.2 162.3 184.6 157.1 138.4 76.6 86.8 111.1 168.0 Persons in paid employment in construction 4 99.4 99.1 97.5 102.0 109.6 108.6 113.1 114.3 109.6 108.6 114.3 114.1 120.3 110.5 112.2 112.9 114.2 114.9 115.2 112.7 112.9 114.4 114.8 125.2 Source of data: SORS. Notes: *From February 2004 onwards the industrial production indices have been provisional. For the period up until January 2004 they are calculated according to data on produced quantities of industrial goods. From February 2004 onwards, data on production value have been taken as the basis for the calculation. The value of production is calculated according to the following formula: turnover in the month (x) + value of stocks in the month (x) - value of stocks in the month (x-1).1Enterprises with activity of publishing are excluded; 2data not published because of confidentiality; 3only companies with activity of electricity supply are included. In January 2005, the SORS adopted a 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 Labor Force Survey. Data for previous years dating back to January 2000 have also been calculated according to the new methodology. 5The survey covers all larger construction enterprises and some other enterprises that perform construction work. Slovenian Economic Mirror IMAD Production No. 10/2007 p. A 5 2006 2007 2006 2007 2002 2003 2004 2005 2006 QII QIII QIV QI QII 8 9 10 11 12 1 2 3 4 5 6 7 8 TRANSPORT Passenger-km in transport for hire or reward, in m 1,143 1,065 980 848 850 236 180 223 209 222 46 85 79 77 66 70 62 76 69 80 73 45 43 Passenger-km in rail transport, in m 749 778 764 777 788 1 97 189 210 196 202 58 70 72 71 69 - - - - - - - - Passenger-km in air transport, in m 794 837 896 1,019 1,044 251 411 200 183 289 143 121 83 60 57 62 56 65 79 88 121 1 61 158 Tonne-km in rail transport, in m 3,078 3,274 3,466 3,402 3,373 81 5 817 942 918 913 259 269 315 321 306 - - - - - - - - Tonne-km in maritime transport, in m 28,578 28,361 37,047 52,513 49,155 11,545 12,618 11,494 10,813 13,224 3,955 3,954 4,381 2,846 4,267 4,477 2,949 3,387 4,884 3,967 4,373 4,585 3,676 Tonne-km in road transport, in m 6,609 7,040 9,007 11,033 12,112 3,413 2,778 3,020 3,103 3,292 - - - - - - - - - - - - - Urban passenger traffic, in m 103.9 98.4 100.2 97.2 94.0 24.3 14.6 27.7 26.3 23.3 3.7 6.9 9.1 9.4 9.2 8.7 8.5 9.1 8.3 7.8 7.2 4.1 3.8 Airport passengers traffic, in 000 866 922 1,047 1,228 1,339 334 488 282 251 382 171 148 116 88 79 82 78 91 1 08 123 152 1 84 181 Harbour freight transport, in 000 t 9,305 10,788 12,063 12,625 15,462 3,877 3,555 4,158 4,282 3,967 895 1,416 1,426 1,362 1,370 1,197 1,323 1,762 1,091 1,383 1,493 1,113 1,167 Transport of gas, million m3 1,007 1,098 1,097 1,136 - - - - - - - - - - - - - - - - - - - TOURISM, overnight stays, in 000 Total 7,321 7,503 7,589 7,573 7,722 1 ,81 4 3,115 1,389 1,472 1,997 1,209 749 548 407 434 472 497 502 568 619 811 1181 1259 Domestic tourists 3,300 3,327 3,226 3,173 3,233 691 1,226 620 700 786 457 271 219 197 203 177 282 242 208 239 339 483 467 Foreign tourists 4,021 4,175 4,363 4,399 4,489 1,123 1,889 769 771 1,211 753 478 329 209 231 296 215 261 359 380 472 698 792 Health resorts 2,327 2,360 2,417 2,464 2,434 573 853 484 555 627 324 255 219 83 183 175 191 189 205 196 225 277 323 Seaside 2,052 2,010 2,002 1,949 1,871 493 961 216 203 524 346 248 118 31 67 47 62 94 1 39 152 233 376 366 AGRICULTURE, slaughter in slaughterhouses, in 000 tons Cattle 40.5 43.1 40.1 37.4 37.9 9.0 8.4 11.7 8.0 8.6 2.9 2.9 3.4 4.0 4.3 2.6 2.5 2.9 3.0 2.9 2.7 2.6 2.7 Pigs 37.1 37.3 34.6 31.7 33.6 9.1 7.9 8.4 8.2 8.5 2.7 2.6 2.7 2.6 3.1 2.7 2.5 2.9 2.9 2.9 2.6 2.7 2.6 Poultry 51.4 56.0 52.0 53.4 49.2 12.0 12.3 12.5 13.9 14.3 4.2 3.8 4.2 4.1 4.1 4.6 4.1 5.2 4.6 4.7 5.0 5.2 5.1 Purchase of agricultural products, SIT bn, since 2007 in EURO m 101.6 103.3 102.4 103.7 106.7 25.6 26.1 33.4 101.3 109.7 8.9 9.3 9.6 10.5 13.3 32.2 31.1 37.9 37.5 38.4 33.8 38.3 41.8 FISHING, in tons Catches in marine waters 1459.8 1087.5 815.9 1021.6 736.7 174.5 246.0 92.7 94.3 91.4 92.7 94.3 91.4 51.8 36.1 83.4 65.3 25.8 39.6 77.8 128.7 51.1 123.4 Source of data: SORS. Balance of Payments Slovenian Economic Mirror IMAD No. 10/2007 p. A 6 2002 2003 2004 2005 2006 2006 2007 2006 2007 QII QIII QIV QI QII 7 8 9 10 11 12 1 2 3 4 5 6 7 BALANCE OF PAYMENTS, in EUR m Current account 247 -196 -720 -561 -857 91 -261 -51 2 -210 -134 -168 -32 -60 -54 -197 -261 -21 -149 -39 -94 -56 15 -57 Goods 1 -265 -543 -1,009 -1,026 -1,151 -118 -257 -570 -224 -323 -76 -116 -65 -93 -197 -281 -81 -78 -66 -128 -119 -76 -72 Exports 11,082 11,417 12,933 14,599 17,028 4,288 4,168 4,543 4,784 5,028 1,455 1,177 1,537 1,579 1,599 1,365 1,469 1,510 1,805 1,583 1,739 1,706 1,740 Imports 11,347 11,960 13,942 15,625 18,179 4,407 4,425 5,113 5,008 5,351 1,530 1,293 1,602 1,672 1,796 1,645 1,550 1,588 1,870 1,711 1,859 1,782 1,812 Services 620 540 688 849 866 269 299 160 233 388 74 115 109 85 28 46 1 08 45 80 99 149 1 40 112 Exports 2,440 2,465 2,783 3,143 3,449 850 1,072 855 855 1,105 360 386 326 292 267 295 307 243 305 349 380 377 446 Imports 1,820 1,925 2,095 2,294 2,584 580 773 695 623 717 285 271 217 207 239 249 1 99 198 225 250 231 237 334 Income -168 -219 -322 -288 -398 -54 -227 -100 -144 -155 -147 -10 -69 -48 -13 -38 -42 -49 -53 -51 -51 -54 -59 Receipts 490 510 530 648 902 232 241 242 217 271 75 78 88 77 72 94 71 70 75 89 92 91 90 Expenditure 657 728 852 936 1,300 286 468 342 361 427 223 88 157 1 25 85 132 114 119 128 139 143 1 44 149 Current transfers 60 26 -76 -97 -173 -6 -75 -2 -74 -44 -19 -21 -35 2 -15 11 -6 -68 0 -15 -34 5 -38 Receipts 500 474 561 738 785 224 165 237 197 227 61 56 48 85 59 93 51 59 86 75 60 91 57 Expenditure 439 449 638 835 958 230 240 238 271 271 80 77 83 83 74 82 57 127 86 89 95 87 95 Capital and financial account 3 46 698 818 1,050 94 504 424 611 662 294 40 170 -1 07 23 508 -179 385 404 218 42 402 324 Capital account -164 -165 -96 -1 14 -131 -3 -39 -96 22 -12 -4 -6 -29 -7 -12 -77 12 20 -10 10 -8 -1 4 0 Financial account 167 211 794 932 1,182 96 543 51 9 589 674 297 46 199 -1 00 35 584 -191 366 414 207 51 416 323 Direct investment 1,556 -151 224 -43 -207 -71 136 -154 -95 -9 145 -47 38 -48 -194 88 -87 -70 62 -17 -75 83 -112 Domestic abroad -166 -421 -441 -516 -718 -201 -164 -21 8 -307 -234 -23 -48 -93 -54 -168 4 -103 -148 -56 -113 -101 -20 -140 Foreign in Slovenia 1,722 270 665 473 512 131 300 64 211 225 168 1 131 6 -26 84 16 77 118 96 27 1 03 27 Portfolio investment -69 -223 -637 -1,466 -1,444 -179 -336 -677 -626 -1,198 -76 -271 11 -65 -183 -429 -905 -151 430 -416 -620 -162 233 Financial derivatives 0 0 6 -10 -13 -1 0 -3 2 2 -2 -6 1 2 -3 2 4 5 -4 1 0 0 -2 -6 Other investment 565 849 945 2,639 1,564 60 63 954 1,253 1,894 -176 110 129 84 324 545 61 0 715 -72 585 811 498 77 Assets -538 -730 -1,308 -1,459 -1,936 -934 -384 -264 -2,234 -18 37 -27 -393 83 -23 -324 -751 -741 -742 -671 582 71 -382 Commercial credits -135 -116 -237 -226 -435 -186 -77 120 -386 -175 -35 77 -119 -90 -57 267 -28 -161 -197 -75 -11 -89 25 Loans -174 -223 -281 -340 -733 -190 -87 -297 -351 -435 -44 28 -71 -50 -75 -172 -1 8 -75 -258 -45 -203 -187 -209 Currency and deposits -157 -323 -720 -872 -747 -546 -194 -90 -1,521 580 118 -126 -187 219 103 -412 -773 -499 -248 -547 793 334 -187 Other assets -71 -68 -69 -21 -21 -1 2 -26 3 23 12 -3 -7 -16 4 6 -7 68 -6 -39 -3 3 13 -11 Liabilities 1,104 1,579 2,252 4,098 3,500 994 446 1 ,21 8 3,488 1,912 -213 137 522 1 348 869 1,362 1,455 671 1,256 229 427 459 Commercial credits 95 59 214 291 468 133 63 282 280 33 75 -64 52 1 31 117 34 -161 212 229 -36 80 -1 1 44 Loans 838 1,123 1,671 2,731 2,064 872 357 467 15 1,548 -42 148 252 -43 299 210 1 42 -54 -72 1,021 294 232 221 Deposits 130 428 335 1,053 998 1 39 448 3,208 338 -243 61 221 -82 -69 599 1 ,406 1,282 521 279 -140 1 99 188 Other liabilities 39 -31 33 23 -30 -13 -12 21 -16 -7 -2 -7 -2 -5 1 26 -25 16 -6 -9 -5 6 7 International reserves 2 -1,885 -264 256 -1 89 1,281 295 684 394 55 -11 409 254 20 -68 86 376 1 85 -123 -7 55 -65 -1 132 Statistical error -250 150 22 -257 -194 -185 -243 88 -401 -528 -126 -8 -110 1 61 174 -246 200 -236 -365 -123 13 -41 8 -267 EXPORTS AND IMPORTS BY END-USE OF PRODUCTS, in EUR m Export of investment goods 1,542 1,634 1,873 2,058 2,492 61 5 622 705 N/A N/A 222 168 231 224 245 236 N/A N/A N/A N/A N/A N/A N/A Intermediate goods 5,245 5,463 6,342 6,990 8,429 2,139 2,094 2,203 N/A N/A 720 604 770 772 810 621 N/A N/A N/A N/A N/A N/A N/A Consumer goods 4,175 4,188 4,568 5,349 5,840 1,453 1,366 1,589 N/A N/A 485 367 515 560 532 497 N/A N/A N/A N/A N/A N/A N/A Import of investment goods 2,072 2,322 2,494 2,624 3,076 723 746 978 N/A N/A 245 204 297 276 344 358 N/A N/A N/A N/A N/A N/A N/A Intermediate goods 6,816 7,079 8,348 9,534 11,064 2,713 2,738 2,981 N/A N/A 972 800 966 1,010 1,072 900 N/A N/A N/A N/A N/A N/A N/A Consumer goods 2,686 2,838 3,301 3,646 4,172 1 ,01 1 986 1,183 N/A N/A 320 289 376 399 409 375 N/A N/A N/A N/A N/A N/A N/A Sources of data: BS, SORS. Notes: Exports and imports (F.O.B.) include also the adjustment for exports and imports of goods by ITRS and duty-free shops reports; 2 reserve assets of the BS. Monetary Indicators Slovenian Economic Mirror IMAD No. 10/2007 p. A 7 2005 2006 2006 2007 December 5 1 6 1 7 1 8 1 9 1 10 1 11 1 12 1|2|3|4|5|6|7|8 MONETARY SYSTEM - CONSOLIDATED BALANCE SHEET OF MONETARY FINANCIAL INSTITUTIONS, end of the month, in SIT bn; since 1 January 2007 in EUR m Banknotes and coins 217.3 152.8 216.5 220.7 212.1 210.3 213.1 214.0 197.6 172.8 2,709 2,684 2,689 2,721 2,737 2,769 2,801 2,787 Overnight deposits at other MFI 1,491.0 1,694.1 1,571.7 1,598.7 1,595.6 1,594.9 1,605.7 1,590.4 1,608.0 1,694.6 6,902 6,866 6,867 6,887 7,056 7,194 7,257 7,134 Overnight deposits of NFI at the BS 3.1 5.0 4.9 3.6 3.6 5.7 4.8 6.0 4.5 5.0 47 37 36 37 40 41 50 57 Overnight deposits of other government sector (central government excluded) at the BS 3.3 1.3 2.1 1.8 2.2 2.1 2.1 1.9 1.9 1.3 6 7 5 5 6 7 8 10 Total overnight deposits at the BS 6.4 6.4 7.0 5.3 5.9 7.8 6.9 7.9 6.4 6.4 53 43 41 43 47 48 58 67 Deposits with agreed maturity at the BS 0.3 0.0 0.7 0.5 0.5 - - - - - - - - - - - - - Deposits with agreed maturity at other MFI 1,688.0 1,747.3 1,688.4 1,678.2 1,710.8 1,692.2 1,735.0 1,728.8 1,744.1 1,746.4 7,379 7,441 7,607 7,514 7,578 7,694 7,967 8,209 Deposits at redeemable notice 164.9 197.5 168.8 179.8 166.0 171.5 182.7 184.6 188.4 197.5 962 918 985 991 1,087 1,133 1,171 1,224 Debt securities, units/shares of money market funds and repos 9.5 9.2 9.1 6.7 7.0 7.7 7.3 7.5 7.9 8.1 29 32 46 52 52 61 62 66 Banknotes and coins and demand deposits 1,713.9 1,853.3 1,795.3 1,824.8 1,813.5 1,812.9 1,825.7 1,812.3 1,812.0 1,873.7 9,664 9,593 9,597 9,650 9,840 10,011 10,116 9,989 Banknotes and coins and deposits with maturity of up to two years 3,524.6 3,798.1 3,653.2 3,683.3 3,690.7 3,676.6 3,743.4 3,725.6 3,744.5 3,817.6 18,005 17,952 18,189 18,156 18,506 18,838 19,254 19,421 Banknotes and coins and instruments with maturity of up to two years 3,534.2 3,807.2 3,662.3 3,690.0 3,697.7 3,684.2 3,750.7 3,733.1 3,752.4 3,825.8 18,035 17,984 18,235 18,208 18,557 18,899 19,316 19,487 SELECTED CLAIMS OF OTHER MFI ON DOMESTIC SECTORS, end of the month, in SIT bn; since 1 January 2007 in EUR m Claims of the BS on central government 17.6 16.6 16.9 16.9 16.9 16.8 16.9 16.8 16.8 16.6 69 69 69 68 68 68 68 68 Central government (S. 1311) 780.5 776.6 777.2 774.9 774.5 777.8 782.2 792.5 787.7 776.6 3,184 3,219 2,944 2,748 2,574 2,465 2,408 2,342 Other government (S. 1312, 1313, 1314) 17.8 24.9 23.4 23.2 23.4 20.6 20.4 21.5 21.8 24.9 108 106 107 105 107 107 107 110 Households (S. 14, 15) 976.0 1,289.8 1,134.9 1,157.3 1,180.4 1,203.7 1,229.2 1,252.3 1,277.6 1,289.8 5,428 5,488 5,633 5,748 5,892 6,015 6,157 6,323 Non-financial corporations (S. 11) 2,620.9 3,245.5 2,910.3 2,951.5 2,988.9 3,025.0 3,096.8 3,157.9 3,214.5 3,245.5 14,086 14,250 14,660 15,142 15,426 15,788 16,274 16,720 Non-monetary financial institutions (S. 123, 124, 125) 230.9 365.6 278.1 283.0 287.5 296.5 303.5 325.7 338.3 368.3 1,554 1,563 1,574 1,761 1,747 1,911 2,034 2,083 Monetary financial institutions (S. 121, 122) 1,408.2 1,157.1 1,441.9 1,414.1 1,293.7 1,236.0 1,251.2 1,265.8 1,244.9 1,158.7 3,505 2,770 2,267 2,033 2,257 2,203 2,209 2,431 Claims on domestic sectors, TOTAL In domestic currency 2,099.2 2,307.3 2,114.1 2,149.9 2,121.8 2,136.1 2,152.6 2,200.9 2,223.7 2,264.6 21,761 21,634 21,726 22,297 23,089 23,558 24,146 24,892 In foreign currency 2,199.4 3,109.6 2,618.8 2,716.2 2,748.5 2,814.9 2,894.6 2,992.1 3,048.8 3,109.6 1,048 1,100 1,160 1 ,248 1,335 1,456 1,560 1,638 Securities, total 1,791.0 1,442.6 1,837.0 1,741.8 1,682.7 1,612.7 1,638.9 1,627.3 1,617.7 1,449.5 5,055 4,662 4,299 3,992 3,577 3,475 3,483 3,479 SELECTED OBLIGATIONS OF OTHER MFI ON DOMESTIC SECTORS, end of the month, in SIT bn; since 1 January 2007 in EUR m Deposits in domestic currency, total 2,608.5 2904.1 2704.9 2749.2 2752.1 2773.4 2846.7 2886.7 2892.4 2902.9 17823 17912 17914 18066 18367 18446 18880 19299 Overnight 987.0 1178.1 1032.6 1073.0 1056.9 1057.6 1067.4 1061.9 1074.0 1178.1 6645 6598 6648 6676 6849 6953 7047 6881 With agreed maturity - short-term 1,175.5 1252.9 1236.8 1225.4 1257.0 1270.0 1323.3 1361.3 1353.8 1251.2 7673 7837 7639 7758 7777 7592 7867 8331 With agreed maturity - long-term 309.9 291.9 283.4 285.2 282.9 286.1 286.9 297.2 291.3 292.4 2486 2492 2560 2569 2573 2693 2728 2790 Short-term deposits redeemable at notice 136.0 181.2 152.1 165.6 155.3 159.8 169.1 166.3 173.3 181.2 1019 985 1067 1 063 1168 1208 1238 1297 Deposits in foreign currency, total 1,349.9 1454.0 1417.4 1432.4 1424.9 1420.9 1433.9 1424.7 1449.2 1454.7 634 614 607 597 615 610 605 628 Overnight 395.6 552.7 559.0 556.9 559.1 565.0 562.8 555.7 576.3 552.7 311 293 285 264 280 274 270 278 With agreed maturity - short-term 623.7 544.7 522.4 533.6 521.4 506.3 517.6 514.9 519.0 545.5 240 239 237 251 248 249 242 258 With agreed maturity - long-term 295.2 318.5 302.6 307.8 311.1 316.1 319.2 316.9 318.3 318.5 64 64 62 60 61 60 61 62 Short-term deposits redeemable at notice 35.4 38.0 33.4 34.1 33.3 33.6 34.3 37.3 35.7 38.0 19 18 23 22 26 27 32 30 Source of data: Bank of Slovenia. Slovenian Economic Mirror IMAD Prices No. 10/2007 p. A 8 2006 2007 2006 2007 Indices, 2005 = 100 2002 2003 2004 2005 2006 QII QIII QIV QI QII 9 10 11 12 1 2 3 4 5 6 7 8 9 GROWTH IN SELECTED PRICE INDICATORS CPI 89.2 94.2 97.6 100.0 102.5 103.2 103.2 103.1 105.8 106.9 103.6 102.8 103.1 103.6 102.9 102.7 103.8 104.9 106.1 106.5 106.6 106.9 107.3 Food, non-alcoholic beverages 95.9 100.3 100.8 100.0 102.3 102.3 103.1 105.3 108.7 110.7 102.7 101.9 103.4 104.0 105.7 104.7 105.5 107.5 109.3 109.2 109.5 109.7 113.0 Alcoholic beverages, tobacco 80.8 91.0 96.3 100.0 103.7 105.2 106.2 107.1 108.0 113.6 105.2 106.3 106.1 106.2 106.9 107.0 107.4 107.6 108.1 108.2 113.9 114.0 113.1 Clothing and footwear 93.5 99.3 101.0 100.0 99.5 94.0 105.5 95.4 105.7 97.1 99.2 104.9 106.2 105.5 92.9 93.3 100.1 103.4 106.8 107.0 95.0 94.2 102.3 Housing, water, electricity, gas 80.2 85.4 91.7 100.0 105.3 107.0 103.8 104.2 107.1 109.3 107.6 103.3 103.8 104.2 103.6 103.9 105.1 106.7 107.0 107.7 108.5 110.3 109.1 Furnishings, household equip. 90.1 94.3 96.5 100.0 104.1 105.2 106.2 107.0 108.3 109.0 106.0 106.1 106.1 106.4 106.9 106.7 107.5 108.0 108.2 108.8 108.8 109.1 109.1 Medical, pharmaceutical products 93.4 98.8 100.3 100.0 98.3 98.0 98.3 99.9 99.9 99.1 97.9 98.0 98.2 98.7 99.2 99.7 100.8 100.0 99.7 99.9 100.0 98.7 98.7 Transport 88.0 92.1 97.4 100.0 101.3 103.0 100.3 99.7 102.6 102.1 103.0 100.3 100.1 100.6 99.8 99.3 100.1 101.6 102.9 103.2 102.9 102.2 101.1 Communications 98.5 99.8 100.0 100.0 100.3 100.4 101.5 100.0 99.6 100.9 102.2 102.2 101.1 101.1 101.5 99.3 99.2 99.3 99.7 99.7 100.6 100.8 101.5 Recreation and culture 89.8 94.2 97.7 100.0 102.1 105.8 101.1 102.5 104.3 110.6 103.3 100.6 100.9 101.8 102.3 102.9 102.3 102.0 104.4 106.4 111.0 113.0 107.9 Education 83.5 87.1 93.4 100.0 103.1 103.5 102.9 103.1 104.7 105.7 102.1 102.9 102.9 102.9 103.0 103.1 103.0 103.0 105.6 105.6 105.6 105.6 106.0 Catering services 84.9 91.1 95.8 100.0 104.5 105.4 106.3 109.2 110.8 112.8 105.8 106.0 105.5 107.4 108.9 109.3 109.6 110.3 111.0 111.1 111.8 112.7 113.9 Miscellaneous goods & services 88.8 94.5 98.1 100.0 104.1 104.4 105.9 106.4 107.1 108.2 104.6 105.7 105.8 106.1 106.2 106.5 106.7 106.7 107.2 107.3 107.8 108.3 108.5 HCPI 89.1 94.2 97.6 100.0 102.5 103.2 103.3 103.4 106.2 107.0 103.7 102.9 103.2 103.7 103.1 103.0 104.1 105.3 106.5 106.8 106.7 106.9 107.4 Producer price indices (domestic market) 91.0 93.3 97.4 100.0 102.4 102.6 103.2 105.9 107.4 108.2 102.9 103.1 103.1 103.6 104.3 106.5 106.9 107.1 107.4 107.7 107.8 107.7 108.9 Intermediate goods 89.6 91.4 96.9 100.0 103.5 104.2 104.7 109.1 111.7 112.6 104.7 104.4 104.5 105.3 106.1 110.4 110.7 111.3 111.8 112.1 112.3 112.1 113.5 Capital goods 94.8 94.7 97.0 100.0 100.2 100.5 100.8 101.2 101.1 101.5 100.9 100.9 100.7 100.9 101.4 101.0 101.3 101.4 101.0 100.9 101.6 101.4 101.6 Consumption goods 91.8 95.3 98.1 100.0 101.5 101.2 102.1 103.1 103.6 104.2 101.2 102.1 101.9 102.3 102.8 103.0 103.4 103.2 103.5 104.0 103.8 103.8 105.1 PRICE CONTROL1 Energy prices 81.1 83.3 89.4 100.0 108.0 111.9 105.9 102.6 109.5 110.1 112.6 106.2 105.5 105.9 103.6 100.4 103.7 107.5 110.3 110.7 111.8 109.8 108.5 Oil products 78.9 80.2 86.7 100.0 110.3 116.3 105.7 101.4 110.9 111.3 117.0 106.5 105.1 105.6 102.9 98.4 103.0 107.5 112.3 112.9 113.5 111.0 109.3 Electricity for households 90.4 93.8 98.6 100.0 101.6 102.0 102.7 101.7 107.1 - 102.7 102.7 102.7 102.7 101.9 101.0 102.4 107.1 107.1 107.1 - - - Basic utilities 83.4 88.6 96.2 100.0 97.4 100.9 87.8 93.8 94.7 97.2 100.9 83.3 89.3 90.7 92.5 94.4 94.4 94.7 94.7 94.7 94.7 101.7 95.2 Transport & communications 91.5 95.2 97.9 100.0 101.5 101.6 101.6 101.9 102.2 102.2 101.6 101.6 101.6 101.6 101.7 101.8 102.2 102.2 102.2 102.2 102.2 102.2 102.2 Other controlled prices 86.0 89.8 95.7 100.0 102.6 103.2 103.3 104.9 104.9 106.3 103.2 103.2 103.3 103.3 104.2 105.1 105.3 105.3 104.7 104.7 105.5 107.1 106.4 Direct control - total 82.5 85.5 91.5 100.0 107.0 110.2 106.9 105.6 110.8 112.0 113.3 106.5 106.9 107.3 106.0 104.1 106.6 109.4 111.3 111.7 112.6 112.7 110.7 Source of data: SORS, calculations and estimates IMAD. Note: 1 the structure of groups varies, data published are not directly comparable to those published previously. The electricity market was liberalized on 1 July 2007. Data from July 2007 onwards are not comparable. Interest Rates and Investment Slovenian Economic Mirror IMAD No. 10/2007 p. A 9 End year 2006 2007 2002 I 2003 I 2004 | 2005 | 2006 8 1 9 1 10 1 11 1 12 1|2|3|4|5|6|7|8|9 INTEREST RATES OF MONETARY FINANCIAL INSTITUTIONS, % New deposits in domestic currency Households Overnight deposits - - - 0.47 0.32 0.30 0.28 0.27 0.28 0.27 0.33 0.33 0.33 0.34 0.34 0.34 0.35 0.35 - Time deposits with maturity of up to one year - - - 3.34 2.96 2.81 2.82 2.80 2.81 2.84 2.83 2.91 3.01 3.07 3.15 3.26 3.36 3.41 New loans to households in domestic currency Housing loans 1-5 year fixed interest rate - - 4.18 4.99 4.56 4.57 4.60 4.42 5.19 4.29 5.16 5.44 5.50 5.35 5.37 5.36 5.79 5.98 - New loans to non-financial corporations in domestic currency Loan over EUR 1 million 1-5 year fixed interest rate - 8.58 5.36 5.23 4.64 4.47 3.61 4.66 5.04 5.11 5.49 6.53 - - 4.86 5.12 6.49 - - INTEREST RATES OF THE EUROPEAN CENTRAL BANK, % Main refinancing operations | 3.21 2.25 2.00 2.02 2.78 3.00 3.00 3.25 3.25 3.50 3.50 3.50 3.75 3.75 3.75 4.00 4.00 4.00 - INVESTMENT, outlays, in SIT m, since 2007 thousand EURO Total 524,626 610,923 760,662 772,675 824,957 56,808 62,610 58,911 86,544 147,057 283,943 287,486 252,076 387,674 377,167 375,300 483,585 460,832 362,648 Industry total 114,794 136,349 184,271 181,466 164,226 9,218 11,634 12,008 16,069 22,452 54,811 66,902 68,461 62,123 71,435 60,840 81,370 81,419 93,484 Energy sector 36,959 31,538 39,105 38,701 36,856 2,119 3,460 2,294 4,832 7,335 11,771 26,320 12,892 9,072 9,797 14,671 13,194 13,996 29,763 Manufacturing 77,835 104,811 145,163 142,765 127,370 7,099 8,174 9,714 11,237 15,117 43,040 40,582 55,568 53,051 61,639 46,169 68,176 67,423 63,721 Construction* 8,937 11,350 21,470 129,609 170,369 15,119 14,507 13,065 14,565 43,112 97,608 68,472 -120,858 13,463 44,591 34,762 11,816 4,168 16,039 Transport and communications* 58,244 39,779 54,720 63,689 57,978 5,076 7,245 3,401 9,931 4,165 11,029 32,975 194,924 142,273 120,681 86,677 211,395 185,566 60,813 Trade 66,950 67,852 80,272 93,793 82,460 6,325 4,527 6,229 4,926 6,846 16,599 12,242 25,851 34,770 29,893 32,765 36,881 34,166 45,906 Hotels and restaurants 9,144 14,665 14,206 15,641 12,356 1,319 816 439 722 1,483 7,841 5,197 7,092 5,981 2,300 13,813 10,544 3,008 6,131 Financial and technical services 40,339 48,049 52,291 48,192 47,530 4,199 2,560 3,805 4,297 4,655 11,926 22,401 9,369 14,409 20,320 14,473 27,755 20,885 10,422 Other 226,220 292,876 353,432 240,285 290,038 15,552 21,321 19,964 36,034 64,344 84,129 79,297 67,236 114,655 87,946 131,970 103,824 131,620 129,853 In economic infrastructure, total1 162,078 177,777 223,096 180,751 197,802 16,649 16,725 13,348 19,366 49,344 89,490 105,197 64,170 57,115 68,286 76,713 202,593 107,145 76,037 Energy sector 36,959 46,562 46,469 42,212 36,857 2,119 3,460 2,294 4,832 7,335 11,771 26,320 12,892 9,072 9,797 14,671 13,194 13,996 29,763 Electricity supply 25,132 26,903 23,107 24,251 22,736 1,200 2,516 1,304 3,331 3,946 6,664 21,210 7,479 5,503 7,270 11,458 9,714 10,160 28,005 Gas supply 1,380 1,282 689 678 729 80 58 26 111 117 229 242 335 107 100 268 106 485 269 Hot water supply 1,168 2,725 2,027 2,564 2,640 125 216 240 346 714 1,540 898 640 350 290 267 890 634 1,015 Cold water supply 9,280 15,652 20,645 14,720 10,752 714 670 724 1,044 2,558 3,337 3,970 4,439 3,112 2,137 2,679 2,484 2,717 474 Transport infrastructure 125,119 131,215 176,627 138,539 160,945 14,530 13,265 11,054 14,534 42,009 77,719 78,876 51,278 48,043 58,489 62,041 189,399 93,149 46,274 Railways 16,924 1,717 1 ,822 2,615 6,677 1,487 1,653 77 493 70 590 1,360 897 727 1,406 1,629 515 1,204 1,144 Air traffic 618 1,774 2,660 3,462 2,120 469 96 123 139 502 1,508 2,028 1,515 2,064 2,802 4,143 3,147 2,251 1,646 Roads, motorways 81,467 103,849 141,157 106,040 136,142 11,516 11,064 10,310 13,150 40,435 72,863 62,228 46,038 41,167 40,883 49,348 182,016 84,437 39,653 Postal and telecom services 24,573 20,923 26,717 24,143 13,609 770 372 432 399 613 1,717 1,402 1,780 2,196 6,750 5,459 2,298 1,240 1,996 Other 1 ,538 2,952 4,271 2,279 2,397 287 80 112 354 389 1,041 11,858 1,048 1,889 6,647 1,462 1,424 4,017 1,834 Sources of data: SORS, BS, AP. Notes: *a large infrastructure company has been included in the construction activity since April 2007 (change of main activity from F to I). ''Outlays collected on the basis of data for individual investors. Slovenian Economic Mirror IMAD Labour Market No. 10/2007 p. A 10 Number in thousand 2002 2003 2004 2005 2006 2006 2007 2006 2007 Q II Q III Q IV Q I Q II 8 9 10 11 12 1 2 3 4 5 6 7 8 A FORMAL LABOUR FORCE (A=B+E) 911.4 899.1 900.3 905.0 910.7 910.9 909.6 914.0 919.1 923.5 908.2 909.8 915.0 915.5 911.3 918.0 919.2 920.0 921.6 923.6 925.4 924.5 923.1 B PERSONS IN FORMAL EMPLOYMENT (C+D) 808.7 801.4 807.5 813.1 824.8 823.6 826.6 834.5 841.8 852.7 825.2 829.5 833.7 836.7 833.0 838.0 841.5 845.8 849.0 852.9 856.2 854.4 854.6 In agriculture, forestry, fishing 45.4 37.7 41.2 38.7 38.9 39.1 38.7 38.5 43.1 42.0 38.7 38.7 38.6 38.6 38.4 43.0 43.1 43.1 41.9 42.0 42.0 41.0 41.0 In industry, construction 323.3 318.4 313.9 310.9 313.3 312.2 315.1 317.6 317.4 322.2 314.7 316.2 317.9 318.9 315.9 316.2 317.8 318.3 320.5 322.3 323.9 324.3 324.4 Of which: in manufacturing 243.1 238.9 236.1 233.7 227.9 227.5 227.5 229.2 229.4 230.2 227.2 227.8 229.1 229.9 228.7 228.9 229.6 229.7 230.0 230.2 230.3 229.8 229.3 in construction 63.4 63.3 62.2 61.7 69.9 69.3 72.2 72.9 72.8 76.8 72.0 72.8 73.3 73.5 71.9 72.1 73.0 73.3 75.3 76.8 78.3 79.1 79.9 In services 440.0 445.2 452.3 463.5 472.6 472.3 472.8 478.4 481.3 488.5 471.8 474.7 477.2 479.2 478.7 478.8 480.7 484.4 486.6 488.6 490.3 489.1 489.2 Of which: in public administration 45.9 47.7 49.9 49.1 50.2 50.4 50.3 50.1 49.7 50.1 50.3 50.2 50.3 50.2 49.9 49.8 49.7 49.7 49.9 50.1 50.2 50.2 50.2 in education, health-services, social work 101.6 102.7 105.0 106.5 109.1 109.3 108.6 110.0 109.9 110.2 108.0 109.5 109.9 110.2 109.8 109.5 109.9 110.2 110.4 110.1 110.2 109.0 108.7 C FORMALLY EMPLOYED 1 721.4 722.1 724.4 731.6 741.6 740.6 743.4 750.7 753.1 764.7 742.0 746.1 750.1 752.9 749.2 749.5 752.9 757.0 761.3 764.9 768.1 767.0 767.1 In enterprises and organisations 654.6 656.0 658.7 666.2 675.1 674.2 675.9 682.6 685.8 695.0 674.7 678.2 681.6 684.3 681.7 682.8 685.6 689.0 692.4 695.1 697.5 696.2 696.1 By those self-employed 66.8 66.2 65.6 65.4 66.5 66.4 67.5 68.2 67.3 69.8 67.3 67.9 68.5 68.6 67.5 66.7 67.3 68.0 68.9 69.8 70.6 70.8 71.0 D SELF-EMPLOYED AND FARMERS 87.3 79.2 83.1 81.5 83.3 83.1 83.2 83.7 88.7 87.9 83.2 83.5 83.6 83.8 83.8 88.5 88.6 88.8 87.8 88.0 88.1 87.3 87.5 E REGISTERED UNEMPLOYMENT 102.6 97.7 92.8 91.9 85.8 87.3 83.0 79.5 77.3 70.9 83.1 80.2 81.3 78.8 78.3 80.0 77.7 74.2 72.6 70.7 69.3 70.1 68.5 Female 52.5 51.6 49.3 49.4 47.0 47.9 46.3 43.6 42.0 39.3 46.4 44.6 44.9 43.3 42.6 43.2 42.1 40.7 40.2 39.2 38.5 39.3 38.1 By age: under 26 24.7 25.5 24.3 22.2 18.2 18.9 16.4 16.0 14.0 11.6 16.6 14.8 16.8 15.8 15.2 15.1 14.2 12.8 12.2 11.5 11.1 11.1 10.4 older than 40 50.7 43.1 39.7 40.1 39.7 40.1 39.3 37.9 38.7 37.2 39.3 38.9 38.2 37.6 37.7 39.0 38.8 38.1 37.7 37.2 36.7 36.9 36.6 Unskilled 48.2 43.2 38.6 37.5 33.7 34.3 32.2 30.8 30.4 27.7 32.3 31.6 31.1 30.6 30.8 31.6 30.7 29.0 28.2 27.7 27.1 27.2 27.0 For more than 1 year 55.8 47.5 42.9 43.4 41.9 42.4 41.5 40.2 38.8 36.7 41.3 41.2 41.0 39.9 39.7 39.6 39.0 37.9 37.4 36.8 36.0 35.8 35.6 Those receiving benefits 24.4 24.3 22.3 23.3 22.7 23.6 22.4 19.4 13.0 16.8 22.7 21.7 19.9 19.4 18.9 19.9 19.1 18.3 17.2 16.9 16.3 16.3 n.p. F RATE OF REGISTERED UNEMPLOYMENT, E/A, in % 11.3 10.9 10.3 10.2 9.4 9.6 9.1 8.7 8.4 7.7 9.1 8.8 8.9 8.6 8.6 8.7 8.4 8.1 7.9 7.7 7.5 7.6 7.4 G FLOWS OF FORMAL LABOUR FORCE -2.3 -10.2 1.5 8.0 5.2 3.6 -2.5 1.6 8.7 5.4 -2.5 1.5 5.3 0.5 -4.2 6.7 1.2 0.8 1.6 2.0 1.8 -0.9 -1.4 New unemployed first job seekers 21.4 25.4 26.0 21.7 18.6 3.2 3.5 8.2 2.9 2.4 1.0 1.5 5.8 1.4 1.0 1.3 0.8 0.9 1.0 0.7 0.6 0.7 0.6 Redundancies 66.0 68.8 69.6 67.2 63.8 14.4 15.2 14.8 15.4 11.6 4.5 5.1 4.8 5.0 5.0 7.6 3.8 4.0 4.0 4.0 3.7 4.9 3.5 Registered unemployed who found employment 52.2 50.5 54.3 53.9 57.4 14.7 13.5 13.6 14.8 12.1 4.6 5.3 5.1 5.0 3.5 5.1 4.4 5.2 4.2 4.1 3.7 3.0 3.8 Other unemployed erased out of register 39.9 47.3 46.6 33.1 39.2 9.4 9.8 11.3 7.6 6.9 3.4 4.1 4.4 3.9 3.1 2.0 2.5 3.1 2.4 2.5 2.0 1.6 1.9 Change in number of work permits for foreigners 2.1 3.5 -0.5 3.9 7.8 3.3 1.6 0.3 3.9 4.9 0.8 0.3 0.4 0.1 -0.2 0.3 1.2 2.5 3.6 1.7 -0.5 2.2 1.6 Retirements 2 15.9 16.1 16.4 16.7 18.7 3.9 4.5 6.1 4.7 4.3 1.0 2.4 2.2 2.0 1.9 1.8 1.6 1.2 1.5 1.4 1.3 1.4 1.5 Deaths 2 2.6 2.6 2.5 2.3 2.5 0.6 0.6 0.6 0.6 0.6 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 Others who found employment 2 30.4 24.9 39.5 32.6 37.3 10.0 6.3 9.8 13.8 8.7 -0.2 6.0 5.4 4.5 -0.2 8.9 3.3 1.6 0.6 3.6 4.9 -0.6 0.0 H JOB VACANCIES 3 11.6 12.1 14.1 16.9 19.0 20.5 18.9 17.4 20.5 21.0 16.4 22.7 19.5 16.9 15.9 20.0 17.8 23.6 20.6 19.3 23.1 18.8 19.7 For fixed term, in % 74.4 73.8 73.7 75.6 75.3 74.9 77.6 77.5 76.7 77.5 78.5 78.7 77.9 78.0 76.4 77.1 75.1 77.5 76.9 79.1 76.6 78.4 77.1 WORK PERMITS FOR FOREIGNERS 35.3 39.7 39.7 41.6 48.3 48.1 50.0 50.9 53.4 59.3 50.2 50.5 50.9 51.0 50.7 52.2 53.4 54.7 58.3 60.1 59.5 61.7 63.3 As % of labour force (I/A) 3.9 4.4 4.4 4.6 5.3 5.3 5.5 5.6 5.8 6.4 5.5 5.5 5.6 5.6 5.6 5.7 5.8 5.9 6.3 6.5 6.4 6.7 6.9 Sources of data: SORS, PDII, ESS. Notes: 1In January 2005, the SORS adopted new methodology of obtaining data on persons in paid employment. The new source of data for employed and self-employed persons excluding farmers is the Statistical Register of Employment (SRE), while data on farmers are forecast using the ARIMA model based on quarterly figures for farmers from the Labour Force Survey. Data for previous years dating back to January 2000 have also been calculated according to the new methodology. 2Estimated by IMAD, based on data by PDII and ESS; 3according to ESS. Wages, Competitiveness, Exchange Rate Slovenian Economic Mirror IMAD No. 10/2007 p. A 11 i 2004 i 2005 i 2006 2006 2007 2006 2007 Qiii 1 Qiv Qi 1 Qii 8 1 9 1 10 1 11 1 12 1|2|3|4|5|6|7|8 GROSS WAGE PER EMPLOYEE, in SIT, since 2007 in EUR Total 264,463 277,279 290,635 286,917 309,709 1,238 1,252 290,148 287,557 293,121 333,799 302,207 1,250 1,213 1,252 1,237 1,264 1,254 1,263 1,279 Private sector (A to K) 245,498 258,714 272,709 267,438 294,601 1,168 1,178 271,571 268,015 274,204 324,626 284,972 1,182 1,137 1,184 1,164 1,192 1,179 1,180 1,211 Agriculture, fishing (A, B) 215,981 224,253 236,822 234,180 255,337 1,010 1,036 236,221 239,065 246,013 275,462 244,538 1,030 978 1,021 1,026 1,057 1,026 1,029 1,073 A Agriculture 216,252 224,225 236,681 234,330 255,564 1,010 1,036 236,385 239,263 246,477 275,255 244,960 1,030 978 1,023 1,025 1,058 1,027 1,029 1,072 B Fishing 205,207 218,670 236,027 228,286 245,222 970 1,032 229,792 231,201 225,990 283,455 226,221 1,007 984 919 1,070 1,011 1,015 1,015 1,078 Industry, construction (C to F) 229,615 243,067 256,362 252,418 275,098 1,096 1,101 258,208 251,919 259,650 302,333 263,312 1,120 1,059 1,110 1,081 1,114 1,109 1,106 1,145 C Mining and quarrying 324,410 344,670 360,110 347,764 390,549 1,504 1,547 357,349 344,675 356,344 465,162 350,142 1,516 1,488 1,508 1,487 1,580 1,572 1,518 1,549 D Manufacturing 225,806 238,985 252,162 248,069 269,029 1,086 1,086 253,828 247,080 255,616 293,054 258,417 1,113 1,046 1,099 1,069 1,094 1,095 1,091 1,132 E Electricity, gas & water supply 322,478 353,836 373,743 355,321 439,645 1,494 1,537 364,848 353,355 364,284 550,174 404,477 1,539 1,442 1,501 1,483 1,551 1,576 1,502 1,602 F Construction 214,536 224,794 238,698 239,102 253,871 1,017 1,036 243,748 241,624 245,043 271,568 245,003 1,018 996 1,038 1,011 1,066 1,031 1,050 1,071 Production services (G to I) 242,355 253,747 266,326 261,841 286,264 1,150 1,156 263,514 263,104 269,263 309,080 280,448 1,151 1,128 1,171 1,153 1,163 1,152 1,162 1,177 G Distributive trade 233,682 244,880 258,521 254,723 278,198 1,122 1,130 255,915 255,650 263,133 294,774 276,686 1,127 1,097 1,143 1,130 1,135 1,125 1,136 1,151 H Hotels & restaurants 196,458 202,895 211,873 210,678 221,166 893 922 213,505 211,520 213,344 225,866 224,287 898 873 906 905 930 931 920 945 I Transport, storage & communications 284,881 299,377 310,080 302,254 334,933 1,333 1,320 304,311 304,562 309,630 379,872 315,296 1,324 1,317 1,359 1,316 1,332 1,313 1,329 1,343 Business services (J to K) 312,967 325,355 340,552 328,901 375,481 1,437 1,472 332,310 331,351 332,557 428,155 365,729 1,448 1,412 1,450 1,452 1,504 1,461 1,458 1,486 J Financial intermediation 388,044 413,896 443,595 415,908 523,782 1,812 1,943 414,649 428,147 415,140 668,928 487,279 1,797 1,810 1,830 1,897 2,021 1,911 1,833 1,853 K Real estate 283,421 292,763 304,295 298,125 324,256 1,307 1,312 303,078 297,304 303,947 345,433 323,388 1,326 1,274 1,321 1,300 1,328 1,309 1,330 1,361 Public services (L to O) 319,911 330,580 341,999 343,246 353,578 1,445 1,469 343,977 344,037 347,973 360,551 352,211 1,449 1,433 1,452 1,454 1,474 1,478 1,510 1,486 L Public administration 322,928 333,302 343,572 346,124 351,537 1,446 1,482 345,285 348,201 351,350 353,047 350,213 1,450 1,442 1,445 1,452 1,488 1,506 1,565 1,512 M Education 325,463 340,967 357,301 362,784 368,215 1,521 1,545 363,395 363,969 365,467 370,135 369,042 1,516 1,518 1,530 1,533 1,550 1,550 1,571 1,556 N Health & social work 310,990 316,827 325,245 323,843 336,103 1,367 1,393 325,081 322,920 329,682 341,294 337,332 1,387 1,344 1,369 1,386 1,401 1,392 1,423 1,401 O Other social & personal services 316,566 325,159 332,137 324,566 356,170 1,402 1,394 328,908 324,162 330,619 395,357 342,534 1,395 1,368 1,441 1,389 1,393 1,399 1,399 1,415 INDICATORS OF OVERALL COMPETITIVENESS, 2001=100 Foreign exchange rates Effective exchange rate1, nominal 94.6 94.0 94.1 94.4 94.3 94.4 94.8 94.3 94.4 94.2 94.2 94.4 94.3 94.5 94.5 94.7 94.8 94.9 95.0 94.8 Real (relative consumer prices) 105.2 104.9 105.6 106.2 106.0 105.6 107.8 106.1 106.7 105.7 106.0 106.3 105.6 105.3 106 106.9 1 08 108.3 108.4 108.5 Real (relative producer prices)2 103.1 102.5 101.6 101.2 102.5 103.4 103.2 100.7 101.9 102.3 102.3 102.9 103.4 103.5 103.4 103.1 103.2 103.4 103.2 103.2 SIT/US$ 192.4 192.7 191.0 188.0 185.9 - - 187.1 188.1 190.0 186.2 181.4 - - - - - - - - SIT/EUR 238.9 239.6 239.6 239.6 239.6 - - 239.6 239.6 239.6 239.6 239.6 - - - - - - - - US$/EUR 1.2433 1 .2448 1.2557 1.2741 1 .2902 1.3105 1.3482 1.2811 1.2727 1.2611 1.2881 1.3213 1.2999 1.3074 1.3242 1.3516 1.351 1 1.3419 1.3716 1.3622 Sources of data: SORS, AP, BS, OECD Main Economic Indicators, calculations IMAD. Notes: Data on the monthly gross wage per employee for 2004 and beyond calculated according to the new methodology were published in September 2005. 1Change of methodology: the calculation of domestic currency's effective exchange rate includes the currencies/prices of Slovenia's 17 trading partners (Austria, Belgium, Germany, Italy, France, Netherlands, Spain, Denmark, United Kingdom, Sweden, Czech Republic, Hungary, Poland, Slovakia, USA, Switzerland, Japan); weights are the shares of individual trading partners in Slovenian exports and imports of goods within manufacturing (5-8 SITC) in 2001-2003; exports are double weighted; a rise in the index value indicates an appreciation of domestic currency and vice versa. 2Producer prices in manufacturing activities. Slovenian Economic Mirror IMAD Public Finance No. 10/2007 p. A 12 Current nrices in SIT million. ____ ____ ___ ____ 2006 2007 2006 2007 since 2007 in EURO thousand 2003 2004 2005 2006 QIII QIV QI QII 11 12 1 2 3 4 5 6 7 CONSOLIDATED GENERAL GOVERNMENT REVENUES (GFS-IMF methodology) TOTAL REVENUES 2,477,425 2,683,055 2,869,949 3,105,421 729,600 874,009 3,065,753 3,456,344 287,812 309,710 1,062,258 959,563 1,043,932 1,292,864 1,172,663 990,818 1,183,162 Current revenues 2,440,298 2,609,053 2,759,987 2,970,410 706,346 816,169 2,955,037 3,374,889 265,390 291,337 1,034,423 926,165 994,448 1,272,601 1,157,964 944,323 1,159,906 Tax revenues 2,291,071 2,446,899 2,608,230 2,818,643 665,880 768,117 2,828,698 3,199,681 252,118 272,749 994,506 883,169 951,023 1,218,988 1,094,220 886,473 1,089,818 Taxes on income and profit 460,520 506,878 537,260 655,486 134,797 154,693 587,733 914,251 49,212 63,610 188,151 189,870 209,713 462,894 288,258 163,099 168,660 Social security contributions 839,216 899,400 955,611 1,013,970 250,117 272,872 1,083,374 1,123,694 86,391 102,001 358,356 360,464 364,554 371,109 371,851 380,733 379,179 Taxes on payroll and workforce 107,424 117,676 126,097 113,334 27,376 32,279 96,050 99,669 9,804 13,249 32,835 32,096 31,119 32,767 32,408 34,495 34,122 Taxes on property 34,419 39,513 40,834 45,322 15,126 13,585 22,183 57,958 7,140 3,043 6,207 7,914 8,063 10,750 27,215 19,993 20,758 Domestic taxes on goods and services 814,577 856,610 938,118 977,082 235,012 290,547 1,017,613 973,023 97,968 89,279 403,169 286,860 327,584 332,537 363,303 277,183 475,447 Taxes on international trade & transactions 34,653 19,339 9,360 12,145 2,653 3,866 21,478 30,663 1,528 1,444 5,460 6,313 9,706 8,879 11,034 10,749 11,547 Other taxes 261 7,484 950 1,304 799 275 266 422 76 125 329 -347 284 51 151 221 105 Non-tax revenues 149,227 162,154 151,756 151,767 40,465 48,051 126,339 175,208 13,272 18,588 39,918 42,996 43,425 53,613 63,743 57,851 70,088 Capital revenues 15,857 20,751 27,181 39,971 10,175 15,465 19,670 14,923 6,163 4,651 7,455 6,113 6,103 5,885 4,099 4,939 13,518 Grants 13,384 1,877 2,173 1,287 356 409 2,103 2,831 1 77 171 713 402 988 726 683 1,422 584 Transferred revenues 7,887 7,536 8,140 10,259 117 9,985 1,835 4,151 9,483 476 1,727 31 77 265 1,251 2,635 1,098 Receipts from the EU budget - 43,838 72,469 83,494 12,607 31,981 87,109 59,551 6,599 13,076 17,940 26,852 42,317 13,387 8,666 37,499 8,056 CONSOLIDATED GENERAL GOVERNMENT EXPENDITURE (GFS-IMF methodology) TOTAL EXPENDITURE 2,555,894 2,768,427 2,941,756 3,165,327 721,094 925,862 3,202,748 3,394,538 285,225 375,015 985,192 1,108,814 1,108,741 1,061,851 1,242,632 1,090,055 1,094,954 Current expenditure 1,225,523 1,234,113 1,283,018 1,363,301 308,809 367,663 1,481,934 1,448,317 117,158 135,482 489,168 473,213 519,554 506,381 506,401 435,536 450,934 Wages, salaries and other personnel expenditure 662,776 700,349 722,822 762,128 188,138 196,382 785,849 851,711 64,797 67,969 262,124 262,111 261,613 261,814 321,894 268,003 266,715 Expenditure on goods and services 451,440 429,861 457,942 496,830 111,986 150,253 490,266 482,385 46,338 62,028 192,055 145,993 152,217 155,082 169,373 157,930 174,747 Interest payments 92,661 91,933 89,180 90,199 5,439 15,910 197,547 105,283 5,011 2,574 32,429 62,374 102,745 87,080 12,021 6,182 6,768 Reserves 18,646 11,969 13,074 14,145 3,246 5,117 8,272 8,939 1,012 2,909 2,559 2,735 2,978 2,406 3,112 3,421 2,705 Current transfers 1,097,369 1,249,909 1,341,641 1,420,064 332,290 372,882 1,457,082 1,664,458 122,357 139,573 434,832 507,916 514,335 468,021 639,050 557,387 525,266 Subsidies 69,470 77,571 91,362 96,556 13,742 31,540 104,411 137,926 6,475 19,918 6,748 54,844 42,819 10,003 39,748 88,175 57,278 Current transfers to individuals and households 986,100 1,053,417 1,109,197 1,167,404 280,259 294,149 1,219,043 1,359,171 102,296 98,919 388,090 415,487 415,466 409,207 537,720 412,245 406,397 Current transfers to non-profit institut., other current domestic transfers 36,722 113,675 134,930 149,548 35,971 45,707 130,723 157,182 12,909 20,214 39,679 35,484 55,560 48,253 54,243 54,686 57,583 Current transfers abroad 5,077 5,247 6,154 6,556 2,319 1,485 2,905 10,178 676 521 315 2,101 489 558 7,340 2,281 4,008 Capital expenditure 142,131 151,305 156,784 216,016 42,704 117,094 133,353 162,495 26,348 70,967 44,660 46,280 42,413 46,704 55,577 60,214 71,714 Capital transfers 90,871 92,464 91,874 96,956 19,384 52,703 30,424 58,715 15,861 23,184 8,203 9,460 12,761 16,636 19,962 22,117 23,303 Payments to the EU budget - 40,637 68,438 68,990 17,907 15,520 99,954 60,553 3,501 5,810 8,330 71,946 19,679 24,109 21,642 14,802 23,737 SURPLUS / DEFICIT -78,469 -85,372 -71,807 -59,906 - - - - - - - - - - - - - Source of data: MF Bulletin. Note: in line with the changed methodology of the International Monetary Fund of 2001, social security contributions paid by the state are not consolidated. Main Indicators Slovenian Economic Mirror IMAD No. 10/2007 p. A 13 Real growth rates, in % 2001 2002 2007 2008 2003 2004 2009 200b Autumn Forecast 2007 GDP 3.1 3.7 2.8 4.4 4.1 5.7 5.8 4.6 GDP per capita, in EUR 11,298 12,084 12,695 13,400 14,116 15,167 16,532 17,888 GDP per capita, PPS1 15,300 16,300 16,700 18,000 18,900 20,400 - - Standardised rate of unemployment (ILO) 6.4 6.4 6.7 6.3 6.5 6.0 5.0 4.9 Labour productivity (GDP per employee) 2.6 3.7 3.2 4.1 4.0 4.5 3.4 3.7 Inflation2, annual average 8.4 7.5 5.6 3.6 2.5 2.5 3.4 3.5 INTERNATIONAL TRADE - BALANCE OF PAYMENTS STATISTICS Exports of goods and services3 6.4 6.8 3.1 12.5 10.1 12.3 13.4 10.3 Exports of goods 7.0 6.4 4.4 12.8 10.3 13.4 13.1 10.6 Exports of services 3.5 8.2 -2.5 11.0 9.5 7.3 15.0 9.1 Imports of goods and services3 3.1 4.9 6.7 13.3 6.7 12.2 14.2 10.1 Imports of goods 3.2 4.4 7.3 14.6 6.8 12.7 14.3 10.1 Imports of services 2.2 8.4 2.9 5.6 5.6 8.9 13.1 10.0 Current account balance, in EUR million 38 247 -196 -720 -561 -857 -1,165 -1,118 Average exchange rate, SIT/EUR 217.2 226.2 233.7 238.9 239.6 239.6 - - Foreign exchange reserves, in EUR million 6,514 7,842 7,703 7,484 8,833 8,005 6794 - Gross external debt, in EUR million 10,386 11,524 13,225 15,343 19,614 23,895 29,8925 - DOMESTIC DEMAND - NATIONAL ACCOUNTS STATISTICS (share in GDP in %) Private consumption 56.2 55.2 55.3 54.3 54.0 53.4 52.8 52.5 Government consumption 19.7 19.5 19.4 19.2 19.4 19.2 18.8 18.9 Gross fixed capital formation 24.9 23.4 24.1 25.4 25.5 26.1 28.2 28.2 Sources of data: SORS, BS, MF, calculations, estimates and forecasts by the IMAD - Autumn Forecast 2007. Notes: 1Eurostat; 2the consumer price index; 3balance of payments statistics (exports F.O.B., imports F.O.B.), changes in exchange rates and prices in foreign markets are eliminated by calculating real rates; 4end August. From 1 January 2007 foreign exchange reserves of the Bank of Slovenia include foreign cash in convertible currencies, deposits abroad, and first class securities of issuers from outside the Euro area in foreign currency. The drop in data values is the result of Slovenia's entry to the Economic and Monetary Union; 5end June. International Comparisons / I Slovenian Economic Mirror IMAD No. 10/2007 p. A 14 Real GDP growth GDP per capita in PPS1 EU27=100 Inflation2 (annual average) 2003 2004 2005 2006 2003 2004 2005 2006 2003 2004 2005 2006 Slovenia 2.8 4.4 4.1 5.7 81.0 83.4 84.7 86.7 5.7 3.7 2.5 2.5 EU27 1.3 2.5 1.8 3.0 100.0 100.0 100.0 100.0 2.1 2.3 2.3 2.3 EU25 1.3 2.4 1.8 3.0 104.4 104.2 104.1 103.9 1.9 2.1 2.2 2.2 EMU 0.8 2.0 1.5 2.8 112.1 111.1 111.0 110.3 2.1 2.1 2.2 2.2 Belgium 1.0 3.0 1.1 3.2 123.5 124.4 123.0 122.3 1.5 1.9 2.5 2.3 Bulgaria 5.0 6.6 6.2 6.1 32.6 33.6 35.2 37.1 2.3 6.1 6.0 7.4 Czech Republic 3.6 4.5 6.4 6.4 73.8 76.2 77.2 79.4 -0.1 2.6 1.6 2.1 Denmark 0.4 2.1 3.1 3.5 124.7 124.5 126.3 126.7 2.0 0.9 1.7 1.9 Germany -0.2 1.1 0.8 2.9 117.1 116.1 114.6 113.7 1.0 1.8 1.9 1.8 Estonia 7.2 8.3 10.2 11.2 54.6 57.0 62.8 67.9 1.4 3.0 4.1 4.4 Greece 4.8 4.7 3.7 4.3 83.9 84.9 87.0 88.4 3.4 3.0 3.5 3.3 Spain 3.1 3.3 3.6 3.9 101.5 100.9 102.6 102.4 3.1 3.1 3.4 3.6 France 1.1 2.5 1.7 2.0 112.3 112.1 114.2 112.8 2.2 2.3 1.9 1.9 Ireland 4.3 4.4 6.0 5.7 140.7 141.5 143.7 143.8 4.0 2.3 2.2 2.7 Italy 0.0 1.2 0.1 1.9 111.2 107.6 105.4 103.7 2.8 2.3 2.2 2.2 Cyprus 1.8 4.2 3.9 3.8 89.1 91.3 93.6 93.2 4.0 1.9 2.0 2.2 Latvia 7.2 8.7 10.6 11.9 43.5 45.5 50.2 55.8 2.9 6.2 6.9 6.6 Lithuania 10.3 7.3 7.9 7.7 49.2 51.1 53.7 57.8 -1.1 1.2 2.7 3.8 Luxembourg 2.1 4.9 5.0 6.1 247.6 251.3 261.9 278.3 2.5 3.2 3.8 3.0 Hungary 4.2 4.8 4.1 3.9 63.6 63.9 64.8 65.3 4.7 6.8 3.5 4.0 Malta -0.3 0.1 3.1 3.2 78.7 75.9 76.0 75.5 1.9 2.7 2.5 2.6 Netherlands 0.3 2.2 1.5 3.0 130.0 130.3 131.9 132.2 2.2 1.4 1.5 1.7 Austria 1.2 2.3 2.0 3.3 129.1 128.8 128.6 128.8 1.3 2.0 2.1 1.7 Poland 3.9 5.3 3.6 6.1 49.1 50.8 51.0 53.0 0.7 3.6 2.2 1.3 Portugal -0.7 1.5 0.5 1.3 77.0 75.2 75.4 74.5 3.3 2.5 2.1 3.0 Romania 5.2 8.5 4.1 7.7 31.5 33.6 34.4 37.7 15.3 11.9 9.1 6.6 Slovakia 4.2 5.4 6.0 8.3 55.3 56.7 59.8 62.7 8.4 7.5 2.8 4.3 Finland 1.8 3.7 2.9 5.0 113.5 115.9 114.5 116.4 1.3 0.1 0.8 1.3 Sweden 1.7 4.1 2.9 4.2 120.5 120.4 119.1 120.3 2.3 1.0 0.8 1.5 United Kingdom 2.8 3.3 1.8 2.8 120.1 121.8 119.6 118.9 1.4 1.3 2.1 2.3 USA 2.5 3.6 3.1 2.9 152.4 153.5 155.4 154.6 2.1 2.9 3.2 3.2 Sources of data: SORS; Eurostat. Notes: 1PPS - Purchasing Power Standard. 2 Harmonised Index of Consumer Prices for EU countries and Consumer Price Index for the USA. International Comparisons / II Slovenian Economic Mirror IMAD No. 10/2007 p. A 15 Survey Unemployment Rate Current account balance1, % GDP General Government Balance, % GDP General Government Gross Debt, % GDP 2003 2004 2005 2006 2003 2004 2005 2006* 2003 2004 2005 2006 2003 2004 2005 2006 Slovenia 6.7 6.3 6.5 6.0 -0.8 -2.7 -2.0 -2.7 -2.7 -2.3 -1.5 -1.2 27.9 27.6 27.4 27.1 EU27 9.0 9.0 8.7 7.9 0.1 0.2 -0.5 -0.7 -3.1 -2.8 -2.4 -1.6 61.8 62.1 62.7 61.4 EU25 9.0 9.0 8.7 7.9 0.0 -0.1 -0.6 n.p. -3.1 -2.8 -2.4 -1.7 62.1 62.5 63.3 62.2 EMU 8.7 8.8 8.6 7.9 0.4 0.7 -0.1 -0.1 -3.1 -2.8 -2.5 -1.5 69.1 69.6 70.3 68.6 Belgium 8.2 8.4 8.4 8.2 4.1 3.5 2.5 2.3 0.0 0.0 -2.3 0.4 98.6 94.2 92.2 88.2 Bulgaria 13.7 12.0 10.1 9.0 -8.5 -5.8 -11.8 -15.8 0.0 2.2 2.0 3.2 45.9 37.9 29.2 22.8 Czech Republic 7.8 8.3 7.9 7.1 -6.2 -6.1 -2.1 -4.1 -6.6 -3.0 -3.5 -2.9 30.1 30.4 30.2 30.1 Denmark 5.4 5.5 4.8 3.9 3.4 2.4 2.9 2.5 -0.1 1.9 4.6 4.6 45.8 44.0 36.3 30.3 Germany 9.0 9.5 9.4 8.4 1.9 3.7 4.1 4.7 -4.0 -3.8 -3.4 -1.6 63.8 65.6 67.8 67.5 Estonia 10.0 9.7 7.9 5.9 -11.6 -12.5 -10.5 -14.2 1.8 1.8 1.9 3.6 5.5 5.1 4.4 4.0 Greece 4.7 4.5 4.3 4.4 -7.1 -6.2 -7.7 -11.4 -5.6 -7.3 -5.1 -2.5 97.9 98.6 98.0 95.3 Spain 9.7 10.5 9.8 8.9 -3.5 -5.3 -7.4 -8.5 -0.2 -0.3 1.0 1.8 48.7 46.2 43.0 39.7 France 11.1 10.6 9.2 8.5 0.4 -0.3 -1.6 -2.0 -4.1 -3.6 -2.9 -2.5 62.9 64.9 66.7 64.2 Ireland 9.5 9.6 9.7 9.5 0.0 -0.6 -2.6 -3.3 0.4 1.3 1.2 2.9 31.1 29.5 27.4 25.1 Italy 8.4 8.0 7.7 6.8 -1.3 -0.9 -1.6 -2.0 -3.5 -3.5 -4.2 -4.4 104.3 103.8 106.2 106.8 Cyprus 4.1 4.6 5.2 4.6 -2.3 -5.0 -5.6 -5.9 -6.5 -4.1 -2.4 -1.2 68.9 70.2 69.1 65.2 Latvia 10.5 10.4 8.9 6.8 -8.2 -13.0 -12.7 -21.1 -1.6 -1.0 -0.4 -0.3 1 4.4 14.5 12.5 10.6 Lithuania 12.4 11.4 8.3 5.6 -6.8 -7.7 -7.2 -10.7 -1.3 -1.5 -0.5 -0.6 21.2 19.4 18.6 18.2 Luxembourg 3.7 5.1 4.5 4.7 7.5 11.8 11.8 8.6 0.5 -1.2 -0.1 0.7 6.3 6.4 6.2 6.6 Hungary 5.9 6.1 7.2 7.5 -8.0 -8.4 -6.8 -5.9 -7.2 -6.5 -7.8 -9.2 58.0 59.4 61.6 65.6 Malta 7.6 7.4 7.3 7.3 -4.7 -8.0 -10.5 -6.3 -9.9 -4.9 -3.1 -2.5 69.3 72.7 70.8 64.7 Netherlands 3.7 4.6 4.7 3.9 5.5 8.5 7.7 9.9 -3.1 -1.7 -0.3 0.6 52.0 52.4 52.3 47.9 Austria 4.3 4.8 5.2 4.7 -0.2 0.5 1.3 3.7 -1.6 -1.2 -1.6 -1.4 64.6 63.8 63.4 61.7 Poland 19.6 19.0 17.7 13.8 -2.1 -4.2 -1.7 -2.3 -6.3 -5.7 -4.3 -3.8 47.1 45.7 47.1 47.6 Portugal 6.3 6.7 7.6 7.7 -5.9 -7.2 -9.2 -9.8 -2.9 -3.4 -6.1 -3.9 56.9 58.3 63.7 64.8 Romania 7.0 8.1 7.2 7.3 -5.5 -8.4 -8.7 -10.3 -1.5 -1.5 -1.4 -1.9 21.5 18.8 15.8 12.4 Slovakia 17.6 18.2 16.3 13.4 -0.9 -3.4 -8.5 -7.7 -2.7 -2.4 -2.8 -3.7 42.4 41.4 34.2 30.4 Finland 9.0 8.8 8.4 7.7 6.4 7.8 4.9 5.9 2.5 2.3 2.7 3.8 44.3 44.1 41.4 39.2 Sweden 5.6 6.3 7.4 7.1 7.3 6.8 6.2 7.0 -0.9 0.8 2.4 2.5 53.5 52.4 52.2 47.0 United Kingdom 4.9 4.7 4.8 5.3 -1.3 -1.7 -2.2 -3.4 -3.3 -3.4 -3.3 -2.7 38.7 40.4 42.1 43.2 USA 6.0 5.5 5.1 4.6 -4.8 -5.7 -6.4 -6.1 -4.8 -4.4 -3.6 -2.6 59.4 60.4 60.9 60.2 Sources of data: SORS; Eurostat. Notes: 1EU25 and euro area aggregates are adjusted for reporting errors concerning intra-EU trade; N/A - data not available. *European Commission Spring Forecasts. Graphs Slovenian Economic Mirror IMAD No.10/2007 p. A 16 INDUSTRY indices: average 2000=100 trend indices by the TRAMO-SEATS method V V 1 * • ORIGINAL INDICES-TREND INDICES FREIGHT TRANSPORT BY ROAD AND RAIL (mio tonne km) 2004 QII QIII QIV 2005 QII QIII QIV 2006 QII QIII QIV 2007 QII QI QI QI QI GOODS TRADE FOB, EXCL. INTERCURRENCY CHANGES 12-month cummulatives in EUR, bn : BALANCE (right) REAL INDICES OF CONSTRUCTION PUT IN PLACE indices: average 2000=100; trend indices by the TRAMO-SEATS method -CONSTRUCTION -BUILDINGS CIVIL ENGINEERING OVERNIGHT STAYS TOTAL indices: average 1992=100; trend indices by the TRAMO-SEATS method EMPLOYMENT AND UNEMPLOYMENT -EMPLOYMENT, indices 2000=100 -UNEMPLOYMENT RATE (right axis) 200 180 160 140 120 100 95 80 0 15.0 21 4 19 3 13.0 17 2 11.0 15 13 0 96 9.0 11 92 7.0 9 Graphs Slovenian Economic Mirror IMAD No.10/2007 p. A 17 NET WAGES AND OTHER REMUNERATION, in EUR million PAYMENTS FOR INVESTMENT in EUR million, constant 2000 prices TOCi ~ > OI-- -Q it o a o