Slovenian economic mirror october 2008, No. 10. Vol. XIV Slovenian Economic Mirror ISSN 1318-3826 No. 10 / Vol. XIV / 2008 Publisher: IMAD, Ljubljana, Gregorčičeva 27 Director: Boštjan Vasle Editor in Chief: Jure Brložnik This issue was prepared by: Matevž Hribernik (International Environment); Jože Markič, Katarina Ivas, Janez Kušar, Jure Povšnar, Barbara Ferk, Tina Nenadič (Economic Developments in Slovenia); Tomaž Kraigher, Saša Kovačič, Ana T. Selan (Labour Market); Miha Trošt, Slavica Jurančič (Prices); Marjan Hafner (Financial Markets); Jože Markič (Balance of Payments); Jasna Kondža, Barbara Knapič Navarrete (Public Finance); Mojca Vendramin (Municipal Waste); Mateja Kovač (Agriculture - Production) Translator: Marija Kavčič Language Editor: Amidas Data Preparation and Graphs: Bibijana Cirman Naglič, Marjeta Žigman Concept and Design: Katja Korinšek, Pristop DTP: Ema Bertina Kopitar Print: Tiskarna Solos Circulation: 500 copies The contents of this publication may be reproduced in whole or in part provided that the source is acknowledged. Contents In the Spotlight 3 Current Economic Trends 5 International Environment 7 Economic Developments in Slovenia 10 Labour Market 16 Financial Markets 24 Public Finance 27 Selected Topics 33 Municipal Waste 35 Agricultre - Production 36 Statistical Appendix 39 Slovenian Economic Mirror, October 2008 3 In the Spotlight In the Spotlight The autumn forecasts by international institutions are much more pessimistic than the spring forecasts largely due to the consequences of the financial crisis. The IMF and EC predict stagnation of economic growth in the euro area for next year. The EC even envisages a recession for the U.S. The forecasts of economic growth in Slovenia's main trading partners for 2008 do not diverge from IMAD's autumn forecasts, but the forecasts for the coming year are significantly lower, mainly as a result of the financial crisis, which has deepened since September. At the same time inflationary pressures are slowing due to a decline in commodity prices and slower economic activity. Inflation forecasts are thus also lower than in the spring. The slowdown of inflation has already enabled central banks to cut their key interest rates; the ECB key interest rate thus totals 3.75% and the Fed interest rate 1.0%. In numerous European countries, governments and central banks joined efforts to stem the crisis and offset its consequences, largely through measures aimed at reviving financial markets. Some of the most vulnerable countries were also granted loans by the IMF in recent weeks. The consequences of the financial crisis had already affected conditions on the Slovenian financial market before the crisis deepened in September. Data for the period to August indicate that the conditions of financing domestic non-banking sector debt tightened notably with the rise in lending interest rates, which resulted in an accelerated slowdown of lending activity. Growth of bank loans to domestic non-banking sectors declined in August for the seventh month in a row. The decline was larger for corporate loans (to 25.5%) and somewhat smaller for household loans (to 20.2%). Given the aggravated access to refinancing on foreign markets, banks are becoming increasingly dependent on household savings. Owing to a smaller volume and less favourable maturity of household savings compared with foreign resources in the past, banks are adjusting their interest rate policies. The financial crisis has also affected the dynamics on the Ljubljana Stock Exchange, where in September the main index posted its largest monthly drop in ten years and the volatility also increased. Given the moderation of GDP growth in the international environment, economic activity is also slowing in Slovenia. Merchandise trade growth is decelerating. Due to a significant drop in August, growth of merchandise exports (4.8%) was notably weaker than import growth (11.0%) in the first eight months of this year. The volume of production in manufacturing declined for the second month in a row. In the first eight months of the year, production volume growth was thus only 1.1% stronger than in the same period last year. Data on business tendency surveys indicate a continued slowdown, given that in October the confidence indicator dropped to its lowest level since 1999. Construction activity is also slowing, though it is still relatively high. A gradual slowdown in activity has also been observed in market services. Some first signs of moderation are already visible in certain areas of the labour market, even though this has not yet been shown by the aggregate indicators. The number of persons in formal employment and the registered unemployment rate (6.5%) remained unchanged. Y-o-y employment growth in August was 3.0%. The strongest growth in the number of employees was still recorded in construction, whereas the number of persons employed in the energy sector, distributive trades, hotels and restaurants, education and manufacturing declined in August for the second month in a row. The total gross wage increase (2.4% in nominal terms) in August was the highest this year, largely due to high gross wage rises in the public sector. Due to the disbursement of the first quarter of funds to eliminate wage disparities along with payments for the difference accrued since May, the gross wage increase in the public sector totalled 8.4% in nominal terms, which is somewhat below expectations, though the final increase cannot be estimated until, in the coming months, all adjustments have been completed and possible faults removed. Wage growth in the private sector stagnated in August, which can already be indicative of the impact of moderated economic activity. The total gross wage in the first eight months of this year was thus higher by a nominal 8.5% than in the same period last year. Consumer prices remained unchanged in October for the second month in a row. Y-o-y inflation dropped for the fourth successive month and totals 4.9%. Against the background of rapidly declining oil prices, a slowdown in food prices and decelerated economic activity, y-o-y inflation is decreasing both in Slovenia and at the level of the entire euro area, where it totalled 3.2% in October. Similar to developments a few months ago when amid the rising prices of oil inflation increased much faster in Slovenia than in the entire euro area, the oil price decline now has a relatively greater impact on inflation in Slovenia than in the euro area. Due to the easing of price pressures in other groups, core inflation, which stood at 4.5% in September, is slowing as well. Slovenian Economic Mirror, October 2008 4 In the Spotlight The current account deficit continued to widen in August. In the first eight months of this year, the deficit topped EUR 1.5 bn and was mainly underpinned by the trade deficit increase. More than half of this increase came from deteriorated terms of trade. The factor income deficit and the current transfer deficit continued to widen in August. The deterioration in the current account balance is mitigated by the surplus in the services balance, which also continues to increase. Amid further favourable economic trends in the first half of the year, growth of general government revenue and expenditure was stronger than in the same period last year. General government revenue growth in the first seven months of this year (13.0%) was more than twice as high as in the same period last year; growth of general government expenditure was higher as well (8.0%). By the end of September, payments into the EU budget reached 72% of planned funds and receipts from the EU budget around 30% of the amount envisaged by the supplementary budget for 2008. Data for the previous years indicate that receipts vary between months. On the basis of the available data, we can therefore draw no conclusions as to the realisation at the end of the year. Current Economic Trends 7 Slovenian Economic Mirror, October 2008 Current Economic Trends International environment AfterourAutumnForecastwasfinalised,forecasts of economic growth were revised downward again, largely due to the financial crisis, which deepened and assumed broader dimensions. In October, the IMF made a downward revision to its global forecast of GDP growth relative to July, by 0.2 p.p., to 3.9% for this year and, by 0.9 p.p., to 3.0% for the coming year. The IMF thus predicts 1.3% growth in the euro area in 2008 and only 0.2% growth in 2009; the EC forecasts for both years are lower by a further 0.1 p.p. Both the IMF and EC forecasts for economic growth in Slovenia's main trading partners are lower compared with IMAD's assumptions, particularly for next year. The slowdown in economic activity, which was further aggravated by the onset of the financial crisis last year, is increasingly also seen in the euro countries. According to Eurostat, economic growth in the euro area was -0.2% in Q2 relative to Q1, while y-o-y economic growth declined by 0.3 p.p. in Q2, to 1.4% (by 0.1 p.p., to 1.7%, in the EU-27). The slowdown is attributable to developments in the international environment and to domestic factors, resulting in a q-o-q decline in private consumption and investment in construction; the contribution of foreign trade was smaller as well. The expected further moderation of euro area growth is also corroborated by the decline in industrial production, which fell for the fourth successive month y-o-y in August, while y-o-y growth of the value of construction put in place in August was negative for the sixth month in a row. Consumer confidence and economic sentiment indicators have worsened notably in recent months. In October, the economic sentiment indicator for the euro area fell to its lowest level since 1993. In line with expectations, economic growth in the U.S. slowed significantly in Q3. Q-o-q GDP growth was 0.3% (0.8% y-o-y). The decline was largely attributable to the drop in private consumption, which hit its lowest level since 1991, and a further decline in Figure 1: Structure of economic growth in the euro area ^^■Changes in inventories Imports of goods and valuables Exports of goods ^^B Gross fixed capital formation ^^■Government mana Households -GDP (right axis) 7.5 i- 3.0 d -3.0 - -0.5 Q3 07 Q4 07 Q1 08 Q2 08 Source: Eurostat. Table 1: Real GDP growth - comparison of forecasts and IMAD's assumptions 2008 2009 2007 IMAD Sep 08 EKC Sep 08 IMF Okt 08 CONS Okt 08 EC Nov 08 IMAD Sep 08 IMF Okt 08 CONS Okt 08 EKC Nov 08 EU 2.9 1.4 1.4 1.7 1.4 1.4 1.1 0.6 0.6 0.2 EMU 2.7 1.3 1.3 1.3 1.2 1.2 1.0 0.2 0.5 0.1 DE 2.5 1.6 1.8 1.3 1.7 1.7 0.9 0.0 0.3 0.0 I 1.5 0.1 0.1 -0.1 0.0 0.0 0.5 -0.2 0.0 0.0 AT 3.1 2.2 N/A 2.0 2.1 1.9 1.8 0.8 1.4 0.6 FR 2.2 1.1 1.0 0.8 0.9 0.9 1.0 0.2 0.5 0.0 UK 3.1 1.2 1.1 1.0 1.1 0.9 0.9 -0.1 -0.2 -1.0 US 2.0 1.6 N/A 1.6 1.4 1.5 1.4 0.1 0.0 -0.5 Source: Eurostat, IMAD Autumn Forecast (September 2008), Consensus Forecasts (Oktober 2008), IMF World Economic Outlook (Oktober 2008), European Commission Interim Forecast (September 2008), European Commission Economic Forecast (November 2008). 8 Slovenian Economic Mirror, October 2008 Current Economic Trends housing investment. Growth of exports also slowed considerably relative to Q2. Given the spreading financial crisis since September and its impact on the real sector, confidence indicators continue to fall at an even faster pace. In October, the main consumer confidence indicator plunged to its lowest-ever value since it had begun to be measured four decades ago. The latest forecasts by international institutions for economic growth in 2008 are nevertheless higher than in the summer months, mainly as a consequence of quite notable GDP growth in Q2, but for the coming year, the European Commission and the IMF envisage recession in the U.S. Governments attempted to stop the spreading of the financial crisis in Europe through emergency measures. The emergency measures amounting to more than EUR 2,100 bn in the EU (roughly EUR 1,500 bn in the euro area) involve government guarantees on bank deposits, recapitalisationsand nationalisations of banks, fresh capital to increase bank liquidity and government guarantees on loans. For the latter, in the euro area France, Germany, the Netherlands, Austria, Portugal and Spain provided guarantees of around EUR 1,165 bn for the next two years. The IMF has also got actively involved in handling the financial crisis and along with the EC and World Bank provided a USD 25.1 bn loan to Hungary. The various rescue packages throughout the world amount to around EUR 3,800 bn, by our estimate. Amid the slowdown in inflation, central banks endeavoured to prevent further tightening of conditions in the financial markets by cutting their key interest rates. Consistent with the moderation of oil and other commodity prices on world markets, which had been the key driver of accelerated inflation over the last year, y-o-y inflation in the euro area dropped by 0.4 p.p. in October, to 3.2%. The EC forecasts 3.5% average inflation in the euro area for this year and 2.2% for the coming year. The slowdown in inflation enabled six central banks to cut their key interest rates by 0.5 p.p. The ECB key interest rate is now 3.75%. The Fed slashed its key interest rate by a further 0.5 p.p., to 1.0%, at the end of October, and a further cut is also expected by the ECB. By reducing their key interest rates, the central banks responded to rising interest rates on the interbank market, but the gap between interbank interest rates and the interest rates of the central banks is nevertheless still wider than the year-long average, indicating that a high level of mistrust persists. Figure 2: Dynamics of interest rates Source: ECB, FED, www.euribor.org. The exchange rate of the euro against the U.S. dollar dropped in October to its lowest level since the beginning of 2007. At the end of October, the exchange rate of the euro stood at EUR 1.2757 for USD 1, and USD 1.3362 for EUR 1, on average, for the month as a whole, 6.36% less than in October 2007. In the first ten months, the euro-to-U.S.-dollar exchange rate was 10.9% higher than in the same period last year. The depreciation of the euro against the dollar in recent months was largely due to the changes in expectations regarding future economic activity in the U.S. and in the euro area. Before the release of data on GDP growth in Q2, the U.S. was broadly expected to descend into a recession at the beginning of the year, and the data on GDP growth came as a positive surprise. The situation in the euro area was just the opposite, as until the release of data the euro area was generally expected to be able to escape a major slowdown in economic growth, a notion which changed upon the release of data on the q-o-q GDP decline. 9 Slovenian Economic Mirror, October 2008 Current Economic Trends Box 1: Primary commodity prices and inflation After last year's strongly accelerated growth of primary commodities continued in the first half of the year, commodity prices have been slowing notably on world markets since July. Alongside increased demand and relatively inelastic supply, price rises were also a result of the very low value of the American dollar and enhanced speculative activity. In the period from the beginning of last year to July 2008, the IMF's commodity price index increased by 94%, the IMF's commodity food price index by 55% and the price of Brent crude by as much as 145%. Mainly due to the spillover of the financial crisis into the real economy and consequently weakened economic activity, the demand for commodities has started to slow, which is also linked to drops in primary commodity prices over the last three months. From their record highs of around USD 145/barrel in mid-July, oil prices thus dropped by more than a half, ending up at USD 60/barrel at the end of October, while the IMF's index of food prices declined by 15% from July to September. Developments in global commodity markets crucially affected price trends in the total euro area and even more notably in Slovenia. After totalling around 0.5 p.p. y-o-y in the euro-area average and in Slovenia in July 2006, the contribution of food price rises to inflation in Slovenia started to increase in the first months of 2007, reaching its peak in February 2008 (2.2 p.p.) when it dropped somewhat and reached 1.2 p.p. in September. The contribution of food price rises to inflation in the euro area on average increased somewhat later than in Slovenia and the increase was smaller. The contribution of food prices to inflation remained at around 0.4 p.p. up until September 2007 when it started to accelerate, reaching 1 p.p. in May 2008. In September it was somewhat lower, 0.9 p.p. Amid energy price rises the impacts of oil price increases on inflation in Slovenia and in the euro area were more synchronised, but more pronounced in Slovenia due to a greater share of liquid fuels in our consumer price index. The contribution of energy price rises to inflation in Slovenia and in the euro-area average began to increase rapidly in October 2007, reaching its peak in July 2008 when it totalled 2.4 p.p. in Slovenia and 1.8 p.p. on average in the euro area. The contribution of energy price growth to inflation decreased in the last three months due to falling oil prices in that period. Y-o-y inflation in Slovenia is thus 1.6 p.p. lower. Figure 3: Commodity price dynamics and inflation ■ IMF commodity price index (left axis) ■ IMF food price index (left axis) ■ Brent crude oil prices (left axis) ■ HICP Slovenia (right axis) HICP euro area (right axis) 100 80 60 ° 40 9 >- 20 -20 10 4 ° 9 >- Figure 4: Contribution of food and energy prices to inflation in Slovenia and in the euro area ■ Slovenia-other ■ Euro area -other ■ Slovenia -energy ■ Euro area -energy Q Slovenia -food HEuro area -food Source: IMF, EIA, SORS; calculations by IMAD. Source: Eurostat; calculations by IMAD. 7 6 5 8 4 6 3 2 2 0 0 0 -2 10 Slovenian Economic Mirror, October 2008 Current Economic Trends Figure 5: Movements of the USD/EUR exchange rate 1.7 1.6 1.5 1.4 ; 1.3 ! 1.2 1.1 1.0 0.9 0.8 Source: ECB. Figure 6: Geographic distribution of merchandise exports 30 25 CL d c 20 15 « 10 Source: SORS; calculations by IM AD. 5 0 Economic developments in Slovenia Growth in merchandise trade is slowing, which is largely due to decelerated growth in merchandise exports amid the cooling of activity in the international environment. The gradual moderation of merchandise trade, particularly exports, also continued in August, when merchandise exports dropped by 8.8% y-o-y and imports increased by a mere 1.9%. Y-o-y export growth (4.8%) was thus slower than import growth (11.0%) in the first eight months of this year. According to data on the structure of exports according to the SITC for the first seven months of 2008, exports of road vehicles increased by 4.6% y-o-y relative to the same period last year and exports of all other products by 6.9%. Apart from vehicle exports, the largest contribution to total merchandise export growth came from exports of medicinal and pharmaceutical products and exports of machinery specialised for particular industries. With regard to regional structure, merchandise exports to non-EU countries rose faster than exports to EU Member States in the same period. Amid weaker growth of exports to EU Member States, Slovenia still posted high growth rates of exports to non- EU countries, particularly to the countries of former Yugoslavia (10.5% to Croatia, 8.8% to Serbia, 14.6% to Bosnia and Herzegovina, 36.6% to Macedonia and 27% to the Russian Federation). The terms of trade continued to worsen according to the data for the period to July. The terms of trade, which have been deteriorating since October 2007, worsened by 3.6% in the first seven months of this year (compared to only 1% in the same period last year). Import prices increased by 5.4% on average and export prices by 1.5%. Growth of import prices is thus maintained at the high level of 2007. The gradual slowdown in export price growth at the aggregate level may also reflect the cooling of economic activity in the euro area. The deterioration of the terms of trade is expected to moderate, given the slowdown in commodity prices over the last three months Growth in services trade remained strong in August. In the first seven months of this year, the largest contribution to strong growth in services exports came from exports of transport services (see Figure 14), largely road transport and partly also air and maritime transport services. Growth in receipts from travel and exports of other business services, 11 Slovenian Economic Mirror, October 2008 Current Economic Trends Figure 7: Dynamics of the terms of trade 94 - rvrvrvrvrvrvcocococo oooooooooo Ü Ü raj? & o g ü ra Source: SORS; calculations by IMAD. particularly merchanting, was somewhat weaker. Import growth was largely propelled by imports of various business, professional and technical services. Imports of construction and assembly services and investment works performed by foreigners declined y-o-y, which is consistent with the gradual deceleration in construction activity. Table 2: Selected monthly indicators of economic activity in Slovenia 2007 VIII 08/ VII 08 VIII 08/ VIII 07 I-VIII 08/ I-VIII 07 Export 16.9 -21.0 -4.4 7.8 -goods 16.3 -25.5 -7.9 5.3 -services 20.1 -5.1 6.9 19.1 Import 18.3 -19.2 4.1 11.9 -goods 18.1 -20.3 2.3 11.1 -services 20.1 -14.1 13.2 17.8 Industrial production 6.2 1.2* -2.5** 0.8 -manufacturing 7.5 1.7* -1.1** 1.1 Construction -value of construction put in place 18.2 -4.9 * 7.2** 20.1 Distributive trade - turnover in distributive trade and the sale and repair of motor vehicles 9.5 1.5 * 10.0** 13.3 Hotels and restauransts - turnover in hotels and restaurants 0.3 -0.6 * -5.7** -3.4 Sources: BS, SORS, calculations by IMAD. *seasonally adjusted **working-day adjusted data As in other EU Member States, the volume of production in manufacturing is also declining in Slovenia. In August, y-o-y working-day adjusted industrial production growth was negative for the second month in a row (-1.1%, and -6.0% if data are not adjusted for working days), which has not happened since the beginning of 2005. A relatively fast deceleration of production growth in manufacturing was already recorded in the first half of 2008 when the volume of production was 2.7% higher relative to the first six months of 2007 (average growth in 2007 was 7.5%). After dropping in July and August, production in the first eight months of 2008 was only 1.1% higher than in the same period last year. A further moderation of manufacturing production is also suggested by business tendency data, given that the confidence indicator in manufacturing fell to its lowest level since 1999 in October. Figure 8: Industrial production in manufacturing in the EU and Slovenia Source: SORS, Eurostat. Slower production activity was recorded in all manufacturing sub-industries. Production slowed in sub-industries which are largely dependent on domestic demand, as well as in predominantly foreign-market-oriented sub-industries, which had still posted relatively favourable growth rates until the middle of the year. On the domestic and 12 Slovenian Economic Mirror, October 2008 Current Economic Trends foreign markets, turnover growth in August was negative y-o-y, for the second month in a row (-6.9% and -9.4%, respectively). Lower production in the two most export-oriented industries, the manufacture of transport equipment and the chemical industry may also reflect weaker foreign demand. In the manufacture of transport equipment (DM), production was as much as 13.9% lower y-o-y in August (see Box 2). Significantly weaker growth was also posted in the chemical industry (DG), totalling 3% in August, but the chemical industry remains the fastest growing sub-industry in manufacturing, making the largest contribution to total growth due to its sizeable share. Production volume of the largest industry, the metal industry (DJ), was lower than in 2007 as early as in the first half of the year. Its negative contribution increased somewhat further in the last month (-10.0% y-o-y growth). Figure 9: Production in manufacturing by sub-industry 25 2.0 15 ! 1.0 & o § 05 -Q Ü 0.0 O U -05 -1.0 ■I-VI 2008/I-VI 2007 ■I-VIII 2008/I-VIII 2007 Amid decelerating production activity, productivity growth posted a significant decline and lagged behind wage growth in the first eight months of the year. In the first eight months of 2008, real productivity growth in manufacturing (1.0%) already lagged notably behind real growth of wages (5%, deflated by the PPI from the aspect of cost competitiveness), which signifies that the burden of labour costs on value added may be higher this year. Entrepreneurs' perceptions of the competitive position of their companies are also worsening. According to the quarterly data on business tendency in manufacturing, the competitive position deteriorated significantly again in October. Figure 10: Perception of competitive position in manufacturing 15 10 -§ 5 •ä -5 -4= -10 -15 -20 -25 aaaaaaaa Source: SORS; calculations by IMAD. DJ DG DL DK DE DA DH DM DN DI DD DB DC Source: SORS; calculations by IMAD. Note: arranged by the size of weights, see the list of acronyms. 0 13 Slovenian Economic Mirror, October 2008 Current Economic Trends Box 2: Significance of the manufacture and exports of vehicles for production and export activity In the last two years, the manufacture of transport equipment and vehicle exports were marked by fluctuations of monthly y-o-y growth rates, which are related to base effects and to a great extent a consequence of the investment cycle in the car industry. Due to their notable share particularly in merchandise exports in Slovenia, vehicles are important for understanding current economic activity and expectations of future trends. Growth in the manufacture of motor vehicles has been accelerating significantly since May 2007. Due to its strong export orientation, the manufacture of motor vehicles has made a substantial contribution to export growth. Average growth in the manufacture of motor vehicles (DM34)1 was still negative in the first four months of last year, while in the period from May to December, the volume of production was already more than 30% higher than in the comparable period of 2006 and capacity utilisation topped 95%. Similar trends also continued in the first four months of this year (20% y-o-y production volume growth). Despite its relatively small share in manufacturing, the car industry thus made a large contribution to total growth in the period when production activity growth in manufacturing was already starting to slow. Due to a somewhat smaller volume of production relative to the same period last year, the car industry has recorded slightly negative average growth since May 2008. Similar developments as in manufacturing were also recorded in road vehicle exports,2 where vehicle export growth was 19.7% in the first four months of 2007 (contributing 16% to total merchandise export growth), and 45.5% in the period from May to the end of the year (40% contribution). Growth of road vehicle exports moderated (13.5% y-o-y) in the first four months of this year, but it nevertheless still accounted for a good fifth of total merchandise Figure 11: Contribution of production and exports of vehicles to production and export activity 12 10 QOther manufacturing activities ■ Manufacture of motor vehicles, trailers and semi-trailers ■ Other exports (right axis) ■ Exports of road vehicles (right axis) Jan.-April 2007 May-Dec. Jan.-April 2007 2008 May-Aug.* 2008 24 20 16 12 -4 Source: SORS; calculations by IMAD. Note: *Export data by July 2008. Figure 12:Road vehicle exports and new registrations by main trading partner 28 24 20 16 12 o & -12 -16 -20 I Growth of road vehicle exports I-VII 08 Growth of new car registrations I-IX 08 Share in total road vehicle exports France Germany Italy Austria Source: SORS; calculations by IMAD. 8 6 8 4 4 8 0 4 2 4 8 0 0 -2 1 The manufacture of transport equipment (DM) is divided into the manufacture of motor vehicles, trailers and semi-trailers (DM 34) and production of other transport equipment (DM 35). This outline only aims at describing the situation in the first sub-industry of the car industry, i.e. the manufacture of motor vehicles (DM 34); it must be pointed out, however, that the car industry is closely intertwined with other industries. Reduced output in this industry thus has a negative impact on suppliers from the metal industry, the manufacture of electrical and optical equipment, and also the textile industry. 2 In the last five years, Slovenia's largest manufacturer of road vehicles sold 94% of its output on foreign markets (6.8% of Slovenia's average total merchandise exports). 14 Slovenian Economic Mirror, October 2008 Current Economic Trends export growth, while in the three months since May 2008, the volume of vehicle exports was lower relative to the same period last year and contributed -0.9 p.p. to total average merchandise export growth, which amounted to 4.2%. Given the strong export orientation of the manufacture of motor vehicles, the slowdown in the manufacture and exports of motor vehicles can be expected to continue in the coming months due to weaker demand in the main trading partners where Slovenia exports most of the vehicles. The manufacture of motor vehicles, trailers and semitrailers (DM 34) is the most export-oriented industry of Slovenia's manufacturing, with more than 85% of turnover generated on foreign markets. The most recent business tendency survey data indicate significantly lower expectations about total demand for car industry products. Exports to France, Germany, Italy and Austria account for more than 60% of Slovenia's total road vehicle exports. In the first seven months of this year, vehicle exports to France and Germany increased relative to the same period of 2007 (by 17.3% and 14.8%, respectively), while vehicle exports to Italy and Austria declined (by 16.1% and 4.7%, respectively). In these four countries, new car registrations were only lower in Italy in the first nine months of 2007 relative to the same period last year, while in the other three countries growth was still positive, albeit weak. Judging from the significant decline in consumer sentiment indicators in these countries and the indicator of the right time for major purchases over the next 12 months, it can be concluded that growth in car sales is set to slow further in the coming months. Construction activity was still strong at the beginning of the second half of the year, but its growth is slowing. According to seasonally adjusted data, the value of construction put in place dropped in August to its lowest value this year. The value of construction is otherwise still notably higher than in the same period last year, but growth is slowing. The value of construction increased by 22.8% y-o-y in the first half of the year, and by 13.8% on average in July and August. The slowdown is particularly intense in non-residential construction where in July and August the value of construction put in place was already lower than in the same period last year (by 9.0%). Growth also slowed in civil-engineering construction, from 25.0% in the first half of the year to 18.9% in the last two months. In contrast, growth in residential construction, which was already high, increased again, from 63.8% to 86.7%.3 Data on new contracts and issued building permits indicate that the slowdown is set to continue. According to the construction statistics, the value of the stock of contracts was 4.6% higher in August relative to the same month last year, which is the lowest growth in the last two and a half years. In Q1 the value of new contracts was more than half higher than in the same period last year, while in the period from April to August it was already as much as 13.7% lower, on 3 In interpreting data on the value of residential construction, we should bear in mind that these figures exclude the activity of smaller enterprises where, by our estimate, the main activity is construction of buildings, which increases the unreliability of data. average, than in the same period last year. The preliminary data on issued building permits also indicate a slowdown of activity. In the first half of the year, the total planned floor area of all buildings was 25% smaller than in the same period last year; the area of residential buildings declined by 24.0%, and the area of non-residential buildings by 28.0%. Figure 13: Value of construction put in place • Construction ■ Non-residential buildings ■ Civil engineering ■ Residential buildings Source: SORS. 125 100 0 Slovenian Economic Mirror, October 2008 15 Current Economic Trends Strong growth in road freight transport moderated somewhat in Q2, but remained high. Growth in road freight transport generating a quarter of the value added in transport, storage and communications slowed slightly in Q2, but recorded strong 26.1% total growth in the first half of the year. Growth in international road transport, accounting for 80% of total road freight transport, was twice as high as that of inland road freight transport, which can be linked to growth in highly export-oriented manufacturing industries, which was still strong in the first half of the year (11%) and only slowed down in July and August. Even though the growth of road freight traffic is expected to moderate in the second half of the year, the slowdown may not be commensurate with the decline in manufacturing activity, as our carriers are taking advantage of Slovenia's favourable position at the crossing of pan-European corridors V and X and are also allowed to perform cabotage and cross-trade transport under similar conditions as carriers from the old EU Member States. This prediction is supported by data on exports of road transport services which, even though their growth has been slowing from the beginning of the year, nevertheless increased by a respective 29.9% and 17.5% in July and August y-o-y. Figure 14: International transport (in tonne-km) and exports of transport services in road transport (EUR) 50 10 -10 — Exports of road transport services (EUR) ^—International transport (tonne km) CN m m vo r^ oo o o o o o o o 5 5 5 5 5 5 5 Sources: SORS, BS; calculations by IMAD. Electricity output is increasing and electricity consumption dropping notably this year. Slovenia is therefore expected to post net exports of electricity again after two years. In the first nine months of 2008, electricity output was on average 6.2% higher than in the same period last year. Its growth may even accelerate by the end of the year, since due to the base effect, production in the nuclear power plant will be higher y-o-y, given that no regular overhaul in this plant is foreseen this year. Electricity consumption decreased by 4.2% in this period, partly due to the restructuring of large consumers in the metal industry, but also as a consequence of slower economic activity. Electricity consumption by direct users from the transmission network declined, by as much as a good quarter. According to ELES data, around two thirds of this reduction came from the transition to more energy-efficient aluminium production in Talum, and more than a half was due to the bankruptcy of Metalurgija Ruše. Energy consumption by other users supplied with electricity from the distribution network increased by 1.4% y-o-y in the first nine months of 2008, but was decreasing by an average of 1.8% per month y-o-y in the period from May to August, and increased again by 3.3% in September. Total electricity consumption, which was also dropping notably y-o-y in the period from May to August (by 6.9%, on average), decreased by 2.7% in September, consistent with the industrial production decline over the last few months. In the first nine months of 2008, electricity exports increased by 28.0% y-o-y, and imports recorded only a 3.8% rise. Slovenia thus recorded a large surplus of 1.091 GWh, more than twice as high as net imports for 2007 as a whole. The net imports were thus 2.8 times higher than projected in the national electricity balance for 2008 (EEB) and accounted for a good 10% of production. While the high surpluses recorded in Slovenia this year are mainly linked to increased electricity output and in recent months also to lower consumption, electricity surpluses in some EU Member States, which have also been reflected in falling market prices since July, largely result from slower economic activity. Electricity futures prices for base-load consumption in 2009 on the European Energy Exchange in Leipzig have been declining since midyear, having dropped from EUR 90/ MWh at the beginning of July to below EUR 70/MWh at the end of October. 0 -20 -30 16 Slovenian Economic Mirror, October 2008 Current Economic Trends Figure 15: Production, consumption and net imports of electricity ooooooooo Source: ELES; calculations by IMAD. According to the data on turnover in retail trade, relatively high growth rates of household consumption have been maintained, but consumer optimism is on the decline. Particularly due to the amended wage system in the public sector, the growth of the net wage bill strengthened somewhat in September (by a real 6.7% y-o-y) while in the first eight months of 2008 it was 4.5% relative to the same period last year. Turnover in retail trade (5.9%) suggests that consumption increased relative to last year (4.9%), but the structure of consumption is slowly changing. Growth of new car registrations, the number of which dropped in August and September to the lowest levels recorded this year, is slowing. Moreover, consumers think that they will spend less money for major purchases over the next 12 months than they did at the same time last year, which suggests a slowdown of consumption at the end of the year. Labour market According to the available current indicators, the gradual slowdown of economic activity is also reflected in individual market services. Real turnover in hotels and restaurants, which was rising at a slower pace than last year during the first half of 2008, dropped in August for the third month in a row, most notably again in accommodation and related services. The number of overnight stays, which is an important driver of development in hotels and restaurants, was, in the first eight months of the year, only 2.8% higher than in the same period of 2007. The y-o-y growth rate increased slightly in August (to 3.2%), but is still considerably below the level recorded last year (7.0%, on average, for the year as a whole). Real growth of turnover in retail trade at the aggregate level remains relatively high this year, with a slight tendency to slow in sectors which are more dependent on the economic environment. Growth rates of turnover in the sales of motor vehicles and automotive fuels, furniture, household appliances and construction material, which were relatively high over the last two years, are decreasing, but remain relatively high. On the other hand, the growth of turnover in the sale of food, which had been falling in real terms in the past, is increasing. Some first signs of moderation are already visible on the labour market along with the slowing economic activity, though this is not yet evidenced by the main indicators. Due to the holiday season, the number of persons in formal employment remained almost unchanged in August, as did the registered unemployment rate (6.5%). In the first eight months of the year, the number of persons in formal employment remained 3.2% higher than in the same period last year. Compared to July, the largest increase was still recorded in the number of workers employed in construction (0.4%), albeit much smaller than in the previous months. The number of employed persons continued to decline in agriculture, fishing and mining. For the second consecutive month, the number of persons in employment also decreased in manufacturing, in the energy sector, distributive trades, hotels and restaurants and education. In August, the number of persons employed in manufacturing was 0.4% lower than in August 2007, falling y-o-y for the third month in a row. Given that the slowdown in economic activity is reflected in the labour market with a delay and that manufacturing industries are among those most sensitive to market conditions, the slowdown in the labour market may be even more pronounced in the coming months than what we are beginning 17 Slovenian Economic Mirror, October 2008 Current Economic Trends to face now. This is also suggested by data on business tendencies in manufacturing regarding expected employment, which recorded a notable decline in October. Figure 16: Gains in the number of employees by activity 12 10 5 4 ■ Aug. 08/Dec. 07 Jm—. o CT « a ^ Î5 s I & _Q tp D u Q- > Source: ESS; calculations by IMAD. The number of work permits for foreigners increased again in August and was almost a third higher, compared with December last year. Y-o-y growth of work permits strengthened further in the three months from June to August. The number of work permits totalled 86,668 in August, accounting for a tenth of all persons in formal employment in Slovenia. Within that, approximately one half of these employees work in construction, according to June 2008 data, a good eighth in manufacturing and distributive trades, respectively, and 7% in business services. The number of registered unemployed fell again in September. The decline was mainly due to increased outflows for reasons other than employment, among them also due to the seasonally increased enrolment of around 700 unemployed persons in educational programmes. Other unemployment flows are also still within the usual seasonal limits. In all, 6,050 persons registered as unemployed, within that 4,516 because they lost work (6.7% more than in September 2007); 4,482 unemployed persons found work (1.3% more than in September 2007). As in the first two quarters, inflows into unemployment in Q3 2008 were lower than in the same period of 2007, and so were outflows. About 20% fewer first-job seekers registered as unemployed than in Q3 2007, and 10% fewer persons who lost work. Around 16% fewer unemployed persons were deleted from the unemployment registers because they found work and around 17% for other reasons. After the seasonal decline in the summer, the number of job vacancies and persons hired rebounded in September. In Q3 2008, the total number of persons hired was 10.4% and in the first nine months 5.2% higher than in the same period last year. The share of new jobs for people with lower education increased relative to the first three quarters last year, while the share of new jobs for people with secondary and tertiary education decreased. Table 3: Labour market indicators 2007 VIII 08/ VII 08 VIII 08/ VIII 07 I-VIII 08/ I-VIII 07 Labour force 1.6 -0.2 1.9 1.9 Persons in formal employment 3.5 0.0 3.0 3.2 - Employed in in enterprises and organisations and by those self-employed 3.3 0.0 3.1 3.4 Registered unemployed -16.9 -1.4 -11.5 -13.0 Average nominal gross wage 5.9 2.4 9.8 8.5 -private sector 6.9 -0.1 7.2 8.8 -public sector 4.1 8.4 16.6 8.1 2007 VIII 07 VII 08 VIII 08 Rate of registered unemployment, v % 8.4 7.4 6.5 6.5 Average nominal gross wage (in EUR) 1,284.79 1,279.40 1,372.46 1,405.00 Private sector 1,217.14 1,210.50 1,298.64 1,297.89 Public sector 1,485.09 1,485.11 1,596.66 1,731.02 Sources: ESS, SORS, calculations by IMAD. August's growth in the gross wage per employee was the strongest this year, albeit weaker than expected. It increased by 2.4% in nominal terms; real growth totalled 3.0%, owing to deflation posted in August. The increase was mainly a result of gross wage growth in the public sector, which rose by 8.4% (9.0% in real terms). In the private sector, gross wage 8 6 2 0 -2 18 Slovenian Economic Mirror, October 2008 Current Economic Trends growth stagnated and remained at the level of the previous month, recording only a slight real increase (0.5%). In the first eight months of this year, the total gross wage increased by a nominal 8.5% relative to the same period last year, and by a real 1.8%, given 6.6% inflation. The private sector recorded stronger wage growth than the public sector, though in August, gross wage growth in the public sector approached that in the private sector. The gap between wage rises in the public sector and the private sector thus narrowed in the first eight months of the year. Figure 17: Nominal gross wage per employee 15 2 12 9 >- Total Private sector (A-K) Public sector (L-O) Source: SORS; calculations by IMAD. Strong growth of the gross wage in the public sector is a result of the disbursement of wages according to the new wage system, as this month the first quarter of funds to eliminate wage disparities was paid along with payments for the difference accrued since May. The actual increase was much smaller than foreseen (14.5%). Adjustments and elimination of mistakes in the new wage system will most probably continue and the effect of the new wage reform will be distributed over several months. The corrections will mainly pertain to the method of taking account of conditions for promotion, lowering the deduction for a lack of education, possibility of promotion in management positions and similar. In some institutions, the implementation of the new wage system may also be followed by the preparation and adoption of new acts on job systematisation due to necessary reorganisations, which may also translate into higher wages. As a result of bargaining, by far the highest monthly and y-o-y gross wage rises in the public sector were achieved in health and social work, followed by public administration and other community, social and personal services. The smallest increase was seen in the gross wage in education. However, the gross wage in education recorded higher growth rates than wages in other public sector activities in the period from 2002 to 2006, as this was the only activity within this sector which had negotiated wage supplements in that period. Figure 18: Nominal gross wages per employee in the public sector 25 20 15 10 ■Public administration (L) ■ Education (M) ■ Health and social work (N) ■Other community, social and personal services (O) Source: SORS; calculations by IMAD. The gross wage in the private sector stagnated, recording positive growth (1.1%) only in production services (G-I). This stagnation was also a result of three fewer working days, but we nevertheless expected positive growth in private sector wages, mainly due to August's adjustment of starting-level and lowest basic wages (by 3.9%) and a 4% adjustment of the minimum wage. August's growth of wages 9 6 3 5 0 0 5 19 Slovenian Economic Mirror, October 2008 Current Economic Trends in the private sector was somewhat below expectations, which may already be indicative of the impact of the economic slowdown. Prices As in September, consumer prices also remained unchanged in October. Y-o-y inflation dropped for the fourth consecutive month and totalled 4.9% in October, the lowest figure since September 2007. Consumer prices increased by 3.5% in the first ten months of the year, 0.7 p.p. less than in the same period last year. Core inflation is slowing as well. Price trends in individual price groups were very pronounced, according to detailed data for September, even though the general price level remained unchanged. The trends chiefly reflected the dynamics of prices marked by the largest seasonal swings. Overall price growth increased by 0.7 p.p. due to higher prices of clothing and footwear and declined by the same amount owing to prices of holiday packages. Lower prices of liquid fuels were also an important factor of inflation, contributing to a 0.3 p.p. decrease. Table 4: Prices 2007 2008 XII 2007/ XII 2006 O (I 07-XII 07)/ O (I 06-XII 06) IX 2008/ VIII 2008 IX 2008/ IX 2007 O (X 07-IX 08)/ O (X 06-IX 07) Consumer prices (CPI) 5.6 3.6 0.0 5.5 6.2 Goods 6.0 3.2 0.8 5.9 6.7 -Fuel and energy 9.8 3.1 -1.9 13.9 12.7 -Other 5.2 3.2 1.4 4.1 5.4 Services 4.8 4.5 -1.8 4.8 5.1 Consumer prices (HICP) 5.7 3.8 0.0 5.5 6.1 Administered prices1 7.2 2.6 -1.7 12.8 11.9 -Energy 9.6 2.7 -2.5 19.2 17.5 -Other 1.5 2.4 0.0 0.1 0.7 Core inflation: -trimmean 3.2 2.3 0.0 3.6 4.0 -excluding (fresh) food & energy 4.0 2.7 0.3 4.5 4.6 Consumer prices in the EMU 3.1 2.1 0.2 3.6 3.4 Producer prices of domestic manufacturers: -domestic market 6.3 5.4 -0.1 5.7 6.3 -EMU 0.9 5.0 -1.2 3.7 2.1 Sources: SORS, Eurostat, calculations by IMAD. Figure 19: Contributions to inflation in the first nine months of the year 1.6 1.4 1.2 1.0 0.8 I 0.6 O S" 0.4 fC C 0.2 C 15 (D OJ > 10 5 0 CT Source: BS; calculations by IMAD. 5 26 Slovenian Economic Mirror, October 2008 Current Economic Trends However, this growth is dropping from month to month. A most notable moderation was seen in borrowing from domestic banks in the form of consumer loans, which dropped by more than a half relative to the comparable period last year. The slowdown in housing loans is even more pronounced in the total euro area, where y-o-y growth almost halved relative to the end of the year, falling to 4%, the lowest figure since comparable data have been available (December 2003). Housing loans nevertheless account for just over 70% of all household loans, while the share of these loans in Slovenia amounts to 41.7% In the first eight months of the year, enterprises and NFI net borrowed EUR 2,973.4 m from domestic banks, a fifth less than in the comparable period of2007. The largest decline was recorded in loans for other purposes, totalling EUR 256.7 m, almost 50% less than in the comparable period in 2007, which is most likely a result of weaker takeover activity relative to the previous year. A notable slowdown was also seen in working capital loans, since their net flows (EUR 1,756.4 m) fell behind the figure recorded in the same period last year. The slowdown in this type of borrowing is mainly linked to the considerable deceleration of production activity growth of enterprises. The slowdown in net borrowing for investment is much less pronounced. Having reached EUR 960.2 m, net borrowing for investment was only just over one per cent lower relative to the comparable period last year. Borrowing of enterprises abroad remains a less important factor in financing, even though it has strengthened somewhat in recent months. Totalling EUR 378.5 m (5.0% less than in the same period last year), it accounted for a good tenth of the total net borrowing of enterprises and NFI. Contrary to enterprises and NFI, net borrowing is an important source of financing in the banking sector. In the first eight months, banks took out net loans in the amount of EUR 2,042.7 m, a fifth more than in the same period last year. The financing conditions tightened significantly due to the financial crisis; interest rates rose and the maturity of loans shortened, as banks largely have access only to short-term resources, which represented as much as 56.1% of the total net borrowing of banks in the first eight months of 2008, compared to the 15.0% share in the same period last year. Figure 28: Volume and structure of banks' net borrowing abroad 1200 Source: BS, www.euribor.org. Domestic banks have adopted a more intensive interest rate policy, as they are increasingly dependent on household savings due to the tightening conditions on the interbank market. Long-term interest rates posted the largest increase (by 1.6 p.p. on average) this year, resulting in significantly stronger growth in long-term deposits. Long-term deposits recorded 27.2% growth y-o-y, and as much as 21.8% growth over the last five months alone. This strong growth was mainly underpinned by short-term and sight deposits where y-o-y growth rates declined or were even negative. Part of the assets from mutual funds was most probably also transferred to bank deposits. In the first eight months of 2008, mutual funds managed by domestic administrators recorded a net outflow of EUR 131.8 m, compared with net inflows of as much as EUR 345.9 m in the same period last year. Net inflows were only recorded this year by money market mutual funds, as a result of their investment policy, given that practically all their assets are in the safest and most liquid investments. High net outflows were only a minor reason for this year's 25% decline in assets of mutual funds managed by domestic administrators. More than four fifths of the total decline is attributable to the lower value of investment in mutual funds. 0 -300 Slovenian Economic Mirror, October 2008 Current Economic Trends 27 Figure29: Dynamics of domestic interest rates ■ Time deposits up to 1 year " Time deposits for more than 2 years Housing loans ■ Time deposits for more than 1 up to 2 years ' Loans to enterprises over EUR 1 m, variable and fixed interest rates up to 1 year * * * / •••••• 1 i /L*' which dropped by close to three quarters. Trading in investment funds (62.4%) and bonds (57.8%) also saw a notable decline. The quarterly decline of indices on main capital markets was lower than on the Ljubljana Stock Exchange, largely as a consequence of somewhat different developments in July and August, when the value of certain indices strengthened somewhat as well. The value of the MSCI World measured in euros dropped by a mere 5.4% in Q3. This low drop was to a certain extent also linked to the appreciation of the dollar against the euro (see Figure 5), given that the dollar increased by a good tenth in that period. The negative trends only got stronger in October, owing to the financial crisis spilling over into other sectors of the economy. Among the main stock indices, the leading index for the Tokyo stock market, NIKKEI225, recorded the largest decline, having lost 23.8% of its value, while the value of the MSCI World dropped by 10.3%. o Source: BS. The negative trends on the Ljubljana Stock Exchange continued also in Q3 2008 (-21.4%) when the fall of the value of shares on the Ljubljana Stock Exchange accelerated again. The decline is largely due to tougher conditions on practically all capital markets in September as a result of the expanding financial crisis. The main index on the Ljubljana Stock Exchange (SBI20) dropped by 16.2% in September, the largest monthly decline recorded in the last ten years. Its volatility strengthened notably this year. While the index recorded an average daily increase and decrease of 0.5% in 20002007, the average daily increase and decline strengthened to 1.3% and 1.5%, respectively, this year. The market capitalisation of shares recorded a smaller decline than the stock exchange index, mainly as a result of the listing of one of the state-controlled companies on the Ljubljana Stock Exchange. Turnover on the Ljubljana Stock Exchange continues to fall, having reached a three-year low in Q3 this year (EUR 196.5 m). At the y-o-y level, it was more than 70% lower, posting the largest decline in the volume of trading in shares, Public finance In the first seven months of the year, general government revenue increased by 13% relative to the same period last year. According to the consolidated balance4 of the Ministry of Finance (using the cash flow method), general government revenue totalled EUR 8.7 bn, recording more than two-fold growth relative to the comparative period last year when growth was at 5.3%. This year, general government revenue is created according to slightly amended tax legislation and tax instruments. In the first seven months it was also influenced by favourable macroeconomic developments and partly by inflation. The corporate income tax saw changes in the tax relief system and a statutory tax rate cut. The adopted amendments to the Personal Income Tax Act lowered the burden of tax-payers in low income brackets by increasing general tax relief. In 2008, the payroll tax will be paid at considerably reduced tax rates for the last time before being phased out. In the first seven months, general government revenue recorded the largest increase in revenue from personal income tax (33.4%), where revenue from other personal income tax categories (interest, dividends) rose faster than revenue 8 7 6 5 4 3 2 4 The consolidated balance includes revenue and expenditure of state and municipal budgets and the pension and health funds. 28 Slovenian Economic Mirror, October 2008 Current Economic Trends from taxes on wages, and in revenue from corporate income tax (15.3%). Domestic taxes on goods and services were increasing at a somewhat slower pace compared to total revenues (11.8%) and growth of revenue from social security contributions was somewhat weaker (11.5%). In the first nine months, the growth of payments of taxes and contributions continues, but is already showing signs of a slowdown. According to data on the payments of taxes and social security contributions,5 taxes and social security contributions increased by 12.1% in the first nine months of 2008 relative to the same period last year (6.7% in the same period last year). According to the final assessment of the corporate income tax based on annual accounts for 2007, growth in revenue from this tax has been slowing in recent months, given the more even monthly advance payments of the tax. In the first nine months of 2008, revenue from corporate income tax increased by 14.8%. The dynamics of domestic taxes, which rose by 11.2% in the first nine months, also suggest a slight slowdown. Part of this slowdown is associated with the deceleration of economic activity, while the other part can be explained by last year's amendments Table 7: Consolidated general government revenues and expenditure 2007 2008 EUR m % of GDP Growth. % VII 08/ VII 07 I-VII 08/ I-VII 07 Revenues - total 14,006.1 40.6 8.1 13.5 13.0 -Tax revenues 12,757.9 37.0 8.5 15.0 13.3 -Taxes on income and profit 2,917.6 8.5 6.7 76.6 25.6 -Social security contributions 4,597.9 13.3 8.7 12.3 11.5 -Domestic taxes on goods and servises 4,498.6 13.1 10.3 0.0 11.8 -Receipts from the EU budget 347.9 1.0 -0.1 165.4 6.6 Exponditure - total 13,915.5 40.4 5.4 4.1 8.0 -Wages and other personnel expenditure 3,276.9 9.5 3.0 6.6 4.6 -Purchases of goods and services 2,212.2 6.4 6.7 21.7 17.1 -Transfersto individuals and households 5,093.3 14.8 4.6 8.8 7.0 -Capital expenditure 1,130.5 3.3 25.4 7.6 20.0 -Capital transfers 334.3 1.0 -17.4 -2.2 3.1 -Payment to the EU budget 355.9 1.0 23.6 -20.3 21.0 Soure: MF. calculations by IMAD. 5 Based on the Report on payments of all public revenues, January-September 2008. Figure 30: Consolidated general government revenue and expenditure 1600 1400 1300 1100 900 -Total revenues -Total expenditures Source: MF; calculations by IMAD. 1700 1500 1200 1000 Slovenian Economic Mirror, October 2008 Current Economic Trends 29 to the Value-Added Tax Act and last year's changes in excise duty rates, which were not in effect during the whole year; both had an impact on the time period when taxes were paid last year. Revenue from social security contributions recorded the most stable growth, around 11.4% in all monthly periods. The current nine-month trends in general government revenue indicate that if these dynamics continue, general government revenue will be somewhat higher at the end of the year than envisaged by the supplementary budgets and financial plans of the national Health Insurance Institute (HIIS) and Pension and Disability Insurance Institute (PDII), most notably in personal income tax and somewhat less in value-added tax and corporate income tax and social security contributions. According to the consolidated balance of revenue and expenditure of the Ministry of Finance for the first seven months of the year, general government expenditure rose by 8% relative to the same period last year. General government expenditure totalled EUR 8.3 bn in the first seven months of 2008, and posted somewhat stronger growth compared with 4.9% in the same period last year. With regard to the economic structure of expenditure, Figure 31: Main consolidated general government expenditures - Wages and other personnel expenditures • Expenditure on goods and services - Transfers to individuals and households - Capital expenditures and capital transfers - Payments to EU budget the largest y-o-y increase in this period was seen in payments to the EU budget (by 21%), followed by expenditure on investment and investment transfers (17.4%) and expenditure on goods and services (17.1%). Expenditure on transfers to individuals and households increased by 7%. Following the amendment of the act, which introduced the adjustment of transfers (except pensions) for inflation, June saw adoption of the amendment stipulating that the adjustment of transfers (except pensions) be carried out twice a year (also in July). In the first seven months of the year, expenditure on wages and contributions of employees increased by a mere 4.6% and subsidies by 6.8%. Interest payments and other expenditure (phase-out of the payroll tax) dropped relative to the same period last year. According to the Report on implementation of the state budget in the first half of the year, expenditure will not deviate notably from that envisaged by the supplementary budget, except for certain redistributions of funds, particularly in transfers to individuals and households. An additional risk to general government expenditure is somewhat faster nominal growth of all wages, which will require more funds for the adjustment of pension system expenditure (in November 2008) and will indirectly also affect the level of state budget transfers to the pension fund. September saw the disbursement of a compensatory cost-of-living allowance to pensioners with low pensions according to a separate act. The risk associated with all general government expenditure also pertains to the adjustment of wages in the public sector on the basis of the act on the elimination of wage disparities. This year, the risk attached to the realisation of the state budget is utilisation of funds received from the EU budget. According to the preliminary release by the Ministry of Finance, on the expenditure side the realisation of the supplementary budget was 59.1% in the period from January to August, the realisation of the amended HIIS financial plan 62.8% and of the amended PDII financial plan 65.8%. The realisation of municipal budget expenditures in the first seven months of the year was just over 50%. Source: MF. 30 Slovenian Economic Mirror, October 2008 Current Economic Trends Box 4: General government revenue, expenditure and balance In September, the Statistical Office of the Republic of Slovenia published a corrected version of the main general government categories for 2004-2007, which with the new estimate of the national aggregates for 2007 instead of the first annual estimate of the general government deficit (amounting to -0.1% of GDP) recorded a surplus of 0.5% of GDP. The revision is mainly due to the revised corporate income tax assessment for 2007 on the basis of annual accounts, which was notably higher than estimated in the spring. The general government balance was positive for the first time since 1995' and is estimated at 0.5% of GDP, which means that it improved by 1.7 p.p. of GDP relative to the year before. Total general government revenue and expenditure as shares of GDP both decreased relative to the year before. Given that the decline on the side of expenditure was larger than on the side of revenue, the general government balance was positive at the end of the year. Table 7: General government revenues, expenditures and deficits in % of GDP 2000 2001 2002 2003 2004 2005 2006 2007 Change 2006-2007, p. p. Revenues total (% of GDP) 43.0 43.6 43.9 43.7 43.6 43.8 43.3 42.9 -0.4 Expenditure total (% of GDP) 46.7 47.6 46.3 46.4 45.8 45.2 44.5 42.4 -2.1 General government deficit (net borrowing (-); % of GDP -3.7 -4.0 -2.5 -2.7 -2.2 -1.4 -1.2 0.5 -1.7 Sources: SORS, calculations by IMAD. 2007, general government revenue was created on the basis of changed tax legislation. Revenue growth was stimulated by favourable macroeconomic trends and was also partly a result of higher inflation. General government revenue was estimated at EUR 14.8 bn in 2007, having increased by a nominal 10.2% compared with the year before. Its share in GDP totalled 42.9% of GDP and dropped by 0.4% of GDP relative to 2006. The revenue structure also changed due to amended tax legislation and macroeconomic trends. By individual category, the share of current taxes on income and property increased by 0.4% of GDP. Within that, revenue from personal income tax as a share of GDP slightly decreased (by 0.1 p.p. of GDP), partly due to tax legislation changes and partly due to the wage bill's lagging behind GDP growth. The decline in the share of personal income tax in GDP was mitigated by the personal income tax assessment, which was positive in 2007 (EUR 11 m), while it was negative in the year before (-EUR 155 m). The share of revenue from corporate income tax increased by 0.4 p.p. of GDP. The corporate income tax was calculated on the basis of new tax legislation which cut the statutory tax rate from 25% to 23%, but at the same time also lowered tax relief (by 26%), which, along with the corporate income tax increase, resulted in an even higher tax base (28.6% higher relative to the year before). The corporate income tax assessment increased by 26.2% in 2007 relative to 2006. The shares of revenue from interest and capital transfers also increased in 2007 (by 0.1% and 0.2% of GDP, respectively). The shares of other categories of general government revenue decreased. Revenue from social security contributions decreased by 0.3% of GDP. Seeing unchanged rates, social security contributions followed growth of wages, which was weaker than economic growth in 2007. The share of taxes on production and imports also declined (by 0.2% of GDP), dropping by 0.3 p.p. of GDP as a consequence of the gradually lowering payroll tax and weaker growth of wages relative to GDP growth. The share of revenue from excise duties in GDP rose by 0.1 p.p. of GDP, largely on account of the increase in excise duties on tobacco products at midyear and the adjustment of excise duties on oil products to oil price trends in 2007. Value-added tax growth followed economic growth and maintained its share in GDP posted in 2007. Revenue from other current transfers also decreased, by 0.3% of GDP. General government expenditure in 2007 is estimated at EUR 14.6 bn; it increased by 5.9% relative to the year before. Its share of GDP totalled 42.4% of GDP, 2.1 p.p. of GDP less than in 2006, which is the largest decline since 2001. The shares of GDP dropped for all expenditure categories except subsidies, gross fixed capital formation and capital transfers, which did not change in 2007. The largest decline was posted in the share of social benefits in cash (by 1 p.p. of GDP). Half of this decline was due to expenditure on pensions and half to other social transfers, due to 31 Slovenian Economic Mirror, October 2008 Current Economic Trends the implementation of a uniform mechanism for their adjustment for inflation (with the exception of pensions). The share of the compensation of employees decreased by 0.6 p.p. of GDP due to slower growth of the number of employees in the general government (0.3%) and weak growth of the wage per employee in the public sector in 2007 (0.5%). The shares of intermediate consumption and other current transfers in GDP both dropped by 0.3 p.p. of GDP in 2007. The share of expenditure on interest payments, and the share of expenditure on other taxes on production also decreased (by 0.1 p.p. of GDP each), due to the phase-out of the payroll tax. 1 Since the results of the general government began to be measured according to the national accounts methodology. According to data from the Ministry of Finance, Slovenia's payments to the EU budget6 achieved 72% of planned payments by the end of September while receipts from the EU budget amounted to around 30.0% of scheduled funds. It can therefore be inferred that this year the realisation of payments to the EU budget will reach the level envisaged by the supplementary budget of the Republic of Slovenia. In the first four months of the year, payments to the EU budget were somewhat higher, as the European Commission may require the Member States to pay higher contributions to the EU budget in Q1; otherwise, these contributions are quite stable. The utilisation of funds from the EU budget also tends to be somewhat lower in the first months of the year and highest in Q4. Slovenia's state budget thus recorded large deficits under the heading of European funds in the first months of the year, which were not even offset by the two large surpluses in June and August as a result of increased utilisation of funds under the Common Agricultural Policy. According to the data at the end of September, Slovenia's state budget thus records a negative net position towards the EU budget, in the amount of EUR 37 m. According to the Ministry of Finance, EUR 233.8 m7had been utilised by the end of September, roughly the same amount as in 2007, only that last year only saw 60% absorption of all funds planned. A system of advance payments has been established in the area of structural funds and cohesion policy, according to which projects are first financed from the state budget, both Slovenia's participation as well as the European part, which is then returned to Slovenia's state budget from the EU budget against submission of documents justifying the use of funds. This may result in large delays in receiving funds from the EU budget, especially in the area of structural funds. Structural funds as laid down by the previous financial perspective can only be Figure 32: Planned and utilised EU funds Structural policy Common Agricultural Policy Cohesion policy Internal policies Other Pre-accession EU funds 100 Source: MF. 200 300 EUR million 400 50C 0 6 The largest part of Slovenia's payments to the EU budget is payments based on GNP, which accounted for as much as 55% of all funds in 2007, followed by VAT-based payments, traditional own resource payments and payments for the UK correction. Traditional own-resource payments (customs duties, special duties on imports of agro-food products) are regarded as direct revenue of the EU budget. 7 The MF data only comprise funds received through the state budget and not all funds Slovenia acquires from the EU budget; namely, the European Commission also allocates funds directly to final recipients. Data on total funds transferred from the EU budget to Slovenia in individual years are published by the European Commission at the end of the accounting period. 32 Slovenian Economic Mirror, October 2008 Current Economic Trends drawn by the end of 2008. According to the Government Office for Local Self-Government and Regional Policy (GOLR), which monitors and analyses absorption of structural and cohesion funds throughout the entire programming period 2004-2006, almost all funds (99%) were already allocated and utilised at the end of June 2008, but only 86% of these funds have been refunded from the EU budget. The data show that the entire amount will be refunded by the end of 2008 so that the utilisation of EU structural funds according to the old financial perspective will be 100%.8 Cohesion funds, on the other hand, can be drawn until 2010. According to the GOLR data, these funds have already been assigned as well, but due to the nature of financing projects, their absorption is at the level of 57% in the area of transport and 43% in the area of environment, according to the data at the end of June. 8 Based on the previous financial perspective, Slovenia may draw only 95% of all funds from the EU budget by the end of 2008; the remaining 5% may be obtained after the European Commission has performed its inspections and controls on their use. Selected topics Slovenian Economic Mirror, October 2008 35 Selected Topics Municipal waste The quantity of separately collected municipal waste collected by public waste removal services in Slovenia increased somewhat again in 2007. Sustainable development in the area of waste primarily entails a reduction in waste generation and reuse and recovery of waste, as this enables decoupling of economic growth from pressures on the environment. Municipal waste growth lagged significantly behind economic growth in 2007 (4.5 p.p.). The share of separately collected fractions in total municipal waste collected by public removal services also increased slightly again, to 15.3% (13.4% in 2006). The share of separately collected municipal waste has been slowly increasing over these years. In 2006, the largest increase was recorded in the share of separately collected packaging waste in municipal waste, and last year, in the share of other separately collected fractions and biodegradable waste. This is a result of the establishment of the system of "ecological islands", i.e. dedicated waste containers for separate collection of household waste. The share of mixed municipal waste, which is difficult to reuse or recycle, therefore decreased. Among the fractions of municipal waste collected by public waste removal services, in 2007 the largest increase was observed in glass and discarded electrical, electronic and other equipment. Despite positive trends, there is still a lot to be done in the area of waste management in Slovenia, for separate waste collection still amounts to less than half of all generated municipal packaging waste, while in the area of separately collected biodegradable municipal waste (representing only one sixth of all generated biodegradable municipal waste) the situation is even worse. The present system of packaging waste collection is not based on economically viable solutions addressing the challenge of waste from both the municipal and business perspectives. The area of municipal packaging waste is thus left to local public removal services, which lack the means and targets aimed at encouraging public services to collect more of this waste. Households are therefore not encouraged to collect packaging waste separately, and separate collecting of this waste thus depends exclusively on the awareness of individuals. High decentralisation of the system of local services is an additional culprit in the economically non-efficient collection of separate fractions, as it does not provide the main factors necessary for the secondary raw material market: uniform quality, quantity and regular delivery. Sustainable development in the area of waste treatment is aimed at reducing landfilling to the greatest possible extent. By depositing waste in a landfill site, we use space, which is a natural resource, and at the same time remove waste, a material resource, which is not in line with the targeted reduction of use and pressures on the natural environment. Landfilled waste also causes water and soil pollution and is a source of greenhouse gas emissions. Moreover, during the biological degradation of waste, methane is released into the atmosphere at waste landfill sites. Methane is a greenhouse gas and is 23-times more powerful than carbon dioxide. According to the Landfill Directive 99/31 EC, adopted to address this problem, by 2016 the Member States should reduce the quantities of biodegradable waste deposited in landfill sites to 35% of the quantity deposited in 1995; Member States which landfilled more than 80% of collected municipal waste in 1995 should achieve this target by 2020. Slovenia is among these latter states. The Decree on the Landfill of Waste determines the quantities of biodegradable material which may be sent to landfill sites in individual calendar years. The share of landfilled biological waste is thus expected to decline from 63% of all waste landfilled in the starting year 1995 to 22% by 2013 or 2015. Data on the implementation of this decree are not yet available. In Slovenia, landfilling is still the predominant method of municipal waste management. The share of landfilled municipal waste in total municipal waste thus totalled 77.5% in 2007; this is otherwise less than in 2006 when the trend of reducing the quantity of municipal waste disposed of to landfill was interrupted. The share of landfilled municipal waste has thus decreased since 2002 (86%), but is still exceptionally high. Given that more waste was collected separately in 2007, less waste was deposited at landfills and more handed over for recycling and to other collectors and packaging waste providers. Increased separate waste collection and Slovenian Economic Mirror, October 2008 36 Selected Topics recycling results in reducing the amount of landfilled municipal waste. Treatment of separately collected fractions improved significantly in 2007 when somewhat larger quantities of separately collected waste were handed over for recycling and to other collectors and packaging waste treatment providers (16.6% of total waste collected by public waste removal services, against 14.5% in 2005). Consequently, fewer separated fractions were landfilled. Landfilling was especially problematic in biological waste, since, even though biological waste was collected separately in the previous years, close to 20% was later landfilled again. TheshareoflandfilledwasteintheEU-15hasbeen declining in all years and dropped from 57.8% to 34.3% in the period from 1995 to 2006. In recent years, the most rapid decline was recorded in Germany, Belgium and the Netherlands. In addition to these countries, in 2006 the share of landfilled municipal waste was below 5% in Denmark and Sweden. Among the EU-15, only Greece still sets a bad example, given that in 2006, the share of landfilled municipal waste in Greece still totalled 87.1%, although it is slowly decreasing. The EU countries have Figure 33: The share of landfilled and incinerated (by energy production) municipal waste, 2006 Lithuania Poland Czech R. Cyprus Greece Malta Romania Slovenia Hungary Bulgaria Slovakia Latvia Portugal U. Kingdom Estonia Ireland Finland Italy Spain EU-27 France Luxembourg Austria Belgium Sweden Denmark Netherlands Germany 0 20 80 40 60 Share in % Source: Eurostat, own calculations. 100 also achieved their small shares of landfilled municipal waste by incineration; almost half of all municipal waste is incinerated in Denmark and Sweden, and 21.5%, on average, in the EU-15. Greece and Ireland are exceptions in this area, as they do not incinerate any of their waste. In the new Member States, waste is practically not incinerated at all, except in the Czech Republic, Slovakia and Hungary, where the share of incinerated municipal waste totals 10%. Agriculture - production According to the Economic Accounts for Agriculture, the volume of agricultural production increased somewhat last year. On the whole, it was 2.9% higher, which is not much given the relatively small volume recorded in the year before. It has fluctuated considerably in the period after 2000. Lower production volumes were only recorded in 2001, 2003 and 2006, when weather conditions were not favourable for agriculture. Production was much higher particularly in 2004 and 2005 when weather conditions were better. This shows that Slovenia's agriculture is highly dependent on weather conditions, as agricultural production in protected and irrigated areas is still relatively modest. An increase was recorded in crop production as well as in livestock breeding. After falling notably in 2006, crop production was only 1.6% higher. The harvest of potatoes, fodder plants, cereals and fruit increased, while the yield of industrial plants and vegetables fell again. The decline in industrial plant production was due to discontinued production of sugar beets (in line with the guidelines of the common agricultural policy), but the output of certain oilseeds (oilseed rape by as much as 89%) rose significantly due to increased demand and consequent higher prices. A relatively significant decrease was again recorded in vegetable production, which is unfavourable, since according to food policy recommendations Slovenia should improve its extremely low self-sufficiency rate for vegetables. After a three-year decline, the total production of meat and animal products posted a higher rise than crop production (by 4.2%). Meat production rose by 3.4% and production of animal products by 5.4%. The largest increase was seen in poultry, in meat Slovenian Economic Mirror, October 2008 37 Selected Topics production, where a significant decline was recorded in the year before, as well as egg production (by 19.3 and 23.8%, respectively). Cattle production, which otherwise accounts for the largest share in the structure of total agricultural production, also increased, after posting a decline over the last few years; meat and milk production achieved almost equal rates of growth (3.7% and 3.6%, respectively). Growth of production in Slovenia was last year stronger than the average growth in the EU, with extreme developments recorded by new EU Member States. While agricultural production growth in Slovenia reached 2.9% last year, the average growth in the EU-27 was 0.2%, according to the first estimates. Relatively high estimates were seen particularly in the four countries in Northeastern Europe (Lithuania, Estonia, Latvia and Poland), while the estimates for Hungary, Romania and Bulgaria were low (see Figure 34). These differences were mainly attributable to different growth rates in crops (from a 38% increase in Lithuania to a 32% drop in Bulgaria). In all first six countries with the highest growth rates in agricultural production last year (Lithuania, Structure Agricultural output volume, annual growth rates, % 2007, % 2001 2002 2003 2004 2005 2006 2007 Crop production 54.0 -11.6 29.6 -25.4 46.7 -2.5 -12.6 1.6 Grain 8.6 1.1 21.1 -33.9 42.7 -0.6 -13.7 6.9 Industrial plants 2.8 -17.7 28.4 -18.0 17.3 16.0 -1.4 -29.1 Fodder plants 16.3 -1.6 26.1 -29.3 49.8 11.2 -21.0 12.5 Vegetables and horticultural plants 5.9 -10.4 19.0 -20.5 59.6 2.6 -12.2 -15.1 Potatoes 2.6 -17.7 14.1 -34.6 50.6 -16.1 -20.1 1.2 Fruit 8.7 -30.3 32.0 -21.4 35.8 -16.8 1.5 1.2 Wine 9.1 -15.8 57.5 -19.0 51.1 -20.1 -9.4 -3.0 Animal products 46.0 2.2 1.0 -0.7 -3.3 -0.6 -2.0 4.2 Animals 27.7 3.4 -2.1 2.8 -3.9 -1.7 -2.6 3.4 of which: Cattle 11.6 -1.7 -2.5 1.8 -3.3 -2.3 -4.7 3.7 Pigs 7.8 9.4 1.6 1.9 -2.9 -6.8 4.9 -6.5 Poultry 7.1 8.2 -9.0 6.3 -6.9 4.1 -9.4 19.3 Animal products 18.3 0.4 6.2 -5.6 -2.4 1.1 -1.1 5.4 of which: Milk 15.1 0.6 7.7 -3.7 -2.9 1.8 -2.5 3.6 Eggs 2.3 -4.1 -5.9 -18.6 -9.3 -2.7 5.9 23.8 Agricultural products, total 100.0 -4.3 13.6 -13.1 19.5 -1.6 -7.5 2.9 Agricultural services -3.5 0.0 0.0 3.4 8.8 0.0 -19.4 Agricultural output, total -4.3 13.4 -12.9 19.2 -1.5 -7.3 2.4 Sources: SORS, Economic accounts for agriculture, calculations by IMAD. Figure 34: Growth in the agricultural output volume in Slovenia, 2000-2007 o«— rNro^Lnvor-v oooooooo oooooooo rNCNCNCNCNCNCNCN Source: SORS, Economic accounts for agriculture; calculations by IMAD. Slovenian Economic Mirror, October 2008 38 Selected Topics Estonia, Latvia, Poland, Slovakia and the Czech Republic), growth rates have been by far the highest in the total period since 2000, during which time growth in Slovenia lagged significantly behind. Figure 35: Annual growth in the agricultural output volume in the EU-27 in 2007 Lithuania Estonia Latvia Poland Slovakia Czech R. Austria Luxembourg Spain Finland SLOVENIA Germany Belgium Denmark Netherlands France Sweden EU-27 Italy Greece U. Kingdom Ireland Portugal Malta Hungary Romania Bulgaria -20 -15 -10 -5 0 5 10 15 20 Growth, % Sources: Eurostat, SORS, Economic accounts for agriculture (estimates); calculations by IMAD. Note: more recent data are available for Slovenia, from October 2008. No data are available for Cyprus. Statistical Appendix Slovenian Economic Mirror, October 2008 41 Statistical Appendix MAIN INDICATORS 2003 2004 2005 2006 2007 2008 2009 2010 Autumn forecast 2008 GDP (real growth rates, in %) 2.8 4.3 4.3 5.9 6.8 4.8 3.1 4.0 GDP in EUR million (current prices and current exchange rate) 25,752 27,162 28,704 31,013 34,471 37,725 40,343 43,470 GDP per capita, in EUR (current prices and current exchange rate) 12,900 13,599 14,346 15,446 17,076 18,623 19,859 21,344 GDP per capita (PPS)1 17,000 18,400 19,500 20,700 22,0002 - - - GDP per capita (PPS EU27=100)1 82 85 87 88 892 - - - Gross national income (current priced and current exchange rate) 25,553 26,848 28,460 30,645 33,792 36,754 39,333 42,413 Gross national disposable income (current prices and current exchange rate) 25,583 26,803 28,316 30,429 33,531 36,464 39,260 42,330 Rate of registered unemployment 10.9 10.3 10.2 9.4 7.7 6.8 6.8 6.7 Standardised rate of unemployment (ILO) 6.7 6.3 6.5 6.0 4.9 4.6 4.8 4.8 Labour productivity (GDP per employee) 3.2 4.0 4.5 4.2 3.7 2.4 3.1 3.7 Inflation3, year average 5.6 3.6 2.5 2.5 3.6 6.2 3.9 3.3 Inflation3, end of the year 4.6 3.2 2.3 2.8 5.6 5.3 3.6 3.0 INTERNATIONAL TRADE - BALANCE OF PAYMENTS STATISTICS Exports of goods and services4 (real growth rates, in %) 3.1 12.4 10.6 12.5 13.8 6.6 5.2 7.4 Exports of goods 4.4 12.8 10.3 13.4 13.1 4.7 4.6 6.8 Exports of services -2.5 10.9 12.0 8.6 17.0 15.5 8.1 10.2 Imports of goods and services4 (real growth rates, in %) 6.7 13.3 6.6 12.2 15.7 6.9 4.0 6.5 Imports of goods 7.3 14.6 6.8 12.7 15.1 6.5 3.2 6.0 Imports of services 2.8 5.6 5.5 8.8 19.7 9.7 9.0 9.5 Current account balance, in EUR million -196 -720 -498 -771 -1,455 -2,203 -1,900 -1,763 As a per cent share relative to GDP -0.8 -2.6 -1.7 -2.5 -4.2 -5.8 -4.7 -4.1 Gross external debt, in EUR million 13,225 15,343 20,508 24,034 34,358 39,9685 - - As a per cent share relative to GDP 51.4 56.5 71.4 77.5 99.7 - - - Ratio of USD to EUR 1.128 1.242 1.244 1.254 1.371 1.520 1.500 1.500 DOMESTIC DEMAND - NATIONAL ACCOUNTS STATISTICS Private consumption (real growth rates, in %) 3.3 2.7 2.6 2.9 5.0 4.5 3.5 3.6 As a % of GDP 56.0 55.0 54.4 53.0 52.2 52.9 53.2 52.9 Government consumption (real growth rates, in %) 2.2 3.4 3.3 4.1 2.5 3.4 2.2 2.6 As a % of GDP 19.0 18.9 19.0 18.8 17.7 18.0 18.5 18.7 Gross fixed capital formation (real growth rates, in %) 8.1 5.6 3.8 10.4 11.9 8.8 1.3 4.5 As a % of GDP 24.0 24.9 25.3 26.3 27.5 28.3 27.6 27.5 Sources of data: SORS, BS, Eurostat-New Cronos, forecasts by IMAD. Notes: 'Measured in purchasing power standard; 2Eurostat estimate before GDP revision for 2000-2007; 3Consumer price index; 4Balance of payments statistics (exports F.O.B., imports F.O.B.); real growth rates are adjusted for inter currency changes and changes in prices on foreign markets; 5End August 2008. Slovenian Economic Mirror, October 2008 42 Statistical Appendix PRODUCTION 2005 2006 2007 2007 2008 2007 Q1 Q2 Q3 Q4 Q1 Q2 Q3 1 2 3 4 INDUSTRIAL PRODUCTION, y-o-y growth rates, % Industry, total 3.3 6.1 6.2 8.4 6.9 5.9 3.8 1.5 3.3 - 7.6 8.9 8.5 12.7 C Mining and quarrying 6.7 10.4 3.6 9.4 13.3 0.7 -6.7 5.0 -9.4 - -14.8 10.2 34.3 23.5 D Manufacturing 3.7 6.5 7.5 9.7 8.1 6.8 5.7 1.7 3.6 - 9.1 10.6 9.3 14.0 E Electricity, gas & water supply1 -1.5 -0.9 -11.1 -8.1 -14.9 -5.0 -15.9 -3.4 6.2 - 0.2 -11.9 -13.0 -10.9 CONSTRUCTION2, real indices of construction put in place, y-o-y growth rates, % Construction, total 3.0 15.3 18.2 35.5 31.5 16.7 2.8 32.5 16.5 - 37.4 30.9 38.1 34.7 Buildings 10.3 14.0 15.7 22.6 31.5 9.9 5.6 37.2 7.9 - 27.8 12.7 27.6 26.8 Civil engineering -4.5 16.8 24.1 67.0 35.2 26.1 2.4 28.3 23.0 - 64.1 75.0 63.1 49.7 TRANSPORT, tonne-km in m, y-o-y growth rates, % Tonne-km in road transport 22.5 9.8 13.4 7.0 0.1 30.2 19.1 28.9 - - - - - - Tonne-km in rail transport 3.0 3.9 6.8 14.9 12.1 5.8 -3.7 -5.3 -2.9 - - - - - Distributive trades, y-o-y growth rates, % Total real turnover* 9.7 6.3 9.7 6.0 8.3 12.3 11.8 15.8 13.3 - 1.9 6.0 9.5 8.9 Real turnover in retail trade 6.9 1.6 5.5 6.4 3.8 5.7 6.0 5.9 5.8 - 3.5 2.4 12.3 6.0 Real turnover in the sale and maintenance of motor vehicles and in retail sale of automotive fuel 12.9 11.7 14.2 5.6 13.0 19.6 18.2 26.6 21.3 - 0.3 9.6 6.8 11.9 Nominal turnover in wholesale trade & commission trade 3.8 10.4 16.2 19.6 15.1 15.1 15.2 21.4 24.3 - 19.6 19.0 20.2 21.7 TOURISM, y-o-y growth rates, % Total, overnight stays -0.2 2.0 7.0 4.8 10.1 6.8 5.5 4.2 1.0 - 1.7 7.2 5.4 19.7 Domestic tourists, overnight stays -1.6 1.9 4.9 0.5 13.7 2.3 5.5 4.8 4.6 - -8.4 5.4 2.3 23.4 Foreign tourists, overnight stays 0.8 2.0 8.4 9.0 7.9 9.8 5.5 3.6 -1.3 - 8.9 9.8 8.4 17.6 Turnover in hotels and restaurants** 4.5 6.2 0.3 -1.5 -0.5 2.3 1.1 -1.6 -1.6 - -3.1 -2.0 0.5 -0.8 AGRICULTURE, y-o-y growth rates, % Purchase of agricultural products, SIT bn, since 2007 in EUR m 103.7 106.7 492.2 101.3 109.7 120.8 160.3 117.9 125.6 - 32.2 31.1 37.9 37.5 BUSSINES TENDENCY (indicator values**) Sentiment indicator 3 10 14 14 15 14 11 9 8 5 14 15 13 15 Confidence indicator - in manufacturing 0 10 12 13 13 12 10 7 2 -4 12 14 12 13 - in construction -6 4 17 18 20 16 14 13 10 4 12 19 22 19 - in services 22 27 29 29 29 30 28 28 26 26 31 28 29 30 - in retail trade 13 22 27 24 26 30 30 28 28 27 20 26 25 26 Consumer confidence indicator -19 -14 -11 -8 -8 -10 -17 -20 -16 -17 -8 -8 -8 -10 Slovenian Economic Mirror, October 2008 43 Statistical Appendix 2007 2008 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 3.2 5.4 8.7 8.0 1.5 10.0 1.6 -0.7 0.3 7.7 -3.0 8.9 -1.0 2.3 -2.0 -7.1 - - 8.8 8.3 -5.8 18.9 -9.7 -2.0 -4.6 -15.2 12.8 9.5 -3.9 0.2 -17.1 -11.5 7.6 -36.7 - - 4.3 6.9 10.0 8.4 2.5 11.8 3.0 1.7 0.5 8.2 -2.9 9.5 -0.6 2.3 -2.2 -6.0 - - -16.1 -17.4 -5.1 -1.7 -8.2 -10.9 -14.3 -21.5 -7.2 0.3 -2.6 5.4 2.3 11.1 -1.0 -6.6 - - 48.6 17.4 20.0 31.6 4.1 10.0 7.4 -11.8 38.7 41.3 21.2 23.1 13.6 14.0 18.6 9.3 - - 55.1 17.3 21.1 17.3 -5.4 1.9 19.7 -4.1 55.0 43.7 19.1 11.7 4.8 7.9 1.9 12.3 - - 45.2 17.4 19.3 52.7 13.5 16.1 -0.1 -18.0 23.7 39.3 22.9 32.0 20.0 18.8 31.7 7.2 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 9.5 6.5 10.6 12.9 13.4 16.8 11.7 7.0 18.2 24.0 7.2 17.5 11.9 10.4 12.7 - - - 4.5 1.2 4.7 4.7 7.9 9.4 4.5 4.3 6.5 15.0 -1.8 8.3 5.0 4.3 7.7 - - - 14.8 12.3 17.1 22.6 19.3 24.4 19.2 10.5 31.4 33.5 17.0 27.5 19.3 17.3 18.3 - - - 15.5 8.4 19.6 12.7 13.2 19.5 19.0 7.5 21.9 30.4 12.6 32.2 21.2 19.9 22.7 - - - 7.6 6.0 6.0 9.6 3.6 4.6 8.3 4.0 2.9 9.0 0.5 -8.5 14.0 -2.4 3.6 3.2 -4.0 - 8.6 12.0 0.9 7.2 -3.7 4.2 2.6 9.6 12.1 11.7 -8.5 8.5 10.5 -2.1 1.1 8.9 3.0 - 7.0 2.1 9.8 11.0 7.8 4.8 13.7 -0.9 -2.6 5.6 8.9 -18.3 16.3 -2.6 5.3 -0.2 -7.0 - -2.0 1.2 0.5 4.7 1.7 1.3 0.3 1.6 -2.6 3.7 -5.7 -2.1 2.8 -5.4 -3.9 - - - 38.4 33.8 38.3 41.8 40.7 46.2 53.1 61.0 38.5 39.3 40.0 42.6 43.0 39.9 44.5 42.2 - - 16 14 16 15 11 11 10 12 9 9 10 10 8 5 6 5 4 -2 14 12 12 12 11 11 10 9 9 7 6 4 2 -1 -3 -4 -5 -11 21 21 17 17 13 15 11 17 11 11 16 11 11 8 8 1 4 -1 28 29 32 30 28 30 25 28 28 29 28 27 26 25 25 27 25 22 26 27 27 28 34 28 31 30 27 28 30 29 29 27 29 27 25 26 -4 -9 -6 -9 -16 -17 -19 -16 -23 -20 -16 -12 -18 -19 -19 -20 -12 -17 Source of data: SORS. Notes: 'Only companies with activity of electricity supply are included. 2The survey covers all larger construction enterprises and some other enterprises that perform construction work. *Total real turnover in retail trade, the sale and repair of motor wehicles, and retail sale of automotive fuels; **Seasonally adjusted data. Slovenian Economic Mirror, October 2008 44 Statistical Appendix LABOUR MARKET 2005 2006 2007 2007 2008 2007 Q1 Q2 Q3 Q4 Q1 Q2 1 2 3 FORMAL LABOUR FORCE (A=B+E) 905.0 910.7 925.3 919.1 923.5 924.6 934.2 937.7 940.9 918.0 919.2 920.0 PERSONS IN FORMAL EMPLOYMENT (C+D)1 813.1 824.8 854.0 841.8 852.7 856.1 865.4 870.8 879.4 838.0 841.5 845.8 In agriculture, forestry, fishing 38.7 38.9 41.6 43.1 42.0 41.0 40.3 41.9 41.2 43.0 43.1 43.1 In industry, construction 310.9 313.3 322.9 317.4 322.2 324.8 327.3 327.3 331.5 316.2 317.8 318.3 Of which: in manufacturing 233.7 227.9 229.9 229.4 230.2 229.6 230.4 230.0 230.2 228.9 229.6 229.7 in construction 61.7 69.9 77.8 72.8 76.8 80.0 81.7 82.2 86.2 72.1 73.0 73.3 In services 463.5 472.6 489.5 481.3 488.5 490.3 497.8 501.6 506.7 478.8 480.7 484.4 Of which: in public administration 49.1 50.2 50.1 49.7 50.1 50.2 50.3 50.6 50.7 49.8 49.7 49.7 in education, health-services, social work 106.5 109.1 110.0 109.9 110.2 109.3 110.6 111.3 111.9 109.5 109.9 110.2 FORMALLY EMPLOYED1 731.6 741.6 766.0 753.1 764.7 768.6 777.8 781.2 790.3 749.5 752.9 757.0 In enterprises and organisations 666.2 675.1 696.1 685.8 695.0 697.5 706.2 710.4 718.0 682.8 685.6 689.0 By those self-employed 65.4 66.5 69.9 67.3 69.8 71.1 71.6 70.8 72.2 66.7 67.3 68.0 SELF-EMPLOYED AND FARMERS 81.5 83.3 87.9 88.7 87.9 87.6 87.6 89.6 89.2 88.5 88.6 88.8 REGISTERED UNEMPLOYMENT 91.9 85.8 71.3 77.3 70.9 68.4 68.8 66.8 61.4 80.0 77.7 74.2 Female 49.4 47.0 39.1 42.0 39.3 38.0 37.3 35.6 32.8 43.2 42.1 40.7 By age: under 26 22.2 18.2 11.9 14.0 11.6 10.3 11.7 10.3 8.4 15.1 14.2 12.8 aged over 40 40.1 39.7 37.1 38.7 37.2 36.6 36.1 36.3 34.7 39.0 38.8 38.1 Unskilled 37.5 33.7 28.0 30.4 27.7 27.0 26.9 26.8 24.6 31.6 30.7 29.0 For more than 1 year 43.4 41.9 36.5 38.8 36.7 35.5 35.0 34.0 32.5 39.6 39.0 37.9 Those receiving benefits 23.3 22.7 16.6 19.1 16.8 15.8 14.7 15.0 13.6 19.9 19.1 18.3 RATE OF REGISTERED UNEMPLOYMENT, E/A, in % 10.2 9.4 8.4 8.4 7.7 7.4 7.4 7.1 6.5 8.7 8.4 8.1 Male 8.6 7.7 6.2 6.9 6.1 5.9 6.0 6.0 5.4 7.2 7.0 6.6 Female 12.1 11.5 9.6 10.3 9.6 9.3 9.0 8.6 7.9 10.6 10.3 10.0 FLOWS OF FORMAL LABOUR FORCE 8.0 5.2 21.5 8.7 5.4 0.6 6.7 5.7 4.2 6.7 1.2 0.8 New unemployed first-job seekers 21.7 18.6 14.7 2.9 2.4 2.3 7.2 2.2 1.8 1.3 0.8 0.9 Redundancies 67.2 63.8 52.5 15.4 11.6 12.6 12.9 12.5 10.7 7.6 3.8 4.0 Registered unemployed who found employment 53.9 57.4 49.1 14.8 12.1 11.3 10.9 12.4 9.7 5.1 4.4 5.2 Other unemployed erased out of register 33.1 39.2 28.0 7.6 6.9 6.2 7.4 6.4 6.3 2.0 2.5 3.1 Increase in number of work permits for foreigners 3.9 7.8 15.3 3.9 4.9 4.3 2.2 6.0 9.5 0.3 1.2 2.5 Retirements2 18.4 20.6 20.7 5.2 4.7 5.0 5.9 5.4 4.8 2.0 1.8 1.4 Deaths2 2.3 2.5 2.4 0.6 0.6 0.6 0.6 0.7 0.7 0.2 0.2 0.2 Others who found employment2 32.7 36.7 37.8 14.3 9.2 4.6 9.9 8.9 3.3 9.1 3.5 1.8 REGISTERED VACANCIES3 16.9 19.0 20.2 20.5 21.0 20.4 19.1 21.6 21.1 20.0 17.8 23.6 For a fixed term, in % 75.6 75.3 76.5 76.7 77.5 77.2 74.4 73.0 74.0 77.1 75.1 77.5 WORK PERMITS FOR FOREIGNERS 41.6 48.3 60.2 52.6 59.3 63.0 65.8 68.7 79.0 51.0 52.2 54.7 As % of labour force (I/A) 4.6 5.3 6.5 5.7 6.4 6.8 7.0 7.3 8.4 5.6 5.7 5.9 NEW JOBS 137.0 155.9 160.0 39.1 40.7 38.7 41.5 40.9 41.0 13.5 11.6 13.9 Slovenian Economic Mirror, October 2008 45 Statistical Appendix 2007 2008 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 921.6 923.6 925.4 924.5 923.1 926.0 934.0 935.8 932.8 936.6 937.9 938.5 939.1 940.8 942.7 942.4 940.5 849.0 852.9 856.2 854.4 854.6 859.4 864.5 867.4 864.4 867.3 870.9 874.2 876.6 879.6 882.0 879.9 879.8 41.9 42.0 42.0 41.0 41.0 41.0 40.4 40.3 40.2 41.8 41.9 42.1 41.2 41.2 41.2 40.6 40.6 320.5 322.3 323.9 324.3 324.4 325.7 327.7 328.4 325.7 326.0 327.1 328.8 330.3 331.4 332.8 332.7 332.7 230.0 230.2 230.3 229.8 229.3 229.7 230.7 230.9 229.7 229.8 229.9 230.4 230.3 230.1 230.2 229.0 228.5 75.3 76.8 78.3 79.1 79.9 80.9 81.8 82.4 80.9 81.2 82.2 83.3 84.8 86.2 87.5 88.7 89.2 486.6 488.6 490.3 489.1 489.2 492.7 496.4 498.7 498.5 499.6 502.0 503.4 505.2 507.0 508.0 506.5 506.6 49.9 50.1 50.2 50.2 50.2 50.2 50.3 50.3 50.4 50.6 50.7 50.5 50.6 50.7 50.9 50.7 50.8 110.4 110.1 110.2 109.0 108.7 110.1 110.6 110.8 110.5 110.9 111.4 111.5 111.7 112.0 111.9 110.6 110.4 761.3 764.9 768.1 767.0 767.1 771.6 777.0 779.7 776.7 777.9 781.3 784.3 787.6 790.5 792.8 791.1 790.9 692.4 695.1 697.5 696.2 696.1 700.1 705.2 707.7 705.9 707.8 710.5 713.0 715.8 718.2 720.2 718.5 718.2 68.9 69.8 70.6 70.8 71.0 71.5 71.8 72.0 70.8 70.2 70.8 71.3 71.8 72.3 72.6 72.7 72.7 87.8 88.0 88.1 87.3 87.5 87.8 87.5 87.7 87.7 89.4 89.6 89.9 89.1 89.2 89.2 88.8 88.9 72.6 70.7 69.3 70.1 68.5 66.7 69.5 68.4 68.4 69.2 67.0 64.3 62.4 61.2 60.7 61.6 60.7 40.2 39.2 38.5 39.3 38.1 36.7 38.0 37.1 36.7 36.9 35.7 34.3 33.5 32.6 32.4 33.0 32.3 12.2 11.5 11.1 11.1 10.4 9.5 12.2 11.6 11.2 11.1 10.3 9.5 8.8 8.4 8.1 8.1 7.8 37.7 37.2 36.7 36.9 36.6 36.3 36.1 36.0 36.3 37.0 36.4 35.6 35.0 34.7 34.5 34.6 34.4 28.2 27.7 27.1 27.2 27.0 26.7 27.0 26.8 27.1 27.6 26.9 25.9 25.0 24.6 24.3 24.3 24.3 37.4 36.8 36.0 35.8 35.6 35.0 35.3 35.0 34.7 34.7 34.0 33.3 32.7 32.5 32.2 32.1 31.8 17.2 16.9 16.3 16.3 16.0 15.2 14.8 14.5 14.7 15.6 15.1 14.2 13.7 13.6 13.4 13.9 13.9 7.9 7.7 7.5 7.6 7.4 7.2 7.4 7.3 7.3 7.4 7.1 6.9 6.6 6.5 6.4 6.5 6.5 6.3 6.1 6.0 6.0 5.9 5.8 6.0 6.0 6.1 6.2 6.0 5.7 5.5 5.4 5.4 5.4 5.4 9.8 9.6 9.4 9.6 9.3 9.0 9.2 9.0 8.9 8.9 8.6 8.3 8.1 7.9 7.8 8.0 7.8 1.6 2.0 1.8 -0.9 -1.4 2.9 8.0 1.8 -3.0 3.8 1.4 0.6 0.6 1.7 2.0 -0.3 -1.9 1.0 0.7 0.6 0.7 0.6 1.0 5.3 1.2 0.6 0.9 0.6 0.7 0.8 0.5 0.5 0.5 0.5 4.0 4.0 3.7 4.9 3.5 4.2 4.5 4.3 4.1 5.8 3.4 3.3 3.6 3.4 3.6 4.6 3.4 4.2 4.1 3.7 3.0 3.8 4.4 4.3 4.1 2.5 4.1 4.2 4.1 3.6 3.2 2.9 2.3 3.1 2.4 2.5 2.0 1.6 1.9 2.7 2.6 2.5 2.2 1.8 2.1 2.5 2.6 2.0 1.7 2.0 1.6 3.6 1.7 -0.5 2.2 1.6 0.5 1.7 0.3 0.2 -0.2 2.4 3.8 4.2 2.8 2.5 2.3 2.9 1.7 1.6 1.4 1.6 1.1 2.3 2.2 2.1 1.6 2.4 1.4 1.7 1.7 1.6 1.5 1.6 2.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.8 3.3 5.0 -0.8 -0.9 6.1 5.5 4.5 -0.2 7.1 1.7 0.1 -0.4 1.7 2.0 -0.8 -0.7 20.6 19.3 23.1 18.8 19.7 22.8 24.4 18.7 14.2 22.4 22.8 19.8 21.6 21.6 20.2 19.8 20.1 76.9 79.1 76.6 78.4 77.1 76.5 76.4 75.2 69.8 71.9 73.0 74.2 72.7 74.4 74.9 76.9 76.8 58.3 60.1 59.5 61.7 63.3 63.9 65.6 65.9 66.1 65.8 68.3 72.1 76.3 79.1 81.6 83.8 86.7 6.3 6.5 6.4 6.7 6.9 6.9 7.0 7.0 7.1 7.0 7.3 7.7 8.1 8.4 8.7 8.9 9.9 14.4 13.4 13.0 11.8 9.9 16.9 18.2 13.6 9.7 14.5 13.0 13.4 15.4 13.1 12.5 12.7 10.4 Sources of data: SORS, PDII, ESS. Notes: 'In January 2005, the SORS adopted new methodology of obtaining data on persons in paid employment. The new source of data for employed and self-employed persons excluding farmers is the Statistical Register of Employment (SRE), while data on farmers are forecast using the ARIMA model based on quarterly figures for farmers from the Labour Force Survey. 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. Slovenian Economic Mirror, October 2008 46 Statistical Appendix WAGES AND INDICATORS OF OVERALL COMPETITIVENESS 2005 2006 2007 2007 2008 2007 Q1 Q2 Q3 Q4 Q1 Q2 1 2 3 GROSS WAGE PER EMPLOYEE, y-o-y growth rates, % Total 4.8 4.8 5.9 5.4 5.6 5.8 6.7 7.8 8.6 6.4 4.8 5.0 Private sector (A to K) 5.4 5.4 6.9 6.3 6.3 6.7 8.1 8.3 9.4 7.7 5.8 5.5 Agriculture, fishing (A, B) 3.9 5.6 8.2 6.2 8.0 7.3 11.2 10.1 8.8 8.2 5.3 5.1 A Agriculture 3.7 5.6 8.2 6.4 8.0 7.3 11.0 10.2 8.8 8.4 5.5 5.5 B Fishing 6.9 7.9 8.0 -3.8 8.2 8.2 17.5 6.8 7.7 3.3 -2.7 -11.4 Industry, construction (C to F) 5.8 5.5 6.5 5.7 5.8 6.3 8.1 8.0 9.5 7.5 5.1 4.5 C Mining and quarrying 6.3 4.5 7.0 3.6 4.3 6.0 13.4 10.1 14.1 4.2 3.2 3.4 D Manufacturing 5.8 5.5 6.8 5.9 5.9 6.8 8.4 8.2 9.7 7.8 5.3 4.5 E Electricity, gas & water supply 9.7 5.6 6.2 3.0 5.0 5.5 10.7 9.0 9.4 4.6 2.8 1.6 F Construction 4.8 6.2 6.5 7.1 6.7 5.6 6.6 7.5 9.5 8.4 6.4 6.6 Production services (G to I) 4.7 5.0 7.0 7.3 6.4 6.8 7.2 7.9 8.9 8.0 6.7 7.1 G Distributive trades 4.8 5.6 7.6 8.0 7.4 7.5 7.4 7.4 9.0 9.1 6.7 8.3 H Hotels & restaurants 3.2 4.4 6.0 4.0 5.3 5.4 8.7 10.1 10.3 3.9 2.7 5.4 I Transport, storage & communications 5.1 3.6 5.7 6.7 4.4 5.6 5.9 7.7 7.9 6.9 7.9 5.3 Business services (J to K) 3.9 4.7 6.8 5.7 6.2 6.8 8.3 8.8 9.4 7.0 5.2 5.0 J Financial intermediation 6.7 7.2 7.3 7.9 7.8 5.7 7.4 8.1 8.8 8.7 9.1 6.0 K Real estate 3.2 3.9 7.2 5.3 6.1 7.8 9.4 9.5 10.1 6.8 4.0 5.1 Public services (L to O) 3.3 3.5 4.1 3.5 4.6 4.4 3.8 7.1 7.0 3.6 2.8 4.2 L Public administration 3.2 3.1 5.1 2.5 4.9 6.5 6.4 11.1 10.8 2.6 1.7 3.2 M Education 4.8 4.8 3.9 4.8 5.7 3.1 2.4 5.5 5.8 4.9 4.5 4.9 N Health & social work 2.2 2.7 3.2 2.7 3.7 4.0 2.4 6.1 4.8 3.2 1.9 3.0 O Other community, social & personal services 2.7 2.1 3.9 4.1 2.9 3.9 4.5 4.5 6.7 2.9 2.3 7.0 INDICATORS OF OVERALL COMPETITIVENESS, 2001=100 Effective exchange rate ', nominal 93.9 94.1 94.9 94.4 94.8 94.9 95.4 95.6 95.9 94.3 94.5 94.5 Real (relative consumer prices) 104.9 105.7 108.1 105.7 107.8 108.7 110.1 110.4 112.3 105.7 105.3 106.0 Real (relative producer prices)2 102.5 101.6 103.7 103.5 103.3 103.5 104.7 104.9 104.9 103.4 103.5 103.5 USD/EUR 1.2448 1.2557 1.3706 1.3105 1.3482 1.3745 1.4494 1.4998 1.5620 1.2999 1.3074 1.3242 Slovenian Economic Mirror, October 2008 47 Statistical Appendix 2007 2008 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 5.9 5.8 5.2 6.9 5.7 4.9 6.6 7.1 6.5 6.1 9.3 8.0 9.5 7.6 8.8 8.7 9.8 6.9 6.4 5.5 7.6 6.8 5.6 8.2 8.4 7.6 6.9 9.4 8.5 10.7 8.2 9.5 10.1 7.2 9.4 8.6 6.0 8.5 8.8 4.6 8.4 15.1 9.5 8.5 15.2 6.8 9.4 8.9 8.1 12.7 6.3 9.4 8.7 5.9 8.5 8.7 4.6 7.9 15.2 9.5 8.7 15.5 6.7 9.6 8.9 7.9 12.7 6.3 9.9 5.3 9.5 8.6 12.4 3.5 30.6 13.0 10.0 2.5 4.4 14.0 -1.3 10.2 14.8 12.5 5.7 6.7 5.8 5.0 7.3 6.3 5.5 7.8 8.7 7.8 6.2 9.8 8.1 11.2 8.2 9.2 10.8 6.3 3.3 4.7 4.8 6.6 3.9 7.5 9.5 10.2 21.6 5.9 10.4 14.1 12.3 17.7 12.3 17.5 10.2 7.1 5.7 5.1 7.5 6.9 6.0 7.9 9.2 8.0 6.1 10.2 8.5 11.2 8.4 9.5 10.8 6.5 4.2 3.0 7.7 3.5 5.2 7.7 11.1 11.2 9.6 8.1 10.8 8.3 12.1 8.5 7.7 14.1 6.9 7.5 8.1 4.5 8.5 5.3 3.1 6.7 7.4 5.6 7.3 8.6 6.6 11.9 7.3 9.5 9.9 6.0 7.4 6.0 5.9 7.5 7.1 5.9 7.2 6.7 7.7 7.3 8.2 8.1 9.7 7.8 9.1 8.9 8.4 8.6 6.8 6.7 7.8 7.8 7.0 7.1 8.3 6.7 6.5 8.8 7.0 10.1 8.0 8.9 9.2 7.0 4.4 5.1 6.5 6.5 6.0 3.8 7.6 10.5 8.0 10.6 11.0 8.7 10.9 11.1 8.9 10.5 9.1 5.4 4.1 3.8 6.9 5.7 4.0 6.6 2.6 9.1 7.5 5.9 9.6 8.3 6.2 9.2 7.4 10.7 5.4 7.4 5.8 8.2 7.2 5.1 10.1 8.7 6.3 7.4 9.3 9.8 10.4 8.0 9.9 9.3 7.0 6.5 9.9 7.0 8.5 7.1 1.6 13.9 8.0 1.0 6.7 6.7 10.7 12.0 6.6 7.9 6.9 6.5 5.6 6.8 5.8 8.4 7.6 7.3 8.7 9.8 9.6 8.1 10.8 9.6 10.0 9.1 11.3 10.7 7.6 4.1 4.7 4.9 5.8 3.5 3.8 3.3 3.9 4.1 4.5 9.6 7.2 7.0 6.7 7.5 5.8 16.6 3.8 5.2 5.7 8.7 4.9 5.9 5.9 6.5 6.9 6.8 14.3 12.0 12.0 10.0 10.4 7.6 18.9 5.5 6.4 5.1 4.3 2.6 2.4 2.3 2.6 2.2 3.1 7.8 5.6 5.7 5.6 6.0 5.0 10.8 3.2 3.4 4.3 5.4 3.3 3.3 2.1 2.0 3.0 3.6 8.0 6.7 3.8 4.4 6.2 4.8 24.2 2.9 1.9 3.9 4.5 3.1 4.0 3.0 5.1 5.3 5.0 6.9 1.8 5.9 6.7 7.3 6.0 11.1 94.7 94.8 94.9 95.0 94.8 95.0 95.3 95.4 95.4 95.5 95.4 95.8 96.0 95.9 95.8 95.7 95.3 106.9 108.1 108.4 108.5 108.6 109.0 109.6 110.3 110.3 110.4 109.8 111.1 111.9 112.3 112.7 112.3 111.3 103.2 103.3 103.4 103.2 103.2 104.0 104.7 104.7 104.8 105.0 104.8 105.1 105.6 104.6 104.4 104.0 104.1 1.3516 1.3511 1.3419 1.3716 1.3622 1.3896 1.4227 1.4684 1.4570 1.4718 1.4748 1.5527 1.5750 1.5557 1.5553 1.5770 1.4975 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. 'Change 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, October 2008 48 Statistical Appendix PRICES 2005 2006 2007 2007 2008 2007 Q1 Q2 Q3 Q4 Q1 Q2 Q3 1 2 3 CPI, y-o-y growth rates, % 2.5 2.5 3.6 2.3 3.0 3.6 5.4 6.6 6.6 6.1 2.7 2.1 2.3 Food, non-alcoholic beverages -0.8 2.3 7.8 3.7 6.5 8.2 12.6 14.0 12.0 9.8 4.0 3.0 3.9 Alcoholic beverages, tobacco 3.9 3.7 6.5 5.5 6.0 8.0 6.5 5.4 5.0 0.7 5.5 5.4 5.6 Clothing and footwear -1.0 -0.5 2.1 1.8 0.9 3.3 2.5 4.9 5.2 2.1 3.6 2.6 -0.5 Housing, water, electricity, gas 9.1 5.3 2.6 -0.2 1.0 2.2 7.6 10.5 11.4 11.5 -0.1 -0.9 0.4 Furnishings, household equipment 3.6 4.1 4.5 5.0 5.2 3.6 4.0 4.5 5.5 6.5 5.1 5.3 4.7 Medical, pharmaceutical products -0.3 -1.7 1.1 1.5 1.4 1.1 0.4 -0.5 1.7 4.9 0.9 1.4 2.3 Transport 2.7 1.3 0.3 -0.2 0.8 -0.9 1.6 2.9 2.9 4.1 -0.4 -0.9 0.6 Communications 0.0 0.3 0.3 0.0 0.4 0.6 0.3 2.2 1.9 0.1 1.4 -0.7 -0.6 Recreation and culture 2.3 2.1 3.6 2.5 2.5 4.6 4.7 4.6 5.0 4.8 2.9 2.6 2.2 Education 7.1 3.1 1.9 1.1 0.6 2.2 3.6 4.7 5.4 4.8 0.5 1.5 1.1 Catering services 4.4 4.5 7.3 6.9 6.6 7.0 8.7 9.3 10.0 10.4 6.9 7.1 6.7 Miscellaneous goods & services 1.9 4.1 3.6 4.2 3.1 3.7 3.4 3.9 4.5 3.8 5.0 4.7 3.0 HCPI 2.5 2.5 3.8 2.6 3.3 3.7 5.5 6.5 6.4 6.2 2.8 2.3 2.6 Core inflation (trim mean) 2.3 2.8 2.3 1.6 2.0 2.5 3.1 4.4 4.4 4.1 2.0 1.3 1.5 Core inflation (excluding fresh food and energy) 1.0 1.1 2.6 1.9 1.9 2.9 3.9 4.7 4.9 4.7 2.3 1.9 1.5 PRODUCER PRICE INDICES, y-o-y growth rates, % Total 1.9 2.3 4.2 4.3 4.6 4.1 3.6 3.4 3.9 5.2 3.9 4.6 4.5 Domestic market 2.7 2.3 5.4 4.5 5.1 5.4 6.5 5.9 6.3 6.5 3.5 5.1 5.0 Non-domestic market 1.0 2.2 2.9 4.1 4.2 2.8 0.7 0.8 1.4 3.8 4.2 4.1 4.0 euro area 1.4 2.6 5.0 7.1 7.3 4.6 1.4 1.2 1.6 4.1 7.1 6.9 7.3 non-euro area 0.0 1.6 -0.5 -0.6 -0.6 -0.3 -0.5 0.1 1.0 3.4 -0.3 -0.3 -1.2 Import price indices 5.8 4.0 7.0 6.6 2.4 0.1 -0.2 0.3 3.8 7.8 6.6 6.7 PRICE CONTROL1, y-o-y growth rates, % Energy prices 11.8 8.0 0.6 -2.0 -0.1 -1.6 6.2 13.1 16.9 21.1 -0.4 -4.6 -0.8 Oil products 15.4 10.3 -0.9 -4.0 -2.2 -4.3 7.4 14.8 17.4 21.1 -2.0 -7.5 -2.3 Basic utilities 4.0 -2.6 -2.3 -6.3 -6.2 -3.7 8.4 1.4 1.3 -1.3 -7.4 -5.8 -5.8 Transport & communications 2.1 1.5 0.6 0.7 0.6 0.6 0.6 0.5 0.6 -1.3 0.7 0.8 0.6 Other controlled prices 4.5 2.6 2.9 3.0 2.6 3.0 3.0 1.4 1.7 1.7 2.4 3.3 3.4 Direct control - total 9.3 7.0 3.1 1.9 3.2 1.6 5.9 9.5 11.7 13.7 2.8 0.0 2.8 Slovenian Economic Mirror, October 2008 49 Statistical Appendix 2007 2008 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 2.6 2.9 3.6 3.8 3.5 3.5 5.1 5.7 5.6 6.4 6.5 6.9 6.5 6.4 7.0 6.9 6.0 5.5 6.3 6.3 6.9 7.6 6.9 10.0 13.3 11.7 12.9 13.9 14.6 13.5 12.3 12.1 11.6 12.2 10.1 7.2 5.7 6.2 6.0 8.1 8.5 7.6 6.5 6.6 6.6 5.7 5.5 5.1 4.8 5.0 5.1 -0.2 0.5 1.8 -0.7 1.0 2.4 2.7 4.1 3.1 1.8 3.5 2.1 2.9 4.8 6.7 7.0 4.6 4.1 0.8 1.7 3.7 1.0 0.4 1.7 1.9 3.2 1.4 6.7 8.2 8.0 11.7 9.6 10.4 9.3 11.4 13.4 13.6 10.4 10.5 4.8 5.2 5.7 4.5 3.3 3.0 3.6 4.1 4.3 4.0 4.3 5.2 5.7 5.7 5.2 5.9 6.4 7.3 1.4 1.1 1.7 2.0 0.7 0.8 0.8 0.5 0.0 -0.9 -1.2 0.5 1.4 1.7 1.9 4.5 5.0 5.1 0.4 0.4 1.5 0.9 -1.6 -1.9 0.4 2.5 1.9 2.8 2.7 3.1 2.1 2.4 4.4 4.9 3.7 3.7 -0.3 0.2 1.2 1.2 1.2 -0.7 -0.7 -0.2 1.9 1.0 2.8 2.9 2.8 1.5 1.5 0.7 0.5 -0.9 1.4 3.0 3.3 4.4 4.8 4.5 4.9 4.6 4.7 4.1 4.9 4.9 5.4 4.4 5.3 5.6 4.9 4.0 -1.1 1.4 1.4 1.4 1.4 3.7 3.6 3.6 3.6 3.4 3.8 7.0 7.0 4.6 4.6 4.6 4.6 5.0 6.6 6.8 6.4 6.5 7.0 7.6 7.9 9.6 8.6 9.2 9.4 9.4 10.1 9.9 10.1 10.7 10.4 10.0 2.9 3.1 3.2 3.3 4.0 3.8 3.0 3.6 3.6 3.6 3.8 4.2 4.7 4.4 4.5 4.0 3.7 3.6 2.9 3.1 3.8 4.0 3.4 3.6 5.1 5.7 5.7 6.4 6.4 6.6 6.2 6.2 6.8 6.9 6.0 5.6 1.7 1.9 2.5 2.5 2.3 2.5 2.7 3.3 3.2 4.2 4.3 4.6 4.3 4.4 4.4 4.7 4.0 3.6 1.5 1.9 2.4 2.6 2.9 3.0 3.7 4.0 4.0 4.2 4.9 5.1 5.3 4.9 4.7 5.1 4.7 4.5 4.7 4.7 4.6 4.3 4.2 3.9 3.7 3.5 3.4 3.5 3.4 3.3 3.3 3.7 4.6 5.2 5.6 4.8 4.9 5.1 5.2 5.2 5.3 5.8 6.3 6.8 6.3 6.5 5.6 5.7 6.1 6.3 6.5 6.9 7.0 5.7 4.4 4.3 3.9 3.4 3.0 1.9 1.1 0.3 0.6 0.5 1.2 0.8 0.4 1.0 2.7 3.5 4.2 3.9 7.6 7.6 6.7 5.5 4.7 3.8 2.1 1.1 0.9 0.8 1.9 1.0 0.4 0.8 3.5 3.9 4.6 3.7 -0.7 -0.8 -0.5 0.0 0.3 -1.1 -0.4 -1.1 0.1 -0.2 -0.1 0.5 0.4 1.3 1.1 2.5 3.3 4.3 7.0 6.7 6.1 2.9 3.6 0.8 -0.2 0.0 0.5 -0.7 -0.1 0.1 -0.3 0.5 0.7 3.5 3.2 4.6 -0.3 -1.0 0.9 1.3 -2.6 -3.6 2.2 8.4 7.9 12.4 12.1 14.8 11.9 15.5 23.2 24.8 20.0 18.4 -2.6 -3.3 -0.8 -0.8 -5.5 -6.6 2.1 10.3 9.8 14.0 14.1 16.4 12.6 15.3 24.1 25.5 20.0 17.7 -6.5 -6.0 -6.0 -6.0 0.7 -5.7 14.3 6.5 4.8 2.8 0.7 0.7 1.3 1.3 1.3 1.3 -5.7 0.7 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.6 0.5 0.4 0.6 0.6 0.6 0.6 -1.3 -1.3 -1.3 3.1 2.4 2.3 2.2 3.8 3.0 3.0 2.9 2.9 2.1 1.2 1.0 1.2 1.9 1.9 1.1 1.6 2.4 3.1 2.6 4.0 4.3 2.9 -2.3 3.9 7.1 6.6 9.3 8.8 10.4 8.5 10.8 15.7 16.3 12.2 12.4 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. Slovenian Economic Mirror, October 2008 50 Statistical Appendix BALANCE OF PAYMENTS 2005 2006 2007 2007 2008 2007 Q1 Q2 Q3 Q4 Q1 1 Q2 12 3 BALANCE OF PAYMENTS, in EUR m Current account -498 -77' -',455 -96 -2'6 -480 -663 -549 -48' '7 -'09 -3 Goods' -',026 -','5' -',666 -242 -359 -40' -664 -503 -653 -82 -80 -80 Exports '4,599 '7,028 '9,798 4,783 5,027 4,927 5,062 5,'30 5,407 ',47' ',5'4 ',798 Imports '5,625 '8,'79 2',464 5,025 5,386 5,328 5,726 5,634 6,060 ',553 ',594 ',878 Services 920 993 ','93 275 366 354 '98 343 50' '23 56 97 Exports 3,214 3,572 4,29' 897 ',038 ',307 ',049 ',093 ',273 32' 254 323 Imports 2,293 2,580 3,098 622 672 953 85' 75' 772 '98 '98 226 Income -295 -440 -708 -52 -'88 -356 -''2 -222 -232 -'6 -'6 -20 Receipts 647 872 ','69 234 293 298 344 293 324 76 75 82 Expenditure 942 ',3'2 ',877 286 48' 654 456 5'5 556 92 9' '02 Current transfers -97 -'73 -274 -76 -34 -78 -86 -'67 -97 -7 -69 0 Receipts 738 785 905 '97 237 2'9 252 '80 204 5' 59 87 Expenditure 835 958 ','78 273 27' 296 338 347 30' 58 '28 87 Capital and financial account 970 ',092 ',7'3 28' '77 339 9'5 4'5 840 -'87 220 249 Capital account -''4 -'3' -52 '5 -27 -32 -8 -2 -2' '8 6 -9 Financial account ',084 ',223 ',765 266 204 37' 923 4'8 862 -205 2'4 258 Direct investment -43 -'74 -269 -248 -64 -4 47 '55 -''4 -'35 2 Domestic abroad -5'6 -687 -',3'9 -326 -296 -439 -257 -'58 -326 -'07 -'57 -62 Foreign in Slovenia 473 5'3 ',050 79 232 435 304 3'3 3'5 -8 22 64 Portfolio investment -',3'3 -',442 -2,264 -624 -',204 377 -8'4 303 -',''7 -902 -'52 430 Financial derivatives -'0 -'3 -2' 2 -2 -'2 -'0 2 0 6 -4 ' Other investment 2,639 ',57' 4,'79 ',080 ',484 -22 ',636 38 ',909 620 628 -'68 Assets -',459 -',939 -4,877 -2,4'3 -455 -',405 -605 -989 -'92 -734 -836 -843 Commercial credits -226 -442 -394 -385 -'80 32 '39 -508 -'64 -27 -'64 -'94 Loans -340 -733 -',890 -372 -456 -435 -627 53 -440 -2' -90 -26' Currency and deposits -872 -743 -2,60' -',675 '82 -990 -''8 -526 369 -754 -575 -345 Other assets -22 -2' 7 '8 0 -'2 ' -9 42 68 -7 -43 Liabilities 4,098 3,5'0 9,057 3,493 ',939 ',383 2,24' ',028 2,'0' ',355 ',464 675 Commercial credits 29' 479 503 269 55 -88 268 '75 297 -'72 2'8 223 Loans 2,73' 2,064 3,840 32 ',554 9'0 ',345 622 ',45' '46 -52 -62 Deposits ',053 998 4,727 3,208 338 567 6'3 253 346 ',406 ',282 52' Other liabilities 23 -30 -'4 -'6 -7 -6 '6 -22 7 -25 '6 -6 International reserves2 -'89 ',28' '40 55 -11 32 64 -8' 80 '85 -'23 -7 Statistical error -473 -32' -258 -'85 39 '4' -252 '34 -359 '70 -''0 -245 EXPORTS AND IMPORTS BY END-USE OF PRODUCTS, in EUR m Export of investment goods ',392 ',680 ',933 456 508 466 504 523 578 '36 '34 '85 Intermediate goods 7,723 9,368 '0,438 2,609 2,670 2,560 2,593 2,75' 2,863 8'' 835 963 Consumer goods 5,282 5,709 7,0'4 ',647 ',746 ',790 ',858 ',746 ',84' 503 52' 623 Import of investment goods 2,'63 2,565 3,004 658 736 740 870 772 9'6 '98 2'' 249 Intermediate goods 9,764 '',3'9 '2,874 3,'52 3,2'2 3,'62 3,344 3,423 3,626 ',006 987 ','59 Consumer goods 3,877 4,456 5,609 ',238 ',446 ',4'3 ',508 ',457 ',5'4 359 402 477 Slovenian Economic Mirror, October 2008 51 Statistical Appendix 2007 2008 4 5 6 7 8 9 10 11 12 12 3 4 5 6 7 8 -105 -100 -10 -230 -93 -158 -173 -184 -306 -237 -183 -130 -104 -227 -150 -232 -250 -134 -146 -79 -89 -117 -195 -180 -191 -293 -194 -139 -170 -167 -291 -195 -219 -270 1,586 1,729 1,712 1,741 1,478 1,708 1,855 1,781 1,426 1,632 1,723 1,775 1,885 1,731 1,791 1,826 1,361 1,720 1,874 1,791 1,830 1,595 1,903 2,035 1,973 1,719 1,826 1,862 1,945 2,053 2,022 1,986 2,046 1,631 116 119 130 94 141 119 79 56 63 90 104 149 151 171 180 96 130 347 337 354 443 465 399 382 307 360 354 352 387 414 413 446 523 497 230 218 224 349 324 280 303 251 297 264 248 238 263 242 266 427 367 -74 -43 -71 -210 -102 -44 -45 -28 -39 -72 -74 -76 -73 -74 -85 -90 -100 93 100 100 97 91 110 112 112 120 96 96 100 107 109 108 108 102 167 143 171 307 193 154 157 139 159 168 170 176 180 183 193 199 202 -14 -30 10 -25 -15 -38 -27 -22 -37 -61 -74 -32 -14 -33 -50 -19 -10 75 65 96 70 89 59 74 85 93 59 60 61 88 68 48 69 50 89 95 87 96 104 97 101 106 130 120 134 94 102 101 98 87 59 22 -66 221 323 19 -2 139 286 491 86 247 83 238 339 264 250 288 0 -7 -20 -11 3 -24 7 5 -20 6 2 -10 6 -6 -21 -11 2 22 -59 240 334 16 21 132 281 511 80 245 93 231 345 285 261 286 -43 -100 79 96 45 -145 99 -103 50 43 11 101 -43 6 26 -86 103 -148 -116 -32 -154 -61 -224 6 -159 -104 -41 -39 -77 -154 -134 -38 -208 -22 104 17 111 250 107 79 93 56 154 84 51 178 111 140 63 122 125 -414 -620 -169 234 119 24 -360 -490 36 18 688 -404 -424 -437 -256 133 -207 0 0 -2 -7 -5 -1 -11 0 1 3 3 -3 1 0 0 2 0 425 726 333 -121 -136 235 384 901 351 15 -494 518 613 760 537 285 286 -847 481 -89 -605 -360 -439 -302 -372 70 142 -955 -176 397 185 -775 184 -44 -97 -10 -73 31 155 -154 -233 -18 390 -74 -225 -208 -23 -95 -46 20 141 -48 -213 -194 -214 -148 -74 -131 -136 -359 174 -41 -80 18 -205 -254 257 -378 -685 701 165 -408 -371 -211 53 -217 45 28 -684 130 354 494 -479 -99 195 -16 3 13 -14 3 -1 8 -1 -6 14 -5 -18 48 -9 3 5 -2 1,272 245 423 484 225 674 686 1,273 282 -127 461 694 215 575 1,312 102 330 -19 89 -15 59 -303 156 163 97 8 -79 105 149 93 212 -8 27 -94 1,021 301 232 231 254 425 209 881 254 98 215 309 -175 492 1,134 108 218 279 -140 199 188 281 98 328 299 -14 -134 150 236 294 -128 180 -40 206 -9 -5 6 7 -8 -6 -14 -4 34 -13 -10 0 4 -2 5 7 0 55 -65 -1 132 -8 -91 20 -28 72 0 37 -118 85 16 -21 -73 104 84 166 -211 -93 74 160 34 -101 -185 151 -64 47 -133 -112 -114 -18 -37 159 176 174 166 140 160 180 165 159 146 178 199 194 193 191 201 N/A 854 921 895 918 778 864 959 927 707 892 933 926 1,015 913 935 954 N/A 545 592 610 619 520 651 679 653 526 556 580 610 635 584 622 621 N/A 229 265 242 246 199 295 303 299 268 248 251 273 315 309 292 287 N/A 1,016 1,119 1,077 1,105 955 1,102 1,161 1,185 998 1,116 1,146 1,161 1,224 1,215 1,187 1,244 N/A 478 494 475 478 424 511 576 492 440 466 473 518 515 499 500 516 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. Slovenian Economic Mirror, October 2008 52 Statistical Appendix MONETARY INDICATORS 2005 2006 2007 2007 AND INTEREST RATES 1 2 3 4 5 6 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 17.4 16.6 67 69 69 69 68 68 68 Central government (S. 1311) 780.5 776.6 2,367 3,184 3,219 2,944 2,748 2,574 2,465 Other government (S. 1312, 1313, 1314) 23.1 24.9 118 108 106 107 105 107 107 Households (S. 14, 15) 1025.9 1289.4 6,818 5,428 5,488 5,633 5,748 5,892 6,015 Non-financial corporations (S. 11) 2620.9 3236.0 18,105 14,086 14,250 14,660 15,142 15,426 15,788 Non-monetary financial institutions (S. 123, 124, 125) 230.9 368.1 2,305 1,554 1,563 1,574 1,761 1,747 1,911 Monetary financial institutions (S. 121, 122) 1408.2 1158.7 2401 3,505 2,770 2,267 2,033 2,257 2,211 Claims on domestic sectors, TOTAL In domestic currency 2099.2 2298.2 26,555 21,761 21,634 21,726 22,297 23,089 23,558 In foreign currency 2199.4 3149.0 1,990 1,048 1,100 1,160 1,248 1,335 1,456 Securities, total 1375.1 1286.8 3,570 5,055 4,662 4,299 3,992 3,577 3,484 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 2,610.3 2,903.4 20,029 17,823 17,912 17,914 18,066 18,367 18,446 Overnight 987.0 1,178.6 6,887 6,645 6,598 6,648 6,676 6,849 6,953 With agreed maturity -short-term 1,175.5 1,251.2 8,913 7,673 7,837 7,639 7,758 7,777 7,592 With agreed maturity -long-term 309.9 292.4 2,857 2,486 2,492 2,560 2,569 2,573 2,693 Short-term deposits redeemable at notice 137.8 181.2 1,372 1,019 985 1,067 1,063 1,168 1,208 Deposits in foreign currency, total 1,346.6 1,454.5 559 634 614 607 597 615 610 Overnight 534.8 552.7 218 311 293 285 264 280 274 With agreed maturity -short-term 481.2 545.5 248 240 239 237 251 248 249 With agreed maturity -lonq-term 295.2 318.3 56 64 64 62 60 61 60 Short-term deposits redeemable at notice 35.4 38.0 37 19 18 23 22 26 27 INTEREST RATES OF MONETARY FINANCIAL INSTITUTIONS, % New deposits in domestic currency Households Overnight deposits 0.47 0.32 0.36 0.33 0.33 0.33 0.34 0.34 0.34 Time deposits with maturity of up to one year 3.34 2.96 3.36 2.83 2.91 3.01 3.07 3.15 3.26 New loans to households in domestic currency Housing loans, 5-10 year fixed interest rate 4.99 4.56 5.80 5.16 5.44 5.50 5.35 5.37 5.36 New loans to non-financial corporations in domestic currency Loan over EUR 1 million, 1-5 year fixed interest rate 5.23 4.64 5.76 5.49 6.53 - - 4.86 5.12 INTEREST RATES OF THE EUROPEAN CENTRAL BANK, % Main refinancing operations | 2.02 2.78 3.85 3.50 3.50 3.75 3.75 3.75 4.00 INTERBANK INTEREST RATES EURIBOR 3-month rates 2.19 3.58 4.28 3.75 3.82 3.89 3.98 4.07 4.15 6-month rates 2.24 3.58 4.35 3.89 3.94 4.00 4.10 4.20 4.28 LIBOR CHF 3-month rates 0.80 1.51 2.55 2.15 2.21 2.26 2.32 2.41 2.55 6-month rates 0.87 1.65 2.65 2.26 2.32 2.36 2.44 2.54 2.70 Slovenian Economic Mirror, October 2008 53 Statistical Appendix 2007 2008 7 1 8 1 9 1 10 1 11 1 12 1|2|3|4|5|6|7|8 68 68 67 67 67 67 67 67 66 66 66 65 66 66 2,408 2,342 2,345 2,348 2,374 2,367 2,412 2,397 2,392 2,123 2,162 2,052 2,030 2,069 107 110 111 114 112 118 123 124 124 128 129 133 136 143 6,157 6,323 6,468 6,607 6,830 6,818 6,918 7,009 7,133 7,235 7,318 7,409 7,521 7,603 16,274 16,720 17,004 17,269 17,748 18,105 18,570 18,754 18,938 19,351 19,616 20,064 20,404 20,619 2,034 2,083 2,205 2,367 2,396 2,305 2,390 2,411 2,494 2,558 2,568 2,736 2,726 2,729 2,218 2,439 2,448 2,460 2,580 2,401 2,455 2,432 2,444 2,624 2,375 2,386 2,403 2,400 24,146 24,892 25,310 25,864 26,596 26,555 27,164 27,406 27,768 28,503 28,871 29,380 29,805 30,108 1,560 1,638 1,699 1,789 1,900 1,990 2,117 2,192 2,280 2,276 2,259 2,263 2,228 2,271 3,492 3,488 3,573 3,511 3,544 3,570 3,586 3,529 3,477 3,239 3,038 3,137 3,188 3,184 18,880 19,299 19,386 19,579 19,558 20,029 20,088 20,674 20,779 20,774 20,613 21,144 21,341 21,465 7,047 6,881 6,907 6,695 6,573 6,887 6,924 6,557 6,787 6,711 6,841 7,071 6,744 6,703 7,867 8,331 8,247 8,689 8,723 8,913 8,899 9,862 9,745 9,734 9,292 9,439 9,936 9,929 2,728 2,790 2,874 2,820 2,817 2,857 2,845 2,803 2,814 2,926 3,046 3,170 3,241 3,378 1,238 1,297 1,358 1,375 1,445 1,372 1,420 1,452 1,433 1,403 1,434 1,464 1,420 1,455 605 628 608 589 585 559 571 560 520 529 527 488 491 502 270 278 269 255 260 218 248 240 226 222 225 218 220 228 242 258 248 241 226 248 229 237 220 224 224 196 192 190 61 62 60 60 57 56 55 48 45 45 42 42 43 42 32 30 31 33 42 37 39 35 29 38 36 32 36 42 0.35 0.35 0.37 0.42 0.40 0.40 0.44 0.41 0.41 0.43 0.46 0.46 0.48 0.48 3.36 3.41 3.61 3.89 3.83 4.04 4.08 3.95 4.03 4.14 4.20 4.30 4.40 4.39 5.79 5.98 6.16 6.45 6.44 6.58 6.75 6.40 6.61 6.53 6.53 6.63 6.71 6.95 6.49 - 5.76 5.59 - 6.25 - - 5.63 6.32 5.47 6.63 6.91 6.53 4.00 1 4.00 1 4.00 1 4.00 1 4.00 | 4.00 | 4.00 | 4.00 | 4.00 | 4.00 | 4.00 | 4.00 | 4.25 | 4.25 4.22 4.54 4.74 4.69 4.64 4.85 4.48 4.36 4.60 4.78 4.86 4.94 4.96 4.97 4.36 4.59 4.75 4.66 4.63 4.82 4.50 4.36 4.59 4.80 4.90 5.09 5.15 5.16 2.72 2.80 2.82 2.79 2.75 2.77 2.70 2.74 2.83 2.85 2.78 2.84 2.79 2.75 2.85 2.86 2.90 2.89 2.85 2.84 2.77 2.77 2.87 2.93 2.89 2.98 2.94 2.89 Sources of data: BS, BBA - British Bankers' Association. Slovenian Economic Mirror, October 2008 54 Statistical Appendix PUBLIC FINANCE 2005 2006 2007 2007 2008 2007 Q1 Q2 1 Q3 Q4 Q1 1 Q2 1 1 2 1 3 CONSOLIDATED BALANCE OF PUBLIC FINANCING (GFS-IMF methodology), current prices, EUR m GENERAL GOVERNMENT REVENUES TOTAL REVENUES 1 1,976.1 12,958.7 14,006.1 3,063.2 3,454.0 3,429.1 4,059.8 3,354.3 4,005.6 1,060.6 958.7 1,043.9 Current revenues 11,517.2 12,395.3 13,467.2 2,955.0 3,374.9 3,332.1 3,805.1 3,274.5 3,881.0 1,034.4 926.2 994.4 Tax revenues 10,884.0 1 1,762.0 12,757.9 2,828.7 3,199.7 3,123.6 3,606.0 3,110.0 3,702.0 994.5 883.2 951.0 Taxes on income and profit 2,241.9 2,735.3 2,917.7 587.7 914.3 646.3 769.4 694.4 1,106.5 188.2 189.9 209.7 Social security contributions 3,987.7 4,231.2 4,598.0 1,083.4 1,123.7 1,139.1 1,251.8 1,203.1 1,254.2 358.4 360.5 364.6 Taxes on payroll and workforce 526.2 472.9 418.1 96.1 99.7 101.5 120.9 59.4 62.2 32.8 32.1 31.1 Taxes on property 170.4 189.1 206.4 22.2 58.0 67.3 59.0 27.5 62.6 6.2 7.9 8.1 Domestic taxes on goods and services 3,914.7 4,077.3 4,498.6 1,017.6 973.0 1,135.5 1,372.5 1,099.4 1,181.7 403.2 286.9 327.6 Taxes on international trade & transactions 39.1 50.7 117.1 21.5 30.7 33.2 31.7 25.6 33.7 5.5 6.3 9.7 Other taxes 4.0 5.4 2.1 0.3 0.4 0.7 0.7 0.6 1.0 0.3 -0.3 0.3 Non-tax revenues 633.3 633.3 709.2 126.3 175.2 208.6 199.1 164.5 179.0 39.9 43.0 43.4 Capital revenues 113.4 166.8 136.6 19.7 15.2 39.6 62.1 28.0 26.8 7.5 6.1 6.1 Grants 9.1 5.4 11.9 2.1 2.8 2.0 5.0 2.0 2.1 0.7 0.4 1.0 Transferred revenues 34.0 42.8 42.5 0.2 1.4 0.4 40.5 1.2 0.9 0.1 0.0 0.0 Receipts from the EU budget 302.4 348.4 348.0 86.2 59.6 55.1 147.1 48.5 94.8 17.9 26.0 42.3 GENERAL GOVERNMENT EXPENDITURES TOTAL EXPENDITURES 12,275.7 13,208.7 13,915.5 3,201.2 3,392.6 3,240.0 4,081.8 3,367.0 3,797.3 983.7 1,108.8 1,108.7 Current expenditures 5,353.9 5,689.0 5,950.9 1,482.0 1,448.5 1,362.2 1,658.2 1,570.0 1,586.0 489.3 473.2 519.5 Wages, salaries and other personnel expenditures 3,016.3 3,180.3 3,276.9 785.8 851.7 814.4 825.0 808.6 898.3 262.1 262.1 261.6 Expenditures on goods and services 1,911.0 2,073.2 2,212.2 490.3 482.6 518.0 721.3 528.3 602.2 192.1 146.0 152.2 Interest payments 372.1 376.4 357.0 197.5 105.3 17.5 36.7 221.0 69.8 32.4 62.4 102.7 Reserves 54.6 59.0 104.8 8.3 8.9 12.3 75.2 12.1 15.8 2.6 2.7 3.0 Current transfers 5,598.6 5,925.8 6,143.9 1,457.2 1,665.6 1,456.0 1,565.1 1,489.9 1,856.8 434.9 507.9 514.4 Subsidies 381.2 402.9 423.4 104.4 137.9 88.3 92.8 60.5 243.0 6.7 54.8 42.8 Current transfers to individuals and households 4,628.6 4,871.5 5,093.3 1,219.0 1,359.2 1,211.1 1,304.0 1,303.4 1,448.9 388.1 415.5 415.5 Current transfers to non-profit institutions, other current domestic transfers 563.1 624.1 595.3 130.9 158.4 145.3 160.8 118.7 151.3 39.7 35.5 55.6 Current transfers abroad 25.7 27.4 32.0 2.9 10.2 11.3 7.6 7.2 13.6 0.3 2.1 0.5 Capital expenditures 654.2 901.4 1,130.5 133.4 162.9 266.9 567.3 148.8 215.9 44.7 46.3 42.4 Capital transfers 383.4 404.6 334.3 28.6 55.0 69.3 181.4 30.6 62.3 6.5 9.4 12.7 Payments to the EU budget 285.6 287.9 355.9 100.0 60.6 85.6 109.8 127.7 76.2 8.3 71.9 19.7 SURPLUS / DEFICIT -299.6 -250.0 90.6 - - - - - - - - - Slovenian Economic Mirror, October 2008 55 Statistical Appendix 2007 2008 4 1 5 1 6 1 7 1 8 1 9 1 10 1 11 1 12 1 1 2 1 3 1 4 1 5 1 6 1 7 1,293.0 1,172.5 988.5 1,182.3 1,222.7 1,024.1 1,323.7 1,323.1 1,413.0 1,119.1 1,100.1 1,135.1 1,463.1 1,259.8 1,282.7 1,342.2 1,272.6 1,158.0 944.3 1,159.9 1,168.9 1,003.3 1,259.4 1,236.3 1,309.4 1,104.6 1,073.5 1,096.4 1,435.8 1,228.7 1,216.6 1,306.2 1,219.0 1,094.2 886.5 1,089.8 1,099.5 934.2 1,194.1 1,168.1 1,243.8 1,057.4 1,015.6 1,037.0 1,374.1 1,175.5 1,152.4 1,253.4 462.9 288.3 163.1 168.7 251.4 226.3 233.4 235.7 300.3 223.0 221.2 250.1 498.3 316.7 291.5 297.9 371.1 371.9 380.7 379.2 377.9 382.1 385.1 397.3 469.4 394.7 400.0 408.4 419.0 415.8 419.5 425.8 32.8 32.4 34.5 34.1 33.6 33.9 34.1 36.5 50.3 20.0 19.5 19.9 20.9 20.4 20.9 21.3 10.7 27.2 20.0 20.8 31.4 15.2 16.3 29.3 13.3 8.7 10.5 8.3 12.0 28.6 22.1 23.0 332.5 363.3 277.2 475.4 395.4 264.6 514.5 459.9 398.0 404.6 354.7 340.1 411.5 383.4 386.9 475.3 8.9 11.0 10.7 11.5 9.6 12.0 10.4 9.1 12.2 6.3 9.3 9.9 12.3 10.5 10.9 9.8 0.1 0.2 0.2 0.1 0.3 0.3 0.2 0.3 0.2 0.2 0.2 0.2 0.2 0.2 0.7 0.3 53.6 63.8 57.9 70.1 69.4 69.0 65.3 68.1 65.7 47.2 58.0 59.4 61.6 53.1 64.3 52.8 6.0 4.1 5.1 13.5 17.1 8.9 14.6 15.7 31.9 11.1 9.6 7.3 6.1 5.8 14.9 12.9 0.7 0.7 1.4 0.7 -0.1 1.4 1.4 0.8 2.8 0.8 0.7 0.5 0.8 0.5 0.8 1.6 0.3 1.0 0.1 0.1 0.2 0.1 0.8 39.7 -0.1 0.4 0.1 0.7 1.1 -0.4 0.2 0.1 13.4 8.7 37.5 8.1 36.6 10.4 47.6 30.6 69.0 2.2 16.1 30.2 19.3 25.3 50.2 21.5 1,061.8 1,242.4 1,088.3 1,094.3 1,090.3 1,055.3 1,140.5 1,249.6 1,691.7 1,009.1 1,140.4 1,217.5 1,229.5 1,366.9 1,200.8 1,139.6 506.4 506.3 435.8 450.8 463.5 447.9 483.8 500.7 673.7 445.4 512.3 612.3 529.5 548.3 508.2 507.2 261.8 321.9 268.0 271.1 273.7 269.6 266.2 273.5 285.3 264.1 262.9 281.6 274.5 336.9 286.8 289.3 155.1 169.3 158.2 170.2 183.4 164.4 187.4 212.1 321.9 153.9 171.7 202.7 188.9 204.5 208.8 207.2 87.1 12.0 6.2 6.8 3.3 7.4 26.6 4.9 5.2 22.9 74.2 123.9 61.4 2.5 5.8 4.9 2.4 3.1 3.4 2.7 3.2 6.5 3.7 10.3 61.3 4.4 3.5 4.1 4.6 4.3 6.8 5.9 468.2 639.5 557.8 525.2 467.0 463.7 473.7 547.1 544.3 460.5 517.3 512.0 580.1 707.5 569.2 513.9 10.0 39.7 88.2 57.3 13.0 18.0 18.0 25.6 49.2 5.0 35.0 20.6 86.7 83.7 72.6 16.6 409.2 537.7 412.2 406.4 403.6 401.1 405.0 470.5 428.5 418.1 441.1 444.3 445.0 566.4 437.5 442.1 48.5 54.7 55.2 57.6 47.1 40.6 49.6 48.9 62.3 35.7 37.7 45.3 46.2 50.5 54.5 54.0 0.6 7.3 2.3 4.0 3.3 4.0 1.1 2.2 4.3 1.8 3.5 1.9 2.2 6.9 4.6 1.3 46.6 55.6 60.7 72.2 104.2 90.5 117.3 121.0 329.0 53.6 44.8 50.4 69.3 68.4 78.1 77.7 16.5 19.3 19.2 22.3 23.2 23.8 35.6 49.4 96.3 9.0 10.8 10.8 18.9 19.2 24.3 21.8 24.1 21.6 14.8 23.7 32.4 29.5 30.1 31.3 48.4 40.6 55.3 31.9 31.7 23.6 20.9 18.9 - - - - - - - - - - - - - - - - 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. Data prior to 2007 are recalculated on the basis of the irrevocable SIT/EUR exchange rate = 239.64. 56 Slovenian Economic Mirror, October 2008 Acronyms Acronyms Acronyms in the text BS - Bank of Slovenia CONS - Consensus forecasts EC - European Commision ECB - European Central Bank EIA - Energy Information Administration ELES - Electro Slovenia EU - European Union FED - Federal Reserve System HICP - Harmonised Index of Consumer Prices IMAD - Institute of Macroeconomic Analysis and Development MF - Ministry of Finace NFI - non-monetary financial institutions OECD - Organization for Economic Cooperation and Development SBI - Slovenian Stock Exchange Index SITC - Standard International Trade Classification SMA -Securities Market Agency SORS - Statistcal Office of the Republic of Slovenia ZSS - Employment Service of Slovenia Acronyms of Standard Classification of Activities (SCA) A-Agriculture, hunting, forestry, B-Fishing, C-Mining and quarrying, D-manufacturing, DA-food beverages and tobacco, DB-textiles and textile products, DC-leather and leather products, DD-wood and wood products, DE-paper, publishing, printing, DF-coke, petroleum products and nuclear fuel, DG-chemicals, DH-rubber and plastic products, DI-non-metal mineral products, DJ-metals and metal products, DK-machinery and equipment, DL-electrical and optical equipment, DM-transport equipment, DN-furniture and NEC, E-Electricity, gas and water supply, F-Construction, G-Wholesale, retail, trade, repair, H-Hotels and restaurants, I-Transport, storage, communications, J-Financial intermediation, K-Real estate, renting and business activities, L-Public administ. & defence; comp. soc. sec., M-Education, N-Health and social work, O-Other social and personal services. Acronyms of Countries AT-Austria, BE-Belgium, BG-Bulgaria, BY-Belarus, CH-Switzerland, CZ-Czech Republic, CY-Cyprus, DE-Germany, DK-Denmark, ES-Spain, EE-Estonia, EL-Greece, FR-France, FI-Finland, HU-Hungary, I-Italy, IE-Ireland, JP-Japan, LU-Luxembourg, LV-Latvia, LT-Lithuania, MT-Malta, NL-Netherlands, NO-Norway, PT-Portugal, RO-Romania, RU-Russia, SE-Sweden, UA-Ukraine, UK-United Kingdom, US-United States of America, PL-Poland, SI-Slovenia, SK-Slovakia. 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