Slovenian economic mirror No. 5, Vol. XXV, 2019 Slovenian Economic Mirror No. 5 / Vol. XXV / 2019 Publisher: IMAD, Ljubljana, Gregorčičeva 27 Responsible Person: Marijana Bednaš, MSc, Director Editor in Chief: Tanja Kosi Antolič, PhD Authors of Current Economic Trends (listed alphabetically): Urška Brodar; Lejla Fajic; Marjan Hafner, MSc; Matevž Hribernik, MSc; Katarina Ivas, MSc; Mojca Koprivnikar Šušteršič; Tanja Kosi Antolič, PhD; Janez Kušar, MSc; Jože Markič, PhD; Tina Nenadič, MSc; Mitja Perko, MSc; Jure Povšnar; Denis Rogan; Dragica Šuc, MSc; Ana Vidrih, MSc Editorial Board: Marijana Bednaš, MSc; Lejla Fajic, Alenka Kajzer, PhD; Rotija Kmet Zupančič, MSc; Janez Kušar, MSc Translator: Marija Kavčič Data Preparation, Graphs, DTP: Bibijana Cirman Naglič Print: Eurograf d.o.o. Circulation: 80 copies ISSN 1318-3826 (print) ISSN 1581-1026 (pdf) © 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....................................................................................................8 Labour market............................................................................................................................................11 Prices..............................................................................................................................................................13 Balance of payments................................................................................................................................15 Financial markets.......................................................................................................................................16 Public finance .............................................................................................................................................18 Statistical appendix...............................................................................................................................19 The Economic Mirror is prepared based on statistical data available by 5 July 2019. On 1 January 2008, the new classification of activities of business entities NACE Rev. 2, which replaced NACE Rev. 1.1, came into force in all EU Member States. In the Republic of Slovenia the national version of the standard classification, SKD 2008, took effect. It includes the entire European classification of activities but also adds some national subclasses. All analyses in the Slovenian Economic Mirror are based on SKD 2008, except when the previous classification, SKD 2002, is explicitly referred to. For more information on the introduction of the new classification see the SURS website http://www.stat.si/eng/skd_nace_2008.asp. All current comparisons (at the monthly, quarterly levels) in the Slovenian Economic Mirror are made on the basis of seasonally adjusted data, while year-on-year comparisons are based on original data. Unless otherwise indicated, all seasonally adjusted data for Slovenia are calculations by IMAD. Slovenian Economic Mirror, No 4/2019 Selected topics 3 At the beginning of the second quarter, economic activity in Slovenia increased further in most activities, but the growth of industrial production was slower than at the beginning of the year amid more moderate imports. After the strong growth early in the year, manufacturing output increased further in most activities, but at a more moderate pace. This is at least partly related to lower growth in exports as a consequence of (i) fluctuations of exports in a small number of activities, especially the surge in the pharmaceutical industry at the beginning of the year, and (ii) lower growth of economic activity in main trading partners. More specifically, short-term indicators of economic activity for the euro area, where Slovenia exports more than half of all goods, indicate somewhat lower growth in economic activity in the second quarter than in the first, while expectations regarding future economic trends in the euro area continue to deteriorate. Activity in construction, which this year increased the most in the construction of buildings, remains relatively high; residential property prices are rising further. Due to adverse weather conditions, construction output deteriorated in April for the second consecutive month, though it remained high. The supply on the residential property market remains limited, despite this year's faster growth in the construction of buildings, and property sales are easing. Residential property prices continue to increase, though with signs of moderation in Ljubljana. With further growth in employment and stronger wage growth, households continue to increase their spending on the majority of goods. Employment is increasing further amid a significant lack of appropriately skilled labour mainly on account of the hiring of foreign workers, though also, to a somewhat lesser extent than in previous years, the hiring of the unemployed. Wage growth strengthened this year, which, alongside higher growth in social transfers and a further increase in household loans, continues to boost growth in private consumption. This is reflected in rapid turnover growth in accommodation and food service activities and further turnover growth in the sale of food and most non-food products, while sales of cars to natural persons have stagnated for more than a year. The growth of domestic consumption and the still relatively strong growth of international trade are reflected in the continuation of strong turnover growth in transportation, storage and several other service activities. The growth of imports is rising amid the increase in domestic consumption, which keeps the growth of international trade relatively high despite the moderation of export growth. This, alongside growth in domestic consumption, continues to boost turnover growth in transportation and storage activities. Turnover growth also remains high in administrative and support service activities, while moderating in professional and technical activities following a period of strong growth. With rising domestic demand and the related strengthening of growth in Slovenian goods imports, the large surplus on the current account is gradually falling. Despite strong growth in general government expenditure, the consolidated general government balance was higher year on year in the first five months. This was a consequence of further strong growth in revenues from taxes and social contributions, a smaller decline in non-tax revenues, and lower interest payments than in the same period of last year. The strong growth of expenditure was due primarily to higher expenditures on wages, social transfers and investment. In June inflation rose moderately, to 1.8%, being still main driven by prices of services. June's increase in year-on-year consumer price growth reflected higher growth in prices of goods, food in particular, and a smaller decline in clothing and footwear prices than in June 2018. The year-on-year growth of Slovenian industrial producer prices remained relatively low in May amid their further strengthening on the domestic market and a decline on foreign markets, where the demand is easing. The still relatively positive economic sentiment, though this continues to deteriorate especially in manufacturing, indicates a continuation of moderate economic growth in the coming months. Amid significant uncertainty in the international environment, confidence in manufacturing is deteriorating further, pointing to more moderate growth in the coming months than in the first quarter. The prospects for the part of the economy that is focused predominantly on the domestic market are more favourable. Confidence thus remains high in construction and service activities and among consumers. In the spotlight 4 In the spotlight Slovenian Economic Mirror, No 5/2019 I Short-term indicators suggest somewhat weaker euro area GDP growth in Q2 than in Q1. I Economic activity and growth slowed slightly in most sectors in Slovenia too. -Industrial pr. in manufacturing -Turnover in trade Value of construction output ESI (right axis) mm -Industrial production in man. -Turnover in trade Value of construction output -Merchandise exports -Turnover in services (nom.) Source: Eurostat; calculations by IMAD. Source: SURS; calculations by IMAD. 120 100 90 90 80 80 70 70 I Employment continues to increase, mainly on account of the hiring of foreign workers, but also of the unemployed. Employed according to SRE (left axis) -Registered unemployed (right axis) vor^coo^o^rNm^riovor^coo^ 0 0 0 0 1 1 1 1 1 1 1 1 1 1 Source: SURS, ESS; calculations by IMAD. I Strengthening wage growth and higher growth in social transfers are boosting further growth in private consumption. Household consumption -Wage bill, real -Social transfers, real -Household saving rate (right axis) Source: MF, SURS; calculations by IMAD. Note: In the wage bill and social transfers, data for Q2 2019 are the values for April and May. 880 140 o 860 120 .i 0 840 100 l 10 ^ ll 820 80 e n 20 ro 800 60 e 30 0 780 40 40 760 20 50 740 0 I Residential property prices also continue to rise, while property sales are slowing amid limited supply. -Transactions in existing residential properties (left axis) -Transactions in new residential properties (left axis) -Prices of existing residential properties (right axis) ^ -Prices of new residential properties (right axis) es m 200 ar I 180 a m 160 f 140 | 120 er s 100 3" 80 0,4 60 0 "il 40 § 20 0 20x 0 e d _ oooooooooooo Source: SURS; calculations by IMAD. I General government surplus was up year on year in the first five months amid strong growth in revenue and lower interest payments. I General government balance ■ Primary balance 2,000 1,500 1,000 500 E =5 0 jj c -500 -1,000 -1,500 -2,000 2011 2012 2013 2014 2015 2016 2017 2018 I-V I-V 2018 2019 Source: MF, Bulletin of Government Finance; calculations by IMAD. current economic trends Slovenian Economic Mirror, No 4/2019 International environment Current Economic Trends 7 I Figure 1: Economic sentiment indicator (ESI) for the euro area -Consumers -Construction -Economic sentiment in EMU (right axis 120 10 0 -10 110 100 90 Short-term indicators of euro area GDP growth point to somewhat weaker growth in the second quarter than in the first. Although the impact of certain one-off factors in the euro area has waned, elevated uncertainties (rising protectionism, increased possibility of an unregulated withdrawal of the UK from the EU, etc.) continue to hamper the acceleration of economic growth. After recovering in the first quarter, industrial production contracted in April, partly owing to a further decline in the volume of external trade. Turnover in retail trade and construction output in particular also swung downwards following the strong growth in the first quarter. The confidence indicators (ESI and PMI) for the euro area point to a continuation of similar trends in the coming months. Manufacturing confidence deteriorated significantly again in the second quarter, partly on account of the expected continuation of weak growth in global trade. Confidence in construction was somewhat lower than in the previous quarter, albeit still high. Consumer confidence and confidence in service activities also remained high. 20 20 80 30 70 40 60 £ I Figure 2: Required yields of 10-year government bonds -Slovenia -Germany -Austria -Italy -Spain -Portugal cccccccc Source: Eurostat, Bloomberg. Yields to maturity of euro area government bonds dropped further in the second quarter. The decline was to a great extent due to the announcement of the introduction of additional monetary policy measures of the ECB.1 In most euro area countries bond yields thus dropped to, or close to, record lows. The yield to maturity of the Slovenian bond declined to 0.52% (down 43 basis points quarter on quarter), while the spread between the Slovenian and German bond yields narrowed notably after widening in the previous quarter. 1 The third series of targeted longer-term refinancing operations (TLTRO III) announced by the ECB in March 2019. The parameters of operations were approved at the council meeting in June. On 6 June 2019 the ECB's governing council also decided to keep the key ECB interest rates unchanged until at least mid-2020, which is longer than announced in March (at least until the end of 2019). I Table 1: Brent crude oil prices, the USD/EUR exchange rate and EURIBOR average change, in %* 2018 V 19 VI 19 VI 19/V 19 VI 19/VI 18 I-VI 19/I-VI 18 Brent USD, per barrel 71.01 71.17 64.22 -10.0 -13.7 -6.5 Brent EUR, per barrel 60.17 63.07 56.03 -11.2 -13.0 -0.4 EUR/USD 1.181 1.118 1.129 1.0 -3.3 -6.7 3-month EURIBOR, in % -0.322 -0.312 -0.329 -1.7 -0.7 1.4 Source: EIA, ECB, EMMI Euribor; calculations by IMAD. Note: * in Euribor change in basis points. 8 Current Economic Trends Slovenian Economic Mirror, No 4/2019 Economic developments in Slovenia I Figure 3: Trade in goods -Exports -Imports fOfCfCfCfCfCfCfCfCfCfC Source: SURS; calculations by IMAD. Real exports of goods remained high after significant growth at the beginning of the year, while the growth of real imports of goods accelerated. In the first four months to April, exports were up 9.2% year on year. According to our estimate, high-technology industries made the greatest contribution to growth, particularly exports of medicinal and pharmaceutical products. The growth of imports was 12.3% during this period. It continued to arise mainly from higher imports of consumer and intermediate goods. Slovenia traditionally trades the most with countries in the EU (around 76% of exports and imports), but this year the share of trade with countries outside the EU increased somewhat, particularly with Switzerland, where pharmaceutical products account for a significant share (78% of goods trade). f Figure 4: Trade in services -Exports of services Imports of services 750 700 650 600 av llyg a 500 TO ç I 'o 450 TO f= s ,e 400 I 350 ^ 300 250 Exports of services continued to rise at the beginning of the second quarter, while the growth of services imports moderated. In the first four months of the year, nominal exports of services were up 9.5% year on year, driven primarily by 50% higher exports of construction services. Exports of travel services also recorded higher growth than in the same period of last year, while the growth of exports of transport services has slowed somewhat in recent months. Imports were up 3.5% year on year in the first four months, despite a decline in the last month of the period. As in exports, growth was mainly driven by imports of transport, travel and construction services. Imports of administrative and support service activities have dropped in recent months, particularly imports of technical, trade-related business services, which made a significant contribution to growth in total imports of services in 2017 and 2018. Source: BoS; calculations by IMAD. I Figure 5: Production volume in manufacturing -Seasonally adjusted data -3-month moving averages, seasonally adjusted In April manufacturing production increased further, following the surge at the beginning of the year. Its growth was mainly driven by high-technology industries, particularly, according to our estimate, the pharmaceutical industry. Production also strengthened in most other industries. In the first four months it was up 6.4% year on year on average, in addition to the pharmaceutical industry, the most in some industries of lower technological intensity (in the wood-processing and leather industries, the manufacture of other non-metallic mineral products, and the repair and installation of machinery and equipment). The production of motor vehicles was down year on year, while the production of some intermediate goods (particularly in the metal and rubber industries) remained roughly the same, to a great extent due to the slowdown in the EU car industry. Source: SURS; calculations by IMAD. Slovenian Economic Mirror, No 4/2019 Current Economic Trends 9 f Figure 6: Activity in construction -Seasonally adjusted data -3-month moving averages, seasonally adjusted Source: SURS; calculations by IMAD. The value of construction output declined in April but remained high. Following the strong growth at the beginning of the year, this partly on account of favourable weather conditions, it otherwise declined in March and April. The high level of activity is attributable to higher investments on the part of the Government, municipalities and infrastructure companies, but also to favourable results of the corporate sector and the lack of building in previous years. The value of the indicators of contracts, which suggest future activity in construction, increased this year. The values of the stock of contracts and new contracts, having declined towards the end of last year, strengthened again this year, the most in residential buildings. I Figure 7: Turnover in trade -Total -Wholesale trade Sale of motor vehicles Retail trade Turnover in trade remained high at the beginning of the second quarter; in the first four months it was more than a tenth higher year on year. This was a consequence of further growth in household consumption (particularly in the segments of household appliances and furniture, certain semi-durable goods, and also food products in recent months) and strong sales of motor vehicles. Turnover in wholesale trade remained high as well, after last year's acceleration, which had also been partly due to increased sales of some energy products. Source: SURS; calculations by IMAD. 220 200 !" 180 = □> 160 140 120 100 80 I Table 2: Selected monthly indicators of economic activity in Slovenia In % 2018 IV 19/III 19 IV 19/IV 18 I-IV 19/I-IV 18 Merchandise exports, real1 6.9 0.03 12.5 9.2 Merchandise imports, real1 8.5 8.13 26.9 12.3 Services exports, nominal2 10.3 3.93 13.5 9.5 Services imports, nominal2 7.0 -3.03 -0.6 3.5 Industrial production, real 4.9 1.73 5.74 4.94 - manufacturing 5.3 2.03 6.44 5.24 Construction -value of construction put in place, real 19.8 1.13 6.0 17.7 Distributive trades - real turnover 8.1 0.03 7.94 10.24 Market services (without trade) - nominal turnover 8.2 0.63 6.84 8.14 Sources: BoS, Eurostat, SURS; calculations by IMAD. Notes: 1 External trade statistics, deflated by IMAD, 2 balance of payments statistics, 3 seasonally adjusted, 4 working-day adjusted data. 10 Current Economic Trends Slovenian Economic Mirror, No 4/2019 I Figure 8: Nominal turnover in market services (other than trade) -Total * -Transportation and storage (H) -Information and communication activities (J) -Professional and technical activities (M) -Administrative and support service activities (N) -Accommodation and food service activities (I) S § 160 1 Ï 150 110 100 90 The growth of turnover in the majority of market services remained high at the beginning of the second quarter. In accommodation and food service activities, it accelerated slightly amid higher spending by both domestic and foreign guests. Higher growth was also recorded for turnover from sales of services outsourced to external providers. This has been the main factor of further strong turnover growth in administrative and support service activities, amid a decline of turnover in employment services. The growth of turnover in more export-oriented services, such as road transport and computer services, remained high. With turnover in telecommunications services dropping for the third consecutive month, the growth of total turnover in information and communication activities came to a halt. Meanwhile, turnover in professional and technical activities has maintained its level for several months. Source: SURS; calculations by IMAD. Note: * including real estate. oi 140 130 120 80 70 I Figure 9: Selected indicators of private consumption g £110 Real turnover in the sale of non-food products Real net wage bill Real social transfers Real turnover in the sale of food products Source: Ministry of finance, Ministry of Infrastructure, SURS; calculations by IMAD. Growth in household consumption continued at the beginning of the second quarter amid further growth in disposable income. In addition to the growth in net wages and social transfers (including pensions), the increase in household means also reflected strong growth in newly extended consumer loans. Household purchases of some durable goods thus strengthened further.2 Households also spent more on some semi-durable goods and on services related to leisure activities at home and abroad. Following a decline in the first half of 2018, purchases of food, beverages and tobacco products also continued to increase moderately. 2 Furniture and household appliances in particular, while the growth of purchases of passenger cars slowed following a five-year period of strong growth. 120 100 90 80 I Figure 10: Economic sentiment indicator -Economic sentiment -Manufacturing -Retail trade -Service activities -Construction -Consumers Source: SURS; calculations by IMAD. Economic sentiment deteriorated slightly in June. The further decline was again mainly due to the lower confidence in the manufacturing sector, which recorded deteriorations in the assessment of the current situation and of orders and expected imports and production. Confidence in construction and service activities did not change, following a period of decline, and remained above the long-term average. Consumer confidence, which has been fairly stable in recent times, has also remained relatively high. Slovenian Economic Mirror, No 4/2019 Current Economic Trends 11 Labour market I Figure 11: Number of employed persons and number of registered unemployed persons Employed according to SRE (left axis) -Registered unemployed (right axis) o "2 u "Ö ¡5 £ ° 0 CD 4- O O P 880 860 840 820 800 780 140 120 100 80 60 40 Employment continues to rise, albeit at a slower pace than in previous years. In the first four months of this year, the number of employed persons rose the most in manufacturing and construction. Labour shortages, amid high labour demand, continue to be reflected in increased hiring of foreigners, who already contribute more than two-thirds to total employment growth. The growth of employment is also due to the hiring of unemployed persons, but the number of the unemployed is falling more slowly than in previous years amid the already relatively low level of unemployment. At the end of June, 70,747 persons were registered as unemployed, 5.7% fewer than in the same period of 2018. Source: SURS, ESS; calculations by IMAD. 760 20 740 0 I Figure 12: Average gross earnings per employee -Private sector -Public sector -Total 10.0 7.5 5.0 2.5 0.0 -2.5 -5.0 Wage growth strengthened in the first four months of this year, this in line with expectations. In the private sector, wage growth was - in addition to economic and demographic factors (good business results, labour shortages and thus upward pressure on wages) - also due to the increase in the minimum wage at the beginning of the year. Wages rose the most in administrative and support service activities, accommodation and food service activities, trade, and manufacturing, i.e. the sectors with the greatest labour shortages and a high share of minimum wage recipients. In the public sector, wage growth mainly reflected strong growth in the government sector as a result of the higher valuation of most positions agreed at the end of last year, promotions and, to a lesser extent, the increase in the minimum wage. Source: SURS; calculations by IMAD. I Table 3: Indicators of labour market trends Change, in % 2018 IV 19/III 19 IV 19/IV 18 I-IV 19/I-IV 18 Persons in formal employment2 3.2 0.01 2.8 3.1 Registered unemployed -11.5 -0.71 -5.8 -5.8 Average nominal gross wage 3.4 -0.11 4.0 4.4 private sector 4.0 -0.41 4.0 4.2 public sector 3.0 -0.61 4.3 5.2 of which general government 2.3 -0.11 5.8 6.2 of which public corporations 4.8 -1.51 0.5 2.8 2018 IV 18 III 19 IV 19 Rate of registered unemployment (in %), seasonally adjusted 8.2 8.4 7.7 7.7 Sources: ESS, SURS; calculations by IMAD. Notes: 1 Seasonally adjusted. 2 Persons in paid employment, self-employed persons and farmers (SRDAP). 12 Current Economic Trends Slovenian Economic Mirror, No 4/2019 f Figure 13: Real unit labour costs (RULC) -Entire economy SI -----Entire economy EA* -Manufacturing SI -----Manufacturing EA* OOOOOOOOOOOO Source: Eurostat; calculations by IMAD. In the first quarter, wage growth exceeded productivity growth in most sectors. There were no major misalignments between growth in labour costs and productivity growth in 2018 as a whole, but in individual, more export-oriented parts of the economy cost pressures started to emerge gradually during the year. In the first quarter of this year, the movements towards higher wage than productivity growth were also reflected in most other sectors of the economy.3 A pronounced increase in real unit labour costs (RULC) was recorded particularly in manufacturing, where real productivity was down year on year for the third quarter in a row. RULC movements in manufacturing and the economy as a whole otherwise do not deviate significantly from the euro area average. 3 With the exception of construction and real estate activities. I Figure 14: Price and cost competitiveness -Price competitiveness (REER_hicp) -Cost competitiveness (REER_ulc) Source: ECB; calculations by IMAD. Note: *Growth In the REER denotes deterioration in competitiveness and vice versa. Price and cost competitiveness indicators were relatively stable at the beginning of this year. In the last quarter of 2018 and the first quarter of 2019, Slovenia recorded slightly higher growth in unit labour costs (ULC) than its main trading partners. The deterioration of cost competitiveness (REER_ulc) against non-euro area countries was mitigated to some extent by a slight depreciation of the euro against the basket of their currencies. Relative to competitors, there have also been no signs of major spillovers of cost pressures into final prices thus far. Inflation remained comparable to that in trading partners, which was reflected in the stability of the indicator of price competitiveness (REER_hicp). I Table 4: Indicators of price and cost competitiveness Year-on-year growth, in % 2015 2016 2017 2018 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Effective exchange rate1 Nominal -3.1 1.0 0.5 0.7 1.6 0.9 0.3 0.1 -0.5 -0.1 Real, deflator HICP -4.2 0.3 0.4 0.8 1.6 1.2 0.3 0.1 -0.7 -0.2 Real, deflator ULC -3.7 0.9 0.0 0.4 1.3 1.1 -1.1 0.3 -0.1 Unit labour costs, ecnomy and components Nominal unit labour costs 0.3 1.8 1.2 2.5 2.4 3.5 1.1 2.8 3.6 Compensation of employees per employee, nominal 1.3 3.0 3.1 4.0 3.9 4.6 3.3 4.1 4.3 Labour productivity, real 1.0 1.2 1.9 1.5 1.4 1.1 2.2 1.2 0.6 Real unit labour costs -0.7 1.0 -0.3 0.2 0.0 0.7 -1.4 1.3 1.4 Labour productivity, nominal 2.0 2.0 3.5 3.8 3.9 3.8 4.7 2.7 2.8 Source: SURS, ECB; calculations by IMAD. Note: 1 against 37 trading partners. A rise in the value indicates a loss in competitiveness. Slovenian Economic Mirror, No 4/2019 Current Economic Trends 13 Prices I Figure 15: Year-on-year price growth in Slovenia and in the euro area -Slovenia -Euro area Source: SURS, Eurostat. Year-on-year growth in consumer prices increased somewhat in June (by 1.8%). In addition to favourable economic conditions and rising household consumption, inflation continues to be largely driven by higher prices of services, particularly those related to housing, package holidays, and restaurants and hotels. The increase in June's inflation was to a large extent attributable to higher prices of goods, food in particular, the decline in clothing and footwear prices also being smaller than in previous years. Food prices, having largely been falling at the monthly level in June in previous years, rose by 0.3% this June (the strongest monthly growth since 2001), which is related to less favourable weather conditions in the spring. The contribution of prices of oil products was negative, unlike in the previous two months. I Figure 16: Year-on-year growth in Slovenian industrial producer prices on the domestic and foreign markets -Domestic market -Foreign market fOfCfCfCfCfCfCfCfCfCfD Source: SURS. The year-on-year growth of Slovenian industrial producer prices remained around 1% in May. Boosted by favourable developments in the Slovenian economy, price growth on the domestic market strengthened further, exceeding 2% year on year for the first time since August 2018. This was mainly due to the 15.1% higher prices in energy, gas and steam supply; prices of non-durable consumer goods were also higher year on year. The moderation of foreign demand had a negative impact on the movement of Slovenian producer prices on foreign markets, which were down year on year in May for the first time since September 2016, this by 0.3%. I Table 5: Consumer price growth, in % XII 18/XII 17 VI 19-VII 18/VI 18-VII 17 VI19/V19 VI19/VI18 I-VI19/I-VI18 Total 1.4 1.7 0.3 1.8 1.5 Food 0.5 1.5 0.4 2.2 0.7 Fuels and energy 3.8 4.7 -0.8 1.8 2.5 Services 3.0 2.8 1.0 2.9 3.0 Other1 -0.3 -0.1 0.0 0.7 0.3 Core inflation - excluding food and energy 1.2 1.2 0.6 1.7 1.5 Core inflation - trimmed mean2 1.5 1.5 0.2 1.6 1.4 Source: SURS. Ministry of Economic Development and Technology; calculations by IMAD. Notes: 1 Clothing, footwear, furniture, passenger cars, alcoholic beverages, tobacco, etc.; 2 an approach that excludes the share of extreme price changes in each month. 14 Current Economic Trends Slovenian Economic Mirror, No 4/2019 I Figure 17: Residential property prices and transactions -Transactions in existing residential properties (left axis) -Transactions in new residential properties (left axis) -Prices of existing residential properties (right axis) -Prices of new residential properties (right axis) a 200 CO £ 180 ro ct 160 I 140 E 120