Slovenian Economic Mirror J IMAD Economic Analyses/November 2007 No. 11, Vol. XIII Slovenian Economic Mirror presents current macroeconomic developments as well as selected economic, social and environmental issues. The publication consists of articles, which present the main economic indicators, assess the realisation of the spring and autumn forecasts, and monitor implementation of economic policies (earnings, public finance, prices, competitiveness, etc.). The periodical is published monthly, except in September. This issue of Slovenian Economic Mirror was prepared by: Lejla Fajić (In the Spotlight), Jure Brložnik (International Environment - USA, International Environment - EMU), Slavica Jurančič (Competitiveness), Jože Markič (Balance of Payments), Miha Trošt (Price Trends & Policy), Marjan Hafner (Money Market - Household Savings, Money Market - Loans), Tomaž Kraigher (Labour Market), Saša Kovačič (Earnings), Katarina Ivas (Manufacturing), Janez Kušar (Construction), Jure Povšnar (Energy Sector), Mateja Kovač (Fishing), Janja Pečar (Regional Demographic Trends), Maja Kersnik (Social Protection Expenditure), Tanja Čelebič (Science and Technology Students). Director: Boštjan Vasle. Editor in Chief: Luka Žakelj. Translator: Tina Potrato. Language Editing: Translation and Interpretation Division of the Secretariat-General of the Government of the RS. Technical Editor: Luka Žakelj. Statistical Appendix, Data Preparation & Graphs: Bibijana Cirman Naglič, Marjeta Žigman. Distribution: Katja Ferfolja. Printed by: Tiskarna Štrok. Concept & Design: Sandi Radovan, Studio DVA. Circulation: 610 copies. Institute of Macroeconomic Analysis and Development Gregorčičeva 27, 1000 Ljubljana (+386 1) 478 10 12 fax: 478 10 70 Editor in chief: luka.zakeli@gov.si Translator: tina.potrato@gov.si Distribution: publicistika.umar@gov.si SEM can be found on the Internet at http://www.gov.si/aindex/. Publication is included in Ebsco Publishing Database and Internet Securities Database. © Institute of Macroeconomic Analysis and Development, 2007. The contents of this publication may be reproduced in whole or in part provided that the source is acknowledged. Contents Slovenian Economic Mirror IMAD No. 11/2007 p. 2 In the Spotlight Economic activity in Slovenia shows signs of softening in the third quarter p. 3 International Environment - USA Significantly increased risks to further economic growth in the United States p. 4 International Environment -EMU Economic growth in the EMU set to moderate next year p. 5 Competitiveness Slovenia records a considerable deterioration in price competitiveness and a minor deterioration in cost competitiveness relative to other EMU countries p. 6 Balance of Payments In the third quarter export growth picked up, while import growth decelerated p. 7 Price Trends & Policy Year-on-year inflation rises amid faster growth of food and oil prices p. 8 Money Market -Household Savings Household savings in banks more than doubled in the nine months to September; inflows into mutual funds remain high p. 9 Money Market - Loans Enterprises partly replace borrowing abroad with borrowing at home p. 10 Labour Market The September increase in employment was underpinned by the business cycle and seasonal factors p. 11 Earnings September's decline in private sector earnings largely linked to the shorter working month p. 12 Manufacturing The growth of industrial production is moderating; its structure is improving p. 13 Construction As expected, construction activity slowed down in the third quarter p. 14 Energy Sector Slovenia's external trade in electricity has dropped by 15% this year p. 15 SELECTED TOPICS Fishing While marine catches declined again in 2006, fresh water breeding increased p. 19 Regional Demographic Trends The population ageing index continues to increase; the share of old people exceeds that of the young in all regions in 2007 p. 20 Social Protection Expenditure In the structure of social protection expenditure, the shares of funds for old age and sickness/health care contracted in 2005 p. 21 Science and Technology Students The number of science and technology students in Slovenia increased faster in 2000-2005, while their share was lower than the EU average pp. 22, 23 Data: (pp. A 1-A 12), Main indicators (p. A 13), International Comparisons (pp. A 14-15), Graphs (pp. A 16-17). Compared to the Selected indicators of current economic Latest previous month same period of previous year developments, change in % Data latest data pre-latest data pre-pre latest data Industrial production (value based) IX 15.0 8.0 8.7 8.5 Manufacturing IX 17.1 9.2 10.0 9.9 Electricity, gas and water supply IX -1.6 -9.3 -9.5 -10.5 Value of construction put in place, real terms IX 4.7 26.1 30.5 30.2 Exports of goods (nominal terms)1 IX 14.1 17.5 18.6 17.6 Imports of goods (nominal terms)1 IX 18.9 19.7 20.1 20.3 Real effective exchange rate2 IX 0.4 1.8 1.8 1.7 Gross wage per employee, real terms IX -1.6 2.5 2.7 2.8 Total household savings in banks3, nominal terms IX 0.5 11.5 11.4 11.0 General government revenue, real terms X 12.6 4.5 3.6 3.1 Number of persons in paid employment IX 0.6 3.5 3.5 3.4 Number of registered unemployed X 4.3 -17.6 -17.9 -18.0 Number of job vacancies X 7.0 7.6 5.7 6.5 Month current previous pre-previous Registered unemployment rate IX 7.2 7.4 7.6 Month current cumulative annual4 Consumer prices XI 0.9 5.2 5.7 Producer prices (domestic market) X 0.6 5.8 6.3 Sources of data: SORS, BS, ESS, estimates and calculations by IMAD. Notes: 1balance of payments' statistics; 2euro's exchange rate for Slovenia measured by relative consumer prices; the calculation of the effective exchange rate includes the currencies/prices of Slovenia's 17 trading partners (Austria, Belgium, Germany, Italy, France, Netherlands, Spain, Denmark, United Kingdom, Sweden, Czech Republic, Hungary, Poland, Slovakia, USA, Switzerland, Japan); weights are the shares of individual trading partners in Slovenian exports and imports of goods within manufacturing (5-8 SITC) in 2001-2003; exports are double weighted; 3the year-on-year growth rate is defined as the ratio between the stock at the end of the current month and the stock in the same month of the previous year; 4total in the last 12 months. In the Spotlight Slovenian Economic Mirror IMAD No. 11/2007 p. 3 Economic growth in the euro area remained favourable in the third quarter. According to Eurostat's first estimate, year-on-year real GDP growth (adjusted for the season and the number of working days) totalled 2.7% in the third quarter, slightly more than in the second quarter, yet less than at the end of 2006 and in the first quarter of 2007 (3.2%), when the euro area economy reached the peak of its business cycle. The higher year-on-year growth in the third quarter compared with the second quarter was underpinned by the larger contribution of export demand, while the contribution of domestic demand remained unchanged (see p. 5). According to the European Commission's November forecasts, economic growth in the euro area will continue to moderate gradually until the end of the year, while inflation will increase. The Commission's forecasts regarding economic activity do not diverge significantly from the earlier forecasts of the IMF and Consensus - perhaps they are slightly more optimistic. This seems to be related to the Commission's estimate that the pick-up in economic activity in the last two years has not only been underpinned by cyclical factors, but also by structural improvements supporting an increase in potential growth, which may have made EMU countries more resistant to external shocks. In addition, shifts in the geographical composition of European exports in favour of Asian and oil-exporting economies have also been under way, which could cushion the effect of the U.S. downturn and the strong euro on export demand. Inflation in the EMU began to increase in the autumn months. In November it reached the highest level since May 2001 (3.0%, year on year). According to EC and ECB estimates, food and oil price increases have been the main factor behind this rise. A decline to 2% is not to be expected until the third quarter of 2008 (see p. 5). A gradual moderation in economic activity is also being observed in Slovenia. Output in the manufacturing sector increased by a real 8.2% relative to the same period of 2006, having eased off slightly from the previous quarter (9.1%). This was largely due to September's results, when production increased by just 3.9% in comparison with September 2006 (which was one working day longer). The slowdown has hit medium-low and low technology industries, whereas production growth in high and medium-high technology industries, which are also highly export-oriented, has increased from quarter to quarter this year. A particularly high increase, linked to the expanding production of pharmaceutical products and transport equipment, was recorded in the third quarter (see p. 13). In our estimate the increased exports of vehicles can also explain the slight year-on-year acceleration in the nominal growth of total goods exports in the third quarter to 17.0%, from 16.1% in the second quarter (see p. 7). In line with expectations, construction activity (namely the construction of buildings) also eased in the third quarter (see p. 14). The booming economy is also expected to show up in the Christmas bonuses and hence somewhat faster wage growth in the fourth quarter, which was already assumed in the Autumn Forecast. In the first nine months of the year the gross wage per employee increased by a nominal 5.6%; 6.4% in the private sector and 4.2% in the public sector (see p. 12). The expected disbursements of Christmas bonuses and the higher number of working days in the private sector, coupled with the regular autumn promotions in the public sector, will result in slightly higher wage growth at the end of the year than indicated by nine-month data. Nevertheless, the wage increase in 2007 is not expected to exceed the autumn forecast (5.9%). This figure was also used in calculating the November pensions adjustment. Oil prices were the main factor in the consumer price increase in November, whereas food price increases eased off. Consumer prices increased by 0.9% in November, while the year-on-year price increase leaped from October's 5.1% to 5.7%. More than half of November's price increase is attributable to liquid fuels, whose contribution was the highest in two years. Also relatively high were the seasonal contributions of clothing and footwear. After food prices had been rising for several months, they moderated in November. Even so, the difference between this year's and last year's inflation is still largely attributable to the higher prices of food and liquid fuels. Inflationary expectations have been rising along with inflation, provoking concern that they will be incorporated in wage agreements for 2008, thus preventing the expected moderation of prices. This could also translate into a more pronounced deterioration of Slovenia's cost competitiveness, where trends are currently still better than in most other euro area countries. Since the second quarter, higher inflation has resulted in somewhat greater deterioration of cost competitiveness in comparison with other EMU countries, while the deterioration of Slovenia's cost competitiveness is among the lowest in the EMU. According to the Commission estimates, price competitiveness deteriorated in all euro area countries in the first three quarters of 2007, year on year. Compared to Slovenia, the deterioration was more pronounced in Germany, Ireland, Spain and Italy. In these countries this was chiefly due to the appreciation of the euro, because the United States is a relatively important trading partner for them. In Slovenia, on the other hand, the deterioration was largely based on the faster growth of relative prices. The appreciation of the euro had a smaller effect on Slovenian competitiveness due to the regional trade structure. At the same time, cost competitiveness at the level of the economy also deteriorated in all EMU countries except Germany. However, Slovenia witnessed one of the smallest declines in this area. Slovenia's divergence from other EMU countries regarding the growth of unit labour costs was smaller than the divergence in prices. On the other hand, the cost competitiveness of manufacturing, which comprises the main part of the tradable sector, has continued to improve this year on the back of vigorous productivity growth. Only Germany posted an even greater improvement in this area, while most other countries also witnessed deterioration in this indicator (see p. 6). By mid-November, most leading international and domestic institutions published their autumn forecasts of economic trends for Slovenia. The GDP growth forecasts of the IMAD, BS, EIPF, IMF and EC for 2007 range between 5.2% (EIPF) and 6.0% (EC). All institutions project a moderation of economic growth in 2008, to between 3.8% (IMF) and 5.0% (EIPF). A detailed forecast structure that could explain the factors of the slowdown projected by the IMF are not available. The forecasts of average inflation for this year range between 3.1% (EIPF) and 3.5% (EC). Regarding 2008, the low forecast of the EIPF (2.3%) and the somewhat higher forecast of the EC (3.7%) stand out notably; other forecasters project figures between 3.1% and 3.5%. The latter appears to be related to the EC's higher oil price assumption for 2008 (USD 78.8/barrel, Brent crude), since other institutions prepared their forecasts earlier, when the current oil prices were still considerably lower than at the beginning of November (IMAD assumption: USD 68.5/barrel). International Environment - USA Slovenian Economic Mirror IMAD No. 11/2007 p. 4 Expenditure side of GDP - USA 2007 2006 2007 EC forecasts 2008 EC forecasts 2009 EC forecasts Real growth, in % Annualised, quarterly Year-on-year Q1 Q2 Q3 Q1 Q2 Q3 GDP 0.6 3.8 4.9 1.5 1.9 2.8 2.9 2.1 1.7 2.6 Private consumption 3.7 1.4 2.7 3.2 2.9 2.9 3.1 2.9 1.3 1.4 Government consumption -0.5 4.1 3.9 1.2 1.9 2.7 1.6 1.6 1.8 1.9 Investment* -8.2 4.6 5.9 -6.6 -5.7 -3.3 2.5 -1.6 -0.9 2.8 Exports 1.1 7.5 18.9 6.6 7.1 10.2 8.4 7.4 8.5 7.8 Imports 3.9 -2.7 4.3 2.9 2.0 1.7 5.9 2.5 1.8 2.6 Sources of data: EC Autumn Forecasts (November 2007); U.S. Bureau of Economic Analysis (November 2007). Note: *the European Commission _and the BEA have slightly different methodologies for investment statistics, and data are therefore not fully comparable._ GDP growth in the United States exceeded projections in the third quarter but is set to slow down sharply towards the end of the year and in 2008 (see table). The annualised quarterly increase from July to September totalled 4.9%, largely reflecting the continued strong growth of private consumption and vigorous exports supported by the depreciation of the dollar. Core inflation remained below 2.0% in the second and third quarters, which enabled the Fed to cut interest rates. However, inflationary risks have also increased in recent months. Forecasts of GDP growth for 2008 have been revised downwards several times this year (see graph). According to the most recent forecast, GDP growth will be less than 2.0% next year. The Commission's Autumn Forecast projects 1.7% growth in 2008. The Fed has also reduced its forecasts this month, from 2.25-2.75% in June to 1.8-2.5%. Housing investment has been declining since 2006 and is set to continue to do so until at least the second half of 2008, due to the expected further accumulation of the stock of unsold homes and falling prices (projected to fall by a minimum of 10-20%). According to the Commission, housing investment will dampen GDP growth in 2008 by 0.6 p.p. However, the drop in housing investment, which accounts for close to 5% of GDP, may be offset by the expected higher export growth, which accounts for around 12% of GDP. Due to the dollar's depreciation and continued economic expansion in the main trading partners, coupled with the expected lower growth of imports due to lower domestic demand, net exports will contribute significantly to total growth in the next two years. The further downturn in the housing market, the tightening of financial conditions and the latest oil price rises pose a serious risk to the growth of private consumption in 2008. Private consumption accounts for approximately 70% of GDP and is therefore critical to total GDP growth. While private consumption growth was still at the level of the last two years in the third quarter, most of this growth was generated in July and August, whereas September's increase totalled a mere 0.1%. This drop is also evidenced in confidence indicators: in November the University of Michigan Index plummeted to its lowest level in 15 years (excluding the aftermath of the Hurricane Katrina), while the Conference Board Index dropped to its two-year low. Risks to further growth of private consumption include the effect of the lower wealth effect due to declining housing prices, the effect of the financial crisis on the capacity and readiness of consumers to take out new loans, the effect of the higher cost of financing existing mortgages, and the effect of higher energy prices. The main factor supporting further growth of private consumption is the low unemployment rate, which will, however, increase next year according to both the Fed and the Commission. Since the onset of the financial turmoil, the Fed has already cut its key interest rate twice to the current 4.5%. After the key interest rate was reduced by 0.5 p.p. in September, it was cut by a further 0.25 p.p. in October. This measure was made possible as core inflation dipped to below 2.0% in the second and third quarters. However, as oil prices hit new record highs and the dollar's depreciation affected import prices, inflation reaccelerated in September and even more in October, when year-on-year inflation reached its highest mark in 14 months (3.5%). The Fed thinks that this increase will be transitory unless it affects inflationary expectations. Therefore, the possibility of a further reduction of the key interest rate still exists at the moment. Graph: Comparison of forecasts/assumptions of GDP growth for the United States, in % 3.5 3.0 2.5 2.0 1.5 1.0 EC IMF OECD IMAD IMF EC EC Apr. Jul. Sep. Sep. Oct. Nov. Apr. EC Nov. IMAD EC Sep. Nov. Sources of data: EC Economic Forecasts (May 2007, November 2007), IMF World Economic Outlook Update (July 2007), IMF World Economic Outlook (October 2007), OECD Interim Assessment (September 2007). International Environment - EMU Slovenian Economic Mirror IMAD No. 11/2007 p. 5 Forecast of the ex penditure side of GDP Real growth (in %) EU EMU Germany 2006 2007 2008 2009 2006 2007 2008 2009 2006 2007 2008 2009 GDP 3.0 2.9 2.4 2.4 2.8 2.6 2.2 2.1 2.9 2.5 2.1 2.2 Private consumption 2.2 2.3 2.4 2.2 1.8 1.7 2.1 1.9 1.0 -0.1 2.0 1.4 Government consumption 2.0 2.0 2.0 1.9 1.9 2.0 2.1 2.0 0.9 1.7 1.4 1.4 Gross fix. capital formation 5.9 5.6 3.5 3.4 4.8 4.7 2.9 2.6 6.1 5.8 2.9 3.1 Exports 8.7 6.3 5.8 5.8 5.8 5.8 5.3 5.4 7.1 7.7 6.8 7.0 Imports 8.7 6.3 6.1 5.8 5.3 5.3 5.5 5.3 6.7 6.2 7.4 6.8 Source of data: EC Autumn Forecasts (November 2007). Economic growth in the euro area, which remained strong in the third quarter (2.7%, year on year), is expected to moderate in the latter part of the year and in the next two years. The growth of private consumption and investment remained at the level from the second quarter, while export growth accelerated (from 5.9% to 7.4%). Import growth picked up as well (from 4.9% to 6.0%), and the contribution of net exports to GDP growth increased from 0.4 p.p. to 0.7 p.p. In its Autumn Forecasts, the Commission estimates that the European economy is already past the peak of the current business cycle. Further, it says that while the pickup in economic activity witnessed in the last two years was largely cyclical, structural improvements supporting an increase in potential growth may also have been underway. EC experts also believe that the euro area economy has become more resistant to external shocks. The main reason for the economic slowdown projected for 2008 is the tightening of credit conditions and reduced credit availability, which will affect domestic demand. Global trade will also ease off, which, combined with the appreciation of the euro, will dampen export growth. The EC and the ECB agree that growth is more likely to be lower than projected rather than higher, while inflation will probably exceed the forecast rather than fall short of it. Private consumption will be the main engine of GDP growth in the next two years, while investment and exports are set to ease off. Based on the continued favourable trends on the labour market and the expected wage growth, private consumption will accelerate next year. This year, employment growth will pick up further at the annual level (1.5%) and moderate gradually in the next two years (to 1.0% and 0.8%), so that the unemployment rate will also decline more gradually over the next two years. In 2009, the unemployment rate is projected to total 7.1%. The effect of the financial crisis and further food price rises on consumer confidence presents a downward risk to the growth of private consumption, although consumer confidence has remained above its long-term average in the last few months. Total investment growth will soften in the next two years, mainly due to lower investment in construction, which will be affected by the tightening of credit conditions to a greater extent than other investment. Tighter lending conditions will reduce total investment growth in 2008 by 0.8 p.p. Thanks to the high profits in previous years and the still high capacity utilisation, the growth of investment in equipment will remain strong, albeit below the extraordinary growth rates of the last two years. Export growth will slow down next year, mainly due to the effect of lower GDP growth in the United States on global growth and the appreciation of the euro. In 2009, export growth will remain at the 2008 level. On the other hand, the EC estimates that the rapid shift in the geographical composition of European trade in favour of Asian and oil-exporting economies will partly offset the negative effect of the stronger euro against the dollar on exports to the United States. It is worth mentioning that the appreciation of the euro against the dollar in the first ten months of 2007 was three times higher than the appreciation of the euro's real effective exchange rate against a basket of 44 currencies. Euro area inflation is expected to accelerate towards the end of the year and is not projected to moderate to a level around 2.0% until the third quarter of 2008. According to preliminary estimates, November's euro area inflation was the highest since May 2001 (3.0%). Inflation accelerated already in October (2.6%), largely as a result of higher prices of oil and processed food, which have been, according to both the EC and the ECB, the main factors behind this year's increase in inflation. Due to the VAT raise in Germany, which will contribute 0.3 p.p. to overall annual inflation this year, and the prices of food and some services, core inflation (excluding energy and unprocessed food) will also increase this year, from 1.6% in December 2006 to 2.1% in October this year. If the Commission had taken into account the oil price trends at the beginning of November (two weeks after the forecasts were finalised), it would have raised its oil price assumption for 2008 (USD 78.8/barrel) by a further six dollars. This would reduce GDP growth in 2008 by an estimated 0.2 p.p. and push up inflation by 0.1 p.p. On the other hand, the EC expects the prices of non-energy commodities to moderate next year. The ECB further warns that higher inflationary expectations could become more entrenched, even at the current food price growth. Despite higher inflation, the ECB is not likely to raise the key interest rate (which has remained unchanged at 4.0% since June) in the near future, since the Governing Council has estimated that the negative effects of the financial turmoil still cannot be evaluated precisely at this moment. Graph: Forecast of year-on-year GDP growth and inflation (HICP) for the euro area 3.5 3.0 % 2.5 2.0 1.5 - ■ Inflation —*— Q1 2007 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 2008 2009 Source of data: EC Autumn Forecasts (November 2007). Q2 Q3 Q4 Competitiveness Slovenian Economic Mirror IMAD No. 11/2007 No. 6 Price competitiveness indicators, average indices 2006 QIII 2007/ QII 2007 QIII 2007/ QIII 2006 QI—III 2007/ QI—III 2006 Effective exchange rate against 17 trading partners' Nominal 100.2 100.1 100.6 100.7 Real exchange rate - based on consumer prices 100.7 100.8 102.3 101.8 Real exchange rate - based on producer prices2 99.1 100.2 102.2 102.1 Effective exchange rate against 10 trading partners outside the euro area Nominal 100.6 100.4 102.0 102.5 Real exchange rate - based on consumer prices 100.8 101.2 103.6 103.3 Real exchange rate - based on producer prices2 1 00.1 100.6 103.9 104.2 Effective exchange rate against 7 trading partners in the euro area1 Real exchange rate - based on consumer prices 100.6 100.6 101.8 101.2 Real exchange rate - based on producer prices2 98.8 100.0 101.5 101.2 Sources of data: SORS, ECB, OECD Main Economic Indicators; calculations by IMAD. Notes: against the basket of currencies of 17 trading partners (Austria, Belgium, Germany, Italy, France, Netherlands, Spain [7 euro area trading partners], Denmark, United Kingdom, Sweden, Czech Republic, Hungary, Poland, Slovakia, USA, Switzerland, Japan [10 trading partners outside the euro area]; an increase indicates appreciation and _vice versa; 2deflated by manufacturing producer prices on the domestic market._ Slovenia's price competitiveness, based on consumer prices, continued to deteriorate in the third quarter of 2007. Mainly due to the rising consumer prices, the real appreciation of Slovenia's effective exchange rate of the euro decreased at the quarterly level (from 2.0% to 0.8%), while it increased at the year-on-year level (from 1.8% to 2.3%). The growth of Slovenian consumer prices in comparison with those abroad slowed from the second to the third quarter (from 1.6% to 0.7%), while their year-on-year growth accelerated (from 1.1% to 1.7%) after having increased modestly (by around 0.5%) for two years. The effect of the nominal growth of the euro's effective exchange rate (see table) on the deterioration of Slovenia's price competitiveness was relatively smaller. The appreciation of the euro against the U.S. dollar was smaller in the third quarter than in the second. At the same time, its nominal value against the Japanese yen and the currencies of some EU countries outside the EMU depreciated. In the third quarter the nominal growth of the euro's effective exchange rate contributed one eighth to its real quarterly growth, while the growth of relative prices contributed the remaining seven eighths. Nominal appreciation of the exchange rate contributed a good quarter to the year-on-year real growth, while the relative price increase added close to three quarters. Slovenia's price competitiveness, based on producer prices, deteriorated as well in the third quarter. The real effective exchange rate was higher at both the quarterly (0.2%, after a 0.2% decrease in Q2) and year-on-year levels (by 2.2% from 1.9%). Slovenian producer prices in comparison with those abroad increased again at the quarterly level (by 0.1%, relative to a 0.6% decrease), while their year-on-year growth increased further (1.6% relative to 1.2%). Due to the euro's appreciation, the deterioration of Slovenia's price competitiveness was more pronounced outside the euro area, notably at the year-on-year level. The effective exchange rate appreciated by a nominal 2% against the 10 partners outside the euro area in the third quarter, year on year. Its real appreciation totalled a respective 3.6% (CPI deflator) and 3.9% (PPI deflator). The year-on-year appreciation of the real effective exchange rate against the seven main partners in the euro area totalled 1.8% and 1.5%, respectively. Due to the high increase in consumer prices, Slovenia was again one of the EMU countries that recorded a substantial deterioration in price competitiveness in the third quarter. According to the European Commission (EC), only Ireland and Germany witnessed a larger year-on-year deterioration in price competitiveness in the third quarter (see graph). On the other hand, the deterioration of Slovenia's cost competitiveness in the third quarter was among the lowest in the EMU. According to estimates of the EC, only Germany improved its cost competitiveness; Austria and Finland recorded a smaller deterioration, while the deterioration in Belgium and Luxembourg was similar to Slovenia. The Slovenian manufacturing sector improved its cost competitiveness again in the third quarter (for the eighth consecutive quarter), thanks to robust productivity growth. German and Dutch manufacturing industries also recorded an improvement (see graph). Graph: Euro's real effective exchange rates* deflated by CPI, unit labour costs (economy), and unit wage costs (manufacturing) in third quarter of 2007 □ CPI □ Unit labour costs, economy □ Unit wage costs, manufacturing ro 2 BE + LU DE GR ES FR IE NL AT*' PT Source of data: European Commission. Notes: *against 36 industrial countries: EU-27, Australia, Canada, USA, Japan, Norway Zealand, Mexico, Switzerland, and Turkey; **the figure on unit wage costs in manufacturing is not available. SI New T Balance of Payments Slovenian Economic Mirror IMAD No. 11/2007 p. 7 Balance of payments, I-IX 2007, EUR m Inflows Outflows Balance1 Balance, I-IX 2006 Current account 19,235.0 20,053.6 -818.6 -344.3 Trade balance (FOB) 14,673.1 15,636.9 -963.8 -580.6 Services 3,168.9 2,290.9 878.0 705.8 Factor services 766.9 1,253.3 -486.3 -298.1 Unrequited transfers 626.1 872.5 -246.4 -171.4 Capital and financial account 8,816.1 -7,797.4 1,018.7 626.5 Capital account 175.4 -200.1 -24.7 -35.9 Capital transfers 175.4 -197.7 -22.3 -36.5 Non-produced, non-financial assets 0.0 -2.4 -2.4 0.6 Financial account 8,640.7 -7,597.3 1,043.4 662.4 Direct investment 664.8 -867.7 -202.9 -52.7 Portfolio investment 1,030.1 -2,512.9 -1,482.8 -766.8 Financial derivatives 0.0 -12.1 -12.1 -15.0 Other long-term capital investment 6,869.9 -4,204.7 2,665.2 610.1 Assets 24.3 -4,175.1 -4,150.8 -1,671.8 Liabilities 6,845.6 -29.6 6,816.0 2,282.0 International reserves (BS) 75.8 0.0 75.8 886.8 Statistical error 0.0 -200.1 -200.1 -282.2 Source of data: BS. Note: a minus sign (-) in the balance indicates a surplus of imports over exports in the current account and a rise in assets in the capital and financial account and the central bank's international reserves._ Despite the slowdown in September,1 the year-on-year growth of goods exports strengthened further in the third quarter (17.0%). According to the SORS' preliminary data, goods exports rose by a nominal 17.1% in the first nine months, year on year (to EU countries by 17.5%, to non-EU countries by 16.0%). Despite the cooling of the European economy (see also p. 5), exports have continued to accelerate on the back of booming road vehicles exports. Since having joined the EU, Slovenia has recorded strong export growth for the fourth consecutive year. Throughout this period, exports to EU countries have grown at a faster pace than exports to other countries. The available data for the first eight months of 2007 on the structure of merchandise exports according to the SITC show a particularly high increase in exports of road vehicles (34.6%); exports of other products also enjoyed fairly strong growth (15.6%). The year-on-year growth of goods imports slowed in the third quarter (17.6%; down from 21.2% in Q2). Nevertheless, the growth of goods imports in the first nine months (18.8%) continued to exceed the growth of goods exports. Imports from EU countries increased by a nominal 14.7% in this period, year on year, while imports from non-EU countries surged by 36.4%. According to available SITC data for the first eight months, the main contributions to growth came from imports of road vehicles, iron and steel, electrical machinery and equipment, metal products, industrial machinery, and plastic products. The surplus in the services balance increased sharply in the nine months to September. This was largely linked to lower net imports of other services and higher receipts from travel. Exports of services grew by a nominal 22.1% compared with the same period last year, while imports of services went up 21.3%. The higher surplus was chiefly underpinned by the higher increase in exports of travel (16.1%) compared with imports of travel (10.5%). The deficit in factor incomes widened, mostly due to net interest payments of domestic commercial banks. 1 The decline in year-on-year growth from 25.5% in August to 9.3% in September was largely caused by the lower increase in exports to EU countries (from 28.1% to 6.4%). At the same time, the growth of imports fell as well, from 20.8% to 15.2%. This was likewise mostly attributable to the lower growth of imports from EU countries (down from 17.4% to 4.9%). Commercial banks received more interest from stronger lending to the rest of the world and investment in debt securities. Due to growing borrowing and rising interest rates (see also p. 10), their paid interest on external debt increased as well. In the first nine months of 2007, the total net paid interest on foreign loans amounted to EUR 381.1 m, 60.1% of which was net paid interest of banks (in the same period last year EUR 243.6 m and 55.4%, respectively). The deficit in current transfers was mostly linked to the higher deficit of other sectors. The latter (workers' remittances, insurances and other transfers) increased to EUR 113.4 m in the nine months to September (from EUR 41.5 m in the same period of 2006). Slovenia's budget relative to the EU budget recorded a deficit of EUR 43.8 m in this period (last year a deficit of EUR 6.4 m). The net capital inflow from the rest of the world is still increasing. International financial transactions (excluding international reserves) posted a net capital inflow of EUR 967.5 m in the first nine months of the year (a net outflow of EUR 224.4 m in the same period last year). The increased net inflow was largely generated by the BS' short-term liabilities to the Eurosystem, notably in the first four months of the year, as well as commercial bank borrowing. Both strongly affected the dynamics of gross external debt, which totalled EUR 31,958 m at the end of September. Compared with December 2006, it increased by EUR 7,923 m; 45.8% of the increase is attributable to BS' liabilities to the Eurosystem. Slovenia's gross external claims are also increasing. At the end of September, they totalled EUR 26,962 m. Net external debt position thus amounted to EUR 4,996 m at the end of September (15.1% of estimated GDP for 2007). The BS has adopted a new methodology for estimating currency transactions, which significantly reduced the statistical error. According to the principle of double-entry bookkeeping, currency and household deposits are a counter-entry to travel and income from work. The currency of households is estimated as the sum of differences between currency inflows and outflows under tourism and income from work. As a result, the statistical error decreased from EUR -1,272.0 m (January-August) to EUR -200.1 m (January-September). Most of the decrease (EUR 857.1 m) was due to the increase in claims under currency and deposits of households as a result of the new methodology. Price Trends and Policy Slovenian Economic Mirror IMAD No. 11/2007 p. 8 Price indices 2006 2007 XII 2006/ XII 2005 O (I 06-XII 06)/ O (I 05-XII 05) X 2007/ IX 2007 X 2007/ X 2006 O (XI 06-X 07)/ O (XI 05-X 06) Consumer prices (CPI) 102.8 102.5 100.7 105.1 103.1 Goods 102.1 102.0 101.3 105.1 102.5 Fuel and energy 103.9 108.2 100.3 105.4 102.0 Other 101.7 100.5 101.5 105.0 102.6 Services 104.3 103.4 99.3 104.9 104.4 Consumer prices (HICP) 103.0 102.5 100.7 105.1 103.2 Administered prices1 102.1 105.8 100.0 105.8 101.9 Energy 103.7 108.0 100.0 105.0 101.7 Other 97.9 100.2 100.0 107.6 102.4 Core inflation: - trimmean 102.7 102.8 100.6 102.7 102.2 - excluding food & energy 102.0 101.2 100.7 103.8 102.4 Producer prices: - domestic market 102.8 102.3 100.6 106.3 104.7 - EMU 106.3 102.6 99.7 102.1 105.9 Consumer prices in the EMU 101.9 102.2 100.5 102.6 101.9 Sources of data: CPI, HICP, IPI: SORS; administered prices and core inflation: IMAD estimate; MUICP in the EU: Eurostat (provisional data) and IMAD recalculation. Note: figures are not directly comparable between years due to the annual changes of the administered prices index. Inflation increased significantly in October. After the 3.5% year-on-year consumer price rise recorded in September, inflation surged to 5.1% in October. Food prices were the main contributing factor to this increase. Oil price rises were also a significant factor. Both factors together accounted for more than half of the year-on-year price increase in Slovenia. Since deflation was recorded in October 2006 (-0.8%), largely due to a drop in oil prices on the global market, the leap in year-on-year inflation was expected in view of the base effect. Apart from that, price developments in October were, as in September, largely determined by the dynamics of food prices and prices prone to seasonal fluctuations. Food price rises remain the main determinant of this year's inflation. After most of the announced food price increases materialised in September, October witnessed a similar development. Food prices increased by a further 2.2% and contributed 0.4 p.p. to monthly inflation. Increases were observed in the prices of milk, milk products and eggs (by 9.8% in total), fats and oils, and meat. This year, food prices have already increased by 11.7%, accounting for approximately 43% of this year's total consumer price increase (see graph). Initially, the situation in the external environment that impacted the price increases in all types of raw materials and food on the global market appears to have been a significant factor of the accelerated food price rises, both in Slovenia and elsewhere in Europe. However, a comparison of price increases in the EMU over the last few months shows that this external shock had a much stronger impact on consumers in Slovenia than in other EMU countries. Data show that concentration has increased significantly in retail trade in Slovenia over the last few years. In 2000, the four largest companies generated 47% of net revenues on this market segment. By 2006, the figure surged to 89%. Although high concentration on this market segment also exists in other small countries in the EMU (Austria, Belgium), the faster growth of domestic food prices in comparison with prices in these countries suggests that the pass-through of external shocks to prices in Slovenia is also determined by the relationships in the producer-manufacturer-seller chain. Price developments in October were additionally determined by seasonal impacts. The price increase in clothing and footwear (4.3%) contributed approximately 0.4 p.p. to monthly inflation, while lower prices of package holidays (-8%) reduced inflation by just over 0.2 p.p. In comparison with October 2006, the prices of these two groups increased by a respective 1.8% and 9%. Slowly but steadily, inflationary expectations are rising. According to the SORS' survey for October, approximately 60% of the persons surveyed believed that prices would continue to increase at the same or higher rate in the next 12 months. Graph: Contributions of individual price groups to inflation in the first ten months of 2007 and 2006 (in percentage points) 2.0 o) 1.5 t I 10 ff ■e 0.5 cj S> 0.0 -0.5 Oct.07/Dec.06 E3 Oct.06/Dec.05 rti Source of data: SORS, calculations by IMAD. Money Market - Household Savings Slovenian Economic Mirror IMAD No. 11/2007 p. 9 Household savings in banks and in mutual funds managed by domestic administrators EUR m, nominal Nominal growth rates in % 31. XII 2006* 30. IX 2007 30. IX 2007/ 31. VIII 2007 30. IX 2007/ 31. XII 2006* 30. IX 2007/ 30. IX 2006* Total savings in banks 11,451.3 12,256.5 0.5 7.0 11.5 Domestic currency savings 7,181.3 11,850.8 0.6 n.s. n.s. Overnight deposits1 3,730.9 5,424.5 0.3 n.s. n.s. Short-term deposits 2,558.1 4,521.4 0.1 n.s. n.s. Long-term deposits 677.2 1,236.9 0.8 n.s. n.s. Deposits redeemable at notice 215.0 668.0 5.6 n.s. n.s. Foreign currency savings 4,270.0 405.6 -3.1 n.s. n.s. Overnight deposits1 1,794.3 162.9 -6.7 n.s. n.s. Short-term deposits 1,877.1 178.6 -0.7 n.s. n.s. Long-term deposits 474.4 43.6 -3.4 n.s. n.s. Deposits redeemable at notice 124.2 20.5 7.3 n.s. n.s. Mutual funds 1,967.3 2,913.8 2.2 48.1 73.5 Source of data: Monthly Bulletin of the BS, SMA (Securities Market Agency); calculations by IMAD. Notes: 'demand deposits; *due to the transfer of euro loans to domestic currency loans, data from previous years are not comparable with data for 2007, and calculations of growth rates are therefore meaningless. September's monthly increase in the volume of household deposits in banks totalled less than 1% for the second consecutive month. All euro deposits were on the increase, whereas foreign currency deposits recorded growth only in deposits redeemable at notice with fairly high interest rates. At the monthly level, foreign currency deposits witnessed the sharpest drop this year (excluding the January figure, which is not comparable due to the euro changeover). Thus, the share of foreign currency deposits is still gradually declining. At the end of September, it accounted for just over 3% of total household bank deposits. Deposits redeemable at notice still enjoy the strongest growth, although their growth rates have been gradually contracting. However, the latter is attributable to the high comparable base rather than lower net flows. Total net flows of household deposits in banks more than doubled in the first nine months of 2007. They achieved a value of EUR 805.2 m. Deposits redeemable at notice, which surged by 103.3% in this period, accounted for more than 40% of total net inflows. Long-term deposits also posted double-digit growth (11.3%), although they accounted for just over 15% of total net flows of household deposits in banks. Net inflows into mutual funds have been gradually declining, but they still persist at fairly high levels. In the third quarter they reached their lowest value this year (EUR 93.7 m), which, however, still appreciably exceeds the average of the last few years. The quarterly decline appears to be related to the response of investors to trends on capital markets and, to some extent, to seasonal factors. Year-on-year growth of net flows remains strong - in the first three quarters of the year, they amounted to EUR 380.7 m, 3.1 times more than in the comparable period of 2006. They also exceeded the record-high value from 2004 (EUR 342.6 m). The volume of assets in mutual funds increased by almost 50% from the end of 2006 to the end of September 2007, reaching as much as 23.8% of the value of household deposits in banks. The main contributors to growth were stock mutual funds, which accounted for almost two thirds of mutual funds' total assets at the end of September. The volume of assets also increased in other types of mutual funds, except in bond mutual funds, where it was approximately 15% lower than at the end of 2006. Graph: Net flows of household deposits in banks and mutual funds Source of data: SORS, calculations by IMAD. Money Market - Loans Slovenian Economic Mirror IMAD No. 11/2007 p. 10 Domestic bank loans Nominal amounts, in EUR m Nominal loan growth, in % 31. XII 2006* 30. IX 2007 30. IX 2007/ 31. VIII 2007 30. IX 2007/ 31. XII 2006* 30. IX 2007/ 30. IX 2006 Loans total 20,193.3 25,148.6 2.0 24.5 32.1 Domestic currency loans 7,457.5 23,502.2 1.9 N/A N/A Enterprises and NFI 4,066.8 17,396.3 1.9 N/A N/A Households 2,896.4 5,594.0 2.0 N/A N/A Government 494.3 511.8 -0.8 N/A N/A Foreign currency loans 12,735.8 1,646.4 4.2 N/A N/A Enterprises and NFI 10,091.3 755.1 4.1 N/A N/A Households 2,484.3 874.2 4.2 N/A N/A Government 160.1 17.2 8.2 N/A N/A Household loans by purpose 5,380.7 6,468.2 2.3 20.2 26.1 Consumer credits 2,286.6 2,643.2 2.1 15.6 19.1 Lending for house purchase 1,955.8 2,486.9 2.4 27.2 37.7 Other lending 1,138.3 1,338.1 2.4 17.5 21.0 Source of data: BS Bulletin, calculations by IMAD. Notes: NFI - non-monetary financial institutions; *due to the transfer of euro loans to domestic currency loans, data from previous years are not comparable with data for 2007, and calculations of growth rates are therefore meaningless. In September the non-banking sector's borrowing from domestic banks was at the lowest level in the last six months, yet still higher than in the first quarter. The growth of both corporate and household loans declined, whereas the government continued to repay loans taken out in domestic banks due to other, more favourable possibilities of financing. Looking at the currency structure, the monthly growth of both euro and foreign currency loans decreased. The latter increased by less than 5% for the second consecutive month. Since a significant proportion of these loans are denominated in Swiss francs, the decline could be partly attributed to the dynamics of the average value of the Swiss franc against the euro, which appreciated by more than one percent in August and also predominantly appreciated in the first days of September. In the first three quarters of 2007, banks in Slovenia recorded net lending to domestic non-banking sectors in the amount of EUR 4,955.4 m, which is 70.8% more than in the comparable period of 2006 and 22.0% more than in 2006 as a whole. This value accounted for just 0.7% of the volume of total net flows in the EMU. The monthly increase in the volume of loans to enterprises and NFI declined for the second month in a row. Such dynamics in September are attributable to the net repayment of loans for other purposes (probably mostly corporate bridging loans) in the amount of EUR 112.4 m. The monthly increase in working capital loans remained at approximately the same level as in previous months, while the growth of investment loans fell slightly. The net borrowing of enterprises and NFI from domestic banks recorded in the first nine months of the year amounted to EUR 3,993.2 m (80,6% of total net flows), which is 86.4% more than in the comparable period of 2006. Borrowing abroad is increasingly becoming a relatively less important type of corporate financing. In the nine months to September, enterprises recorded net borrowing in the amount of EUR 340.3 m, almost 50% less than in the comparable period of 2006. The structure of banks' borrowing abroad is changing. After long-term borrowing strengthened somewhat in August, short-term loans again predominated in September. Their net inflows amounted to EUR 321.7 m, reaching the highest value thus far. In the first three quarters of the year, they accounted for more than one quarter of total net borrowing (last year, banks even net repaid such loans). Thus, the maturity structure of the banking sector's balance sheets is deteriorating and could worsen the liquidity of Slovenian banks if the financial crisis deepens. In the first nine months of the year, banks' net borrowing abroad amounted to EUR 2,150.2 m, almost twice as much as in the same period of 2006. The growth of household loans remained at a relatively high level in September. All types of loans according to purpose posted fairly even growth rates above 2%. The volume of consumer loans increased at a somewhat faster pace than usual. On the other hand, the growth of housing loans witnessed a somewhat more pronounced decline, probably due to the slower growth of these loans in Swiss francs. In the first three quarters of 2007, households recorded net borrowing from domestic banks in the amount of EUR 1,087.5 m, 28.2% more than in the comparable period of 2006. Graph: Net flows of domestic bank loans to domestic non-banking sectors Source of data: SORS, calculations by IMAD. Labour Market Slovenian Economic Mirror IMAD No. 11/2007 p. 11 Thousands of people Growth, in % Selected labour market indicators I-XII IX XII IX IX 2007/ I-IX 2007/ O 2006/ 2006 2006 2006 2007 VIII 2007 I-IX 2006 O 2005 A Registered labour force (A=B+C) 910.7 909.8 911.3 926.0 0.3 1.4 0.6 Persons in formal employment* 824.8 829.5 833.0 859.4 0.6 3.5 1.4 B in enterprises and organisations 675.1 678.2 681.7 700.1 0.6 3.0 1.3 by those self-employed 66.5 67.9 67.5 71.5 0.7 5.2 1.7 self-employed and farmers 83.3 83.5 83.8 87.8 0.3 6.0 2.1 Registered unemployed 85.8 80.2 78.3 66.7 -2.7 -17.9 -6.6 C women 47.0 44.6 42.6 36.7 -3.5 -17.4 -4.9 aged over 40 39.7 38.9 37.7 36.3 -0.8 -7.1 -0.9 unemployed more than 1 year 41.9 41.2 39.7 35.0 -1.6 -12.8 -3.6 Rate of reg. unemployment (C/A), in % 9.4 8.8 8.6 7.2 - - - D male 8.9 7.1 7.1 5.8 - - - female 12.0 10.9 10.5 9.0 - - - E Job vacancies 19.0 22.7 15.9 22.8 6.5 5.7 12.3 for a fixed term, in % 75.3 78.7 76.4 76.5 - - - Number of persons hired 13.0 16.7 9.1 16.9 -1.3 -0.9 13.8 F lower education 3.9 4.2 2.6 4.4 2.6 2.8 19.4 secondary education 7.1 8.3 5.2 8.5 -3.0 -2.4 13.8 tertiary education 2.0 4.1 1.3 4.0 -3.2 -3.0 4.3 Sources of data: SORS, ESS, calculations by IMAD. Note: 'persons in employment according to administrative sources. After the seasonal stagnation in the summer, employment increased in September, mostly due to the continued strong growth of employment in the construction sector and seasonal hiring in the education sector. The total number of formally employed increased by 4,782 (0.6%) from August. Almost 30% of the increase was the result of seasonal employment (especially temporary) in education. One fifth of the increase was due to the continued growth of the number of construction workers, which increased by 11.0% in the first nine months of 2007, year on year. Employment in manufacturing increased by 440 persons (0.2%) in September, less than in September 2006. The number of registered unemployed increased by 4.3% to 69,500 persons in October due to seasonal factors. First-time job seekers who finish school typically register as unemployed in the autumn. Their number has been declining over the last few years. In October there were 5,039 of them, 403 or 7.4% fewer than in October 2006. Three quarters of this inflow are secondary school graduates. Nevertheless, the number of unemployed increased relatively more in October this year than in the same month of 2006 due to the smaller number of deletions from the unemployment register for reasons other than employment (see graph). Together with the net transfers between registers, there were 2,638 such deletions (39.7% fewer than in October 2006 and approximately the same as in September this year). However, more persons also lost work (4,452), while fewer unemployed persons found employment (4,273) than in October 2006 and September 2007. As a result of the higher number of employed persons and lower number of registered unemployed persons than in August, the registered unemployment rate fell in September to 7.2%. However, it is expected to rebound slightly in October due to the higher number of unemployed. The number of vacancies and persons hired increased again in October. Both increased by approximately 7% from September this year and approximately 24% from October 2006. There were 24,384 vacancies available in October. In addition to manufacturing (5,106 vacancies, of which 1,336 in the metal industry), vacancies were predominantly available in business services (4,726, particularly in job brokering), trade (4,017) and construction (3,503). The structure of persons hired by activity is similar. Graph: Flows of registered unemployment by month, 2004-2007 If SE <5 CJ W C 3 i? I ] Change in the no. of unemployed -New first-time jobseekers - Lost work -Unemployed who f ound work -Deletions for other reasons Source of data: ESS. Earnings Slovenian Economic Mirror IMAD No. 11/2007 p. 12 Gross wage per employee, growth index Wages in EUR IX 2007 In nominal terms IX 07/ VIII 07 IX 07/ IX 06 I-IX 07/ I-IX 06 In real terms' IX 07/ VIII 07 IX 07/ IX 06 I-IX 07/ I-IX 06 Gross wage per employee, total 1,259.07 98.4 104.9 105.6 98.0 101.4 102.5 Private sector (activities A-K) 1,181.41 97.6 105.6 106.4 97.2 102.0 103.3 Agriculture 1,044.82 97.4 104.6 107.2 97.0 101.1 104.1 Fisheries 998.75 92.7 103.5 104.2 92.3 100.0 101.0 Mining and quarrying 1,546.72 99.9 107.5 104.6 99.5 103.9 101.6 Manufacturing 1,092.84 96.6 106.0 106.2 96.2 102.4 103.1 Electricity, gas, and water supply 1,588.26 99.1 107.7 104.5 98.7 104.1 101.5 Construction 1,039.26 97.0 103.1 106.5 96.6 99.6 103.4 Distributive trades 1,141.76 99.2 107.0 107.6 98.8 103.4 104.5 Hotels and restaurants 916.33 97.0 103.8 105.0 96.6 100.3 101.9 Transport, storage & communications 1,322.03 98.5 104.0 105.5 98.1 100.5 102.5 Financial intermediation 1,814.65 97.9 101.6 107.1 97.5 98.1 104.0 Real estate, renting, business services 1,331.00 97.8 107.3 106.4 97.4 103.7 103.3 Public services (activities L-O) 1,489.82 100.3 103.8 104.2 99.9 100.3 101.2 Public administration 1,538.31 101. 105.9 104.6 101.3 102.3 101.6 M Education 1,555.72 100.0 102.4 104.5 99.6 99.0 101.5 Health and social work 1,391.45 99.3 103.3 103.5 98.9 99.8 100.4 O Other social and personal services 1,407.01 99.4 104.0 103.6 99.0 100.5 100.6 Source of data: SORS and IMAD calculations for the private sector and public services. Note: deflated by the consumer price index. In September the gross wage per employee increased by 1.6% in nominal terms and by 2.0% in real terms, as consumer prices increased by 0.4%. A substantial drop in gross earnings was recorded in the private sector (A to K), by 2.4% in nominal and 2.8% in real terms. The main reason was that September was two working days shorter. The drop was even more pronounced in the industry and construction group (C, D, E, F), which is the most sensitive to the length of the working month. The gross wage per employee in this group fell by a nominal 3.2%, the largest drop was in manufacturing. The smallest decrease was observed in production services (G, H, I), mainly due to distributive trades, where gross earnings slipped by just 0.8% and which employ 60% of workers in the group, thus strongly influencing the dynamics of earnings in the group as a whole. This year, the gross wage per employee has been growing at the fastest pace in distributive trades (by 4.5% in the first nine months, year on year), mainly due to the legal limitation on opening hours in shops on Sundays in 2006. In the group of business services (J, K), the gross wage per employee declined by 2.2%; the decrease was roughly even in both activities. The gross wage in public services (L to O) remained approximately at the August level in September (a 0.3% nominal increase and a 0.3% real decrease). Only public administration posted somewhat faster growth (1.8%). Earnings increased in defence, public security and protection, and disaster relief services, mainly due to overtime work during the September floods. The gross wage per employee increased by a nominal 5.6% in the first nine months of 2007, year on year. The increase was somewhat higher in the private sector (6.4%) than in public services (4.2%), where earnings are only partly indexed to inflation. The IMAD's Autumn Forecast assumes a slightly higher increase in gross earnings in the private sector in October due to the higher number of working days and in public services due to promotions, whereas November's assumption includes an increase in private sector earnings due to 13th month payments. Wages in December will be lower than in November as a result of November's payments and two days shorter working month. Based on these dynamics, it is unlikely that the annual increase in the gross wage per employee will exceed the autumn forecast (5.9%). Graph: Nominal gross wage per employee by groups of activities 1,800 1,700 1,600 1,500 1,400 1,300 1,200 1,100 1,000 4 Source of data: SORS, calculations by IMAD. A B C D E F G H J K L N Manufacturing Slovenian Economic Mirror IMAD No. 11/2007 p. 13 Growth rates, in % Selected economic indicators IX 2007/ IX 2007/ I—IX 2007/ I-XII 2006/ VIII 2007 IX 2006 I—IX 2006 I-XII 2005 Production value1 17.1 3.9 9.2 6.5 - highly export-oriented industries2 33.0 24.5 15.8 7.6 - mainly export-oriented industries3 18.1 -2.6 8.1 8.5 - mainly domestic market-oriented industries4 -1.8 -3.5 3.5 0.8 Average number of employees 0.2 0.8 1.0 1.7 Labour productivity 16.9 3.0 8.1 8.3 Level of inventories5 0.4 10.7 8.0 1.8 Turnover5 18.6 3.4 8.3 5.2 New orders5 7.1 11.1 11.6 6.7 Industrial producer prices (domestic market) 1.0 4.6 4.0 2.3 - producer prices/inflation 0.6 1.1 1.0 -0.2 Source of data: SORS; calculations by IMAD. Notes: real growth calculated on the basis of data on production value - SORS' recalculation with the IPI (provisional data); Manufacturing industries (DG, DK, DM) which have, according to data on Slovenian commercial companies from the AJPES, earned over 70% of their average net revenue from sales on foreign markets in the last three years on average; Manufacturing industries (DB, DC, DD, DH, DJ, DL, DN) which have earned 50-70% of their average net revenue from sales on foreign markets in the last three years on average; "manufacturing industries (DA, DE, DF, DI) which have earned less than 50% of their average net revenue from sales on foreign markets _in the last three years; 5real growth._ Production activity in the manufacturing sector increased modestly in September. According to the SORS' preliminary data, it increased by 3.9% in comparison with September 2006. If data are adjusted for working days, the increase totalled 5.9%, since September this year had one working day fewer than September in 2006. Nevertheless, September posted the lowest year-on-year monthly increase this year. Although production growth declined, its average nine-month increase was large. A year-on-year comparison by quarter shows that after the extraordinary growth seen in the first quarter (10.5%), production moderated gradually thereafter to achieve an 8.2% increase in the third quarter. According to our estimates and the projected external economic slowdown (see also pp. 4-5), growth is expected to ease off further in the final quarter of the year in line with the Autumn Forecast assumptions. In other EU countries, the vigorous growth of production observed in the first quarter was followed by a significant deceleration in the second quarter and a slight rebound in the third quarter. Even so, the growth of Slovenian manufacturing in the third quarter was more than double that of the EU. The structure of domestic production activity is also improving. The technologically more intensive industries are expanding and counterbalancing the slowdown in the technologically less advanced industries, which increased rapidly at the beginning of the year (see graph). The accelerated expansion of the former was largely underpinned by the growth of the chemical (DG) and car industries (DM). Developments on the manufacturing labour market remain relatively favourable. The number of employees increased by 440 from August, notably in the manufacture of rubber and plastic products (DH), the metal industry (DJ), and the manufacture of machinery and equipment (DK). On the other hand, the number of workers in the food (DA) and textile industries (DB) continued to decline in September. Business optimism remained at the October level but fell short of this and last year's averages. The seasonally adjusted value of the confidence indicator in manufacturing remained unchanged in November, since deteriorated expectations for the next three months were matched by slightly better estimates of the current situation. The value of this indicator has not improved since June, when it slipped to below this year's average. Since October, it has also been lower than last year's average. Although it remains above its long-term average, the latest data confirm that Slovenian manufacturing has passed the peak of the business cycle. Graph: Year-on-year growth of manufacturing's industrial production according to technology intensity % 20 18 16 14 12 10 8 6 4 2 0 -2 0 Q1 2007 0 Q2 2007 □ Q3 2007 IIP Manufacturing, total High and medium-high technology industries Medium-low technology industries Low technology industries Source of data: SORS, calculations by IMAD. Note: calculated by using OECD methodology (Revision of the High-Technology Sector and Product Classification, 1997). Construction Slovenian Economic Mirror IMAD No. 11/2007 p. 14 Selected construction indicators, real indices IX 2007/ IX 2006 Q3 2007/ Q3 2006 2006/ 2005 Value of construction put in place1 104.6 116.9 115.3 Buildings 95.6 110.2 114.0 Residential buildings 78.0 102.6 Non-residential buildings 100.4 116.2 117.7 Civil engineering 113.6 126.2 116.! Value of the stock of contracts , 111.0 111.0 173.5 Value of new contracts1 95.0 96.0 152.3 Number of people employed in construction 111.1 110.1 107.5 Average gross wage per worker employed in construction 99.6 101.9 103.5 Sources of data: SORS, CCIS; calculations by IMAD. Notes: 1the analysis covers enterprises whose value of construction put in place totalled at least EUR 1.45 m according to the financial statements for 2005, divisions engaged in construction activity employing at least 20 workers, and several non-construction enterprises which carry out construction activity; 2end of period; 3deflated by the CPI. As expected, construction activity moderated somewhat in the third quarter, yet it remained at a high level. According to seasonally adjusted data, the value of construction put in place by large firms (see note below table) declined by 1.3% in the third quarter. It exceeded the average level of 2006 by 22.7%, falling short only of the previous quarter. Compared with the same period of 2006, the value of construction put in place rose by 16.9%. The increase was much smaller than in the first two quarters (35.5% and 31.5%), but we should bear in mind that construction activity rose substantially in this period last year. Civil engineering construction continued to increase in the third quarter. The value of construction put in place in this segment of construction was 26.2% higher than a year ago. A year-on-year decrease was recorded only in the construction of residential buildings (see table). In interpreting the value of construction put in place, we note that these figures exclude the activity of smaller firms (see note below table), whose main activity is estimated to be residential construction. According to seasonally adjusted data, activity increased relative to the previous quarter only in civil engineering, whereas activity in residential construction was at its lowest point in the last two and a half years. The growth of employment in the construction sector continued. In the nine months to September, the number of employees surged by 11.0%. As in 2006, the highest increases in employment were recorded in general construction and building completion. The share of firms that were unable to find workers declined in November after October's record-high value. According to business trends in construction, 47% of enterprises (employing 52% of workers) reported "shortages of skilled workers" as a limiting factor in November. This figure is smaller than in the previous two months, but still well above the average value of this indicator in the last five years (since data have been available). Building permits issued in the third quarter were granted for the highest number of new homes since data have been available (1999). The planned floor area for new buildings and extensions increased by 6.3% in the third quarter, year on year. The increase reflected the large total planned floor area of residential buildings (up 38.1%), whereas the total planned floor area of non-residential buildings contracted by 23.8%, year on year (partly due to the high comparable base). Building permits were issued for the construction of 3,298 new homes, 41.5% more than a year ago and 14.8% more than in the previous quarter. As in the second quarter, the quarterly figure was thus again the highest since data have been available. Graph: Seasonally adjusted real indices of the value of construction put in place 180 Building construction 80 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2003 2004 2005 2006 2007 Source of data: SORS. Energy Sector Slovenian Economic Mirror IMAD No. 11/2007 p. 15 Selected indicators, growth rates in % Q3 2006, in GWh Q3 2007, in GWh Q3 2007/Q3 2006, in % Production of electricity 3,364 3,512 4.4 Prod. in hydroelectric plants 777 796 2.4 Prod. in thermal plants 1,096 1,234 12.6 Prod. in nuclear power plant 1 ,491 1,483 -0.6 Consumption of electricity 3,233 3,300 2.1 Through distribution network 2,473 2,565 3.7 Direct consumers 704 683 -2.9 Transmission losses 56 51 -8.9 Net electricity exports 1 31 21 2 61.9 Source of data: ELES, Electricity Balance for June and September 2007; calculations by IMAD. In the third quarter this year (year on year) energy production increased twice as much as energy consumption, which resulted in higher net electricity exports. According to ELES, the output of hydro-electric power plants was 12.5% below the planned levels from the national Electricity Balance for 2007 (EB), which is based on long-term average monthly water levels of Slovenian rivers; however, it was somewhat higher than in the third quarter of 2006. The output in the Krško nuclear power plant was slightly lower than in the third quarter of 2006. The production of conventional thermal power plants increased substantially year on year (by 12.6%) and was 16.9% higher than the level planned in the EB. The relatively moderate increase in electricity consumption (2.1%) was facilitated by direct consumers through the transmission network (some major metal-processing companies), which reduced electricity consumption by 2.9%. The higher increase in electricity consumption through the distribution network (see table) appears to be partly linked to the still strong economic activity (industrial production in manufacturing grew by 8.2%). Since electricity production increased twice as much as electricity consumption, net electricity exports increased by 62% and equalled 6.0% of output in the third quarter. Trade in electricity between Slovenia and other countries has declined this year, while trade flows have turned towards South Eastern Europe. Over the last few years, the flows of excess electricity from South Eastern Europe were directed to the West, particularly Italy, which has the highest price of electricity in Europe. However, this trend has changed significantly this year. On the request of the EU, Bulgaria had to close down two blocks of the Kozloduy nuclear power plant when it joined the EU, which has resulted in electricity shortages in the region. The substantial electricity flow directed towards the West almost reversed, and the quantity of electricity for trading contracted. The drop in electricity supply was also felt in Slovenia, which takes advantage of its favourable transit position in electricity trading. In the first nine months of the year, electricity imports dropped by 19.2%, year on year, while exports declined by 13.0%. Lower electricity exports from Slovenia were also partly linked to the lower output of hydro-electric power plants, which fell by 15% (18.3% short of the EB plan) due to lower water levels; in addition, hydroelectric power production is more export-competitive than the more expensive thermal electricity production. Electricity exchanges on the Slovenian borders have changed (see graph). Inflows from Austria and Italy rose substantially, while outflows decreased. On the other hand, electricity inflows through the Croatian border dropped sharply, while outflows towards the southeast increased. The net inflow from Austria to Slovenia has increased eightfold this year to total 2,748 GWh, while the net outflow from Slovenia to Italy shrank by 43.1% to 1,259 GWh. In the first nine months of 2006, Slovenia recorded a net electricity inflow of 2,039 GWh on the Croatian border, whereas a net outflow of 1,572 GWh was observed in the same period of 2007. Graph: Contractual electricity exchanges on Slovenia's transmission network on the borders o 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 □ January - September 2006- □ January - September 2007 From Austria From Italy From Croatia To Austria To Italy To Croatia Source of data: ELES, SOPO (Transmission Network System Operator) - flows: electricity flows on the transmission network. Selected Topics Slovenian Economic Mirror IMAD No. 11/2007 pp. 17-23 Fishing Slovenian Economic Mirror IMAD No. 11/2007 p. 19 Marine fishing and farming Change, in % of aquatic animals 2006/05 2006/01 Total, tonnes 2,748 2,442 2,390 2,369 2,300 -2.9 -20.2 marine fishing 1,460 1,088 816 1,022 933 -8.6 -42.4 - fish 1,405 1,016 749 931 870 -6.5 -41.3 - molluscs 55 71 67 91 63 -30.9 -54.5 farming (aquaculture) 1,288 1,354 1,574 1,347 1,367 1.5 8.4 - freshwater farming (fish) 1,168 1,148 1,297 1,120 1,174 4.8 6.0 - sea farming (mariculture) 120 206 277 227 193 -1 5.0 25.4 - fish 37 70 113 26 30 1 4.1 -54.5 - molluscs 83 135 164 201 163 -1 8.8 85.3 Source of data: SORS; calculations by IMAD. Note: 1the table does not include recreational fishing catches (200 tonnes in 2006), which are not classified as a fishing activity according to the SCA. Fishing is one of the branches that contribute very little to the total economic activity in Slovenia. In 2006 the value added in the fishing sector totalled EUR 4.3 m, which corresponds to 0.02% of the economy's total value added. According to the labour force survey, the industry employed 245 persons. Another 208 workers were employed in processing fish products. Both figures together represent a 0.05% share of all employed persons. The activity is most prominent in the Obalno-kraška region. The volume of marine fishing and farming of aquatic animals declined again in 2006. Some 2,300 tonnes of aquatic animals were caught or farmed last year, down 2.9% from the year before, 20.2% from 2000, and 84.3% from 1990. The share of aquaculture (59.4%) was greater than the share of marine fishing (40.6%; see table) for the fourth consecutive year. The decline was the result of a smaller marine catch and farming. The marine catch and farming amounted to 1,126 tonnes (9.8% less than a year ago). Within that, 933 tonnes of animals were caught (down 8.6% from 2005), while 193 tonnes were farmed (down 15.0%). The total quantity of fish obtained from the sea declined; the quantity of molluscs dropped even more. The latter increased rapidly in previous years and accounted for 23.4% of all aquatic animals caught or farmed in the sea in 2005, but its share contracted to 20.0% in 2006. The quantity of aquatic animals bred in fresh waters totalled 1,174 tonnes (up 4.8% from 2005). This equalled 51% of total catch and farming of aquatic animals (47% in 2005, 9% in 1990). This share has been increasing with the expansion of freshwater breeding and, more importantly, the decline in the sea catch. Slovenia has many high-quality fresh water sources, and therefore ample possibilities for further expansion of fish farming The total quantity of aquatic animals has also been declining in the EU-25 on average. In 2005 EU countries caught and farmed 15% fewer aquatic animals than in 2000, while the decrease in Slovenia was 9%. Cyprus and Denmark recorded the largest drops (94% and 40%). Decreases were also registered in the neighbouring Austria and Italy (by 15% and 8%). On the other hand, some countries posted relatively high gains, e.g. Lithuania (75%), Germany (22%) and Hungary (6%). Croatia also enjoyed a high increase (by 75%; see graph). EU countries mostly fish in the North Atlantic Ocean and much less in the Mediterranean. In 2004 these countries caught just 8% of their total catch in the Mediterranean and Black Seas. Their catches in this region dropped by 28% in 1993-2004. As in other world seas, the declining catch levels reflect the slow depletion of the Mediterranean Sea, where the renewal of fish populations cannot keep pace with the volume of fishing. Fishing vessels from countries that are neither members of the EU nor situated in the region caught the largest amounts of animals. Their share in the total catch from these waters was almost 60% in 2004, followed by Turkey (almost 20%), Italy (10%), and Spain and Greece (4% each). Slovenia's share is tiny and is measured in one hundredths. Graph: Changes in the volume of total catches neighbouring countries and the EU average and farming of aquatic animals in Slovenia, the 70 8 50 ¥ I 30 £ 10 0 CT C (ti 10 O -30 □ EU-25 ■ Slovenia H Italy □ Austria □ Hungary □ Croatia j-^i-ni^ m äääi M i I I m 2001 2002 2003 2004 2005 Source of data: Eurostat, calculations by IMAD. 2006 Regional Demographic Trends Slovenian Economic Mirror IMAD No. 11/2007 p. 20 Statistical region Pop. growth index Reg. structure, SLO = 100% Population ageing indexl Young-age dependency ratio2 Natural increase per 1,000 inhabitants Net migration per 1,000 inhabitants Total increase per 1,000 inhabitants 00-07 2007 2000 2007 2000 2007 2000 2006 2000 2006 2000 2006 Osrednjeslovenska 103.5 25.1 85.1 110.1 22.7 20.8 1.5 2.4 2.1 4.0 3.6 6.4 Obalno-kraška 103.2 5.3 110.9 146.0 19.3 16.7 -1.2 -0.8 3.4 5.8 2.2 4.9 Gorenjska 102.0 9.9 79.1 107.9 24.5 21.6 1.8 2.9 -0.2 1.7 1.6 4.7 Goriška 99.8 5.9 104.8 134.1 21.9 19.4 -1.5 -1.4 2.2 3.9 0.7 2.5 Savinjska 101.3 12.9 79.2 104.3 23.3 20.1 0.0 0.4 1.3 4.2 1.3 4.6 Jugovzhod. Slovenija 102.3 7.0 74.6 100.6 26.3 21.7 0.7 1.4 0.5 2.9 1.2 4.3 Pomurska 97.8 6.0 96.8 121.2 21.9 18.7 -2.6 -2.8 -1.0 0.1 -3.6 -2.8 Notranjsko-kraška 102.6 2.6 99.1 123.4 22.8 19.7 -2.3 -0.5 1.7 4.3 -0.6 3.8 Podravska 100.4 15.9 94.4 125.3 21.1 18.4 -1.9 -1.6 1.2 2.4 -0.8 0.8 Koroška 99.3 3.6 74.2 104.7 23.7 19.9 1.3 0.0 0.0 1.3 1.3 1.3 Spodnje-posavska 100.6 3.5 92.8 118.1 23.6 19.9 -2.0 -1.3 3.0 3.3 1.0 2.0 Zasavska 97.6 2.2 100.2 132.0 21.7 17.9 -3.5 -1.6 0.6 0.2 -2.9 -1.4 SLOVENIA 101.5 100.0 87.8 115.1 22.7 19.9 -0.2 0.4 1.3 3.1 1.1 3.5 (15-64) population * 100. The population is increasing in most regions, while concentration continues in the Osrednjeslovenska region. In 2000-2007, the number of inhabitants increased particularly in regions in the western half of the country, notably Osrednjeslovenska and Obalno-kraška. People continue to concentrate in the Osrednjeslovenska region, which is home to more than one quarter of the total population. Population density in this region is almost twice as high as the Slovenian average (198.4 inhab./km2; Slovenia: 99.6 inhab./km2). Zasavska and Podravska also have high population densities. The population is growing particularly due to the positive net migration and partly due to the positive natural increase. In 2006 (latest available data), the Osrednjeslovenska region had the highest natural increase in absolute terms, while Gorenjska recorded the highest relative increase. Further positive increases were noted in Jugovzhodna Slovenija and Savinjska. In all other regions the natural increase was negative - the highest in Podravska (in absolute terms) and in Pomurska (in relative terms). Koroška shifted from a positive natural increase in 2000 to a negative one in 2006; the reverse happened in Savinjska. In contrast with natural increases, most regions enjoyed a positive net migration in 2006. The highest net migration rates were recorded in Osrednjeslovenska (absolute) and Obalno-kraška (relative). Pomurska and Gorenjska posted negative net migration rates. The regional structure of the population is changing; the population ageing index is rising. The share of elderly people is increasing in all regions due to the declining natural increase and lower mortality of the population. In 2000 the ratio was in favour of the elderly only in Obalno-kraška, Goriška and Zasavska; this year it has spread to all regions (see table). The coefficient of variation of the population ageing index for 2007 is 10.4%, down 1.2 p.p. from 2000. This indicates that regional differences are small and narrowing across the years. Due to the rapidly rising share of the elderly population and the declining fertility rates in all regions, the gaps against the Slovenian average and other regions are narrowing particularly in those regions that have historically had a high ageing index and where certain areas are already becoming unpopulated because elderly people are dying and there are no young people. As a result of these trends, the old age dependency ratio has been rising in all regions, while the young age dependency ratio has been declining. Graph: Dependency ratio by region 48 46 44 42 40 38 436 □ 2000 12007 (D (D M O O £ Source of data: SORS, calculations by IMAD. Note: "ratio of the sum of the old and young populations to the working age population (aged 15-64) Source of data: SORS, calculations by IMAD. Notes: ratio of old (65+) to young (0-14) population * 100; ratio of young (0-14) to working age Social Protection Expenditure Slovenian Economic Mirror IMAD No. 11/2007 p. 21 Country Social protection expenditure1 As a % of GDP Per capita in PPS, EU-15 = 100 1997 1998 1999 2000 2001 2002 2003 2004 1997 2001 2004 EU-25 N/A N/A N/A 26.6 26.8 27.0(p) 27.4(p) 27.3(e) N/A 86 85 EU-15 27.6 27.2 27.1 26.9 27.1 27.4(p) 27.7(p) 27.6(e) 100 100 100 Sweden 32.7 32.0 31.7 30.7 31.3 32.3 33.3 32.9(p) 119 116 121 France 30.4 30.0 29.9 29.5 29.6 30.4 30.9 31 2(p) 109 109 107 Denmark 30.1 30.0 29.8 28.9 29.2 29.7 30.7 30.7 118 118 117 Germany 28.9 28.8 29.2 29.2 29.3 29.9 30.2(p) 29.5(p) 106 104 100 Belgium 27.4 27.1 27.0 26.5 27.3 28.0 29.1 29.3 101 103 109 Austria 28.6 28.3 28.7 28.2 28.6 29.1 29.5 29.1 118 113 111 Netherlands 28.7 27.8 27.1 26.4 26.5 27.6 28.3 28.5(p) 110 109 111 Finland 29.1 27.0 26.2 25.1 24.9 25.6 26.5 26.7 100 93 95 UK 27.5 26.9 26.4 27.1 27.5 26.4 26.4(p) 26.3(e) 97 100 96 Italy 24.9 24.6 24.8 24.7 24.9 25.3 25.8(p) 26.1 (p) 90 90 86 Greece 23.3 24.2 25.5 25.7 26.7 26.2 26.0 26.0 52 63 67 Slovenia2 24.5 24.8 24.7 24.9 25.3 25.3 24.6 24.2 55 60 60 Portugal 20.3 20.9 21.4 21.7 22.7 23.7 24.2 24.9(p) 49 59 56 Luxembourg 21.5 21.2 20.5 19.6 20.8 21.4 22.2 22.6(p) 131 144 168 Poland N/A N/A N/A 19.5 20.8 21.2 20.9 20.0(p) N/A 31 30 Hungary N/A N/A 20.7 19.3 19.3 20.3 21.1 20.7 N/A 35 39 Czech Rep. 18.6 18.5 19.2 19.5 19.4 20.2(p) 20.2(p) 196(p) 40 41 43 Spain 20.8 20.2 19.8 19.7 19.5 19.8(p) 19.9(p) 20.0(p) 57 59 61 Malta 17.2 17.1 17.0 16.3 17.1 17.1 17.9 18.8 43 41 41 Slovakia 19.6 20.0 20.0 19.3 18.9 19.0 18.2 17.2(p) 29 30 28 Cyprus N/A N/A N/A 14.8 14.9 16.3 18.5 17.8 N/A 41 47 Ireland 16.4 15.2 14.6 14.1 15.0 16.0 16.5 17.0 58 62 72 Lithuania 13.8 15.2 15.4 15.8 14.7 14.1 13.6 13.3(p) 16 19 20 Latvia 15.3 16.1 17.2 15.3 14.3 13.9 13.4 126(p) 16 17 17 Estonia N/A N/A N/A 14.0 13.1 12.7 12.9 13.4 N/A 18 22 Source of data: Eurostat; calculations by IMAD. Notes: according to the ESSPROS methodology, expenditure on social protection covers eight functions: old age, sickness/health care, unemployment, family/children, disability, survivors, housing, and social exclusion not elsewhere classified; 2the available housing data for Slovenia are incomplete and therefore excluded; PPS - purchasing power standards; p - preliminary data; e - Eurostat estimate; N/A - not available. According to the SORS' provisional data, Slovenia earmarked funds equalling 23.4% of GDP for social protection in 2005, 0.8 p.p. less than in 2004. The decline is largely attributable to the fact that GDP increased faster than social protection expenditure. The latter increased by a nominal 3.9% and by a real 1.4% from 2004. The real increase was relatively small because the level of expenditure for the two largest areas of social protection remained unchanged in real terms. These areas are old age and sickness/health care, which comprise 74.8% in the structure of total social protection expenditure. The expenditure remained unchanged as a result of pension reform and measures aimed at streamlining health care expenditure. Expressed as a share of GDP), Slovenia's social protection expenditure in 2004 (latest data for the EU) was 3.1 p.p. lower than the average level in the EU-25. From 1996 to 2001, the gap between Slovenia and the EU-15 narrowed steadily (data for the EU-25 are not available for the entire period). In 2002, however, it began to widen, mainly because Slovenia's GDP has been rising at a faster pace than the average GDP in the EU-15. Sweden still has the highest social protection expenditure; Slovenia holds 13th place. Compared with the previous year, Slovenia slipped one place on the scale. Estonia is at the rear with 13.4% of GDP. Slovenia scores highest among the 10 new member states. A recalculation based on PPS shows that Luxembourg, Sweden and Denmark have the highest real expenditure on social protection. Slovenia has kept 60% of the EU-15 average from 2001 and is ranked between Spain and Portugal (see table)._ In the structure of social protection receipts, the share of employers is decreasing, while the shares of insured persons and the government are increasing. Data for 2005 show that social contributions accounted for 68% (67% in 2004) of total social protection expenditure and government contributions were 31% (32% in 2004), while 0.8% came from other sources (1.3% in 2004). The social security contributions of insured persons were the highest in nominal terms (EUR 2,667.0 m), followed by government contributions (EUR 2,058.3 m), social security contributions paid by employers (EUR 1,827.9 m) and other receipts (EUR 54.8 m). Compared with 1996, the structure of social protection receipts has changed noticeably. The contributions of employers contracted by 4.5 p.p. (from 32.5% to 28%), while the contributions of insured persons increased by 2 p.p. Government contributions increased as well (by 2.9 p.p.). Other receipts declined by 0.2 p.p. Social protection expenditure is largely used for old age and sickness/health care. In 2005, Slovenia earmarked 42.5% of its total social protection expenditure for old age (43% in 2004), 32.3% for sickness/health care (33% in 2004), 8.5% for invalidity (8%), 8.6% for family/children (8.5%), 3.3% for unemployment (3.1%), and 2% for survivors (1.6%). Expenditure on social exclusion not elsewhere classified remained at the 2004 level (2.8%). A comparison with 2000 shows that increases were only observed in the expenditure on sickness/health care (by 1.6 p.p.) and social exclusion not elsewhere classified (by 1.2 p.p.). The latter is the result of amended legislation, which raised benefits for the poor. Other expenditures within the structure declined or remained unchanged. Science and Technology Students Slovenian Economic Mirror IMAD No. 11/2007 p. 22 -1-' Science and technology students' Students of science, mathematics and computing Students of engineering, manufacturing and construction Number A of number, in % Percentage relative to total students Number A of number, in % Percentage relative to total students 2005 04-05 2004 2005 2005 04-05 2004 2005 EU-27 1,715,271 0.2 10.6 10.5 2,357,442 -0.4 14.7 14.4 EU-25 1,667,723 0.1 11.0 10.9 2,156,735 -0.7 14.3 14.0 Belgium 24,016 -32.8 9.3 6.2 40,451 -8.6 11.5 10.4 Bulgaria 12,835 11.6 5.0 5.4 50,504 0.1 22.1 21.2 Czech R. 31,859 6.1 9.4 9.5 66,248 0.9 20.6 19.7 Denmark 18,955 -4.1 9.1 8.2 24,005 6.7 10.4 10.3 Germany 340,299 -2.0 14.9 15.0 356,636 -0.9 15.4 15.7 Estonia 7,025 6.8 10.0 10.4 8,269 5.2 12.0 12.2 Ireland 22,851 -1.1 12.3 12.3 19,233 -7.5 11.0 10.3 Greece 101,504 2.2 16.6 15.7 106,528 17.8 15.1 16.5 Spain 220,659 -8.7 13.1 12.2 319,340 -1.7 17.7 17.6 Italy 155,720 1.3 7.7 7.7 320,343 0.2 16.1 15.9 Cyprus 2,575 -1.8 12.6 12.8 1,009 19.7 4.0 5.0 Latvia 6,853 -22.4 6.9 5.2 12,352 0.6 9.6 9.5 Lithuania 12,197 8.1 6.2 6.2 36,376 2.2 19.5 18.6 Hungary 23,771 -1.7 5.7 5.5 53,965 -0.8 12.9 12.4 Malta 561 19.9 5.9 5.9 737 5.6 8.9 7.8 Netherlands 42,844 3.9 7.6 7.6 44,475 -0.2 8.2 7.9 Austria 29,304 2.7 12.0 12.0 29,674 -1.1 12.6 12.1 Poland 174,751 25.9 6.8 8.3 248,542 -8.8 13.3 11.7 Portugal 28,982 -6.4 7.8 7.6 83,079 -2.7 21.6 21.8 Romania 34,713 1.6 5.0 4.7 150,203 3.5 21.2 20.3 Slovenia 6,029 12.5 5.1 5.4 17,753 1.4 16.8 15.8 Slovakia 16,419 10.2 9.1 9.1 31,521 10.1 17.4 17.4 Finland 35,468 1.9 11.6 11.6 80,827 0.8 26.7 26.4 Sweden 40,520 -2.1 9.7 9.5 70,089 -2.6 16.8 16.4 UK 324,561 -0.1 14.5 14.2 185,283 2.6 8.0 8.1 Source of data: Eurostat; calculations by IMAD. Notes: 1Science and technology indicators according to ISCED 97 comprise two fields of study: science, mathematics and computing (ISC 42, 44, 46 and 48) and engineering, manufacturing and construction (ISC 52, 54, 56). Classification is based on the International Standard Classification of Education (ISCED 97) and the Eurostat Fields of Education and Training Manual (1999). Data for France and Luxembourg are not available. 2Tertiary education includes post-secondary vocational studies, higher undergraduate studies and _post-graduate studies._ Science and technology graduates are a key factor of innovation in knowledge-based societies. The Resolution on the National Programme of Higher Education 2007-2010 sets out several goals: increasing the expenditure on higher education and research as a share of GDP, increasing the number of higher education institutions, promoting the internationalisation of higher education, and so on. It also mentions the need to encourage enrolment in science and technology programmes. One way to do this is by financing houses of experiments and various science and technology competitions, and by presenting science programmes to youth. Between 2004 and 2005, the share of science and technology students relative to total number of students in Slovenia declined, contrary to the average trend in the EU-27. In 2005, Slovenia had 21.2% science and technology students, while the European average was 24.9%. The highest percentages (over 30%) were recorded in Finland, Greece and Germany. Slovenia was ranked in the lower half of EU countries. It occupied 19th place in 2005 and did not improve its position from 2004. The latest available figures for Slovenia on the number of tertiary science and technology students (see note 2 below table) for the academic year 2006/2007 indicate that some positive changes have occurred. The percentage of students in this field increased (to 22.3%), and the number of students climbed to 25,820, the highest figure in the period 2000-2007. More favourable trends were observed in the number of science and technology students. Between 2004 and 2005, this number increased more than in most other European countries. Slovenia's increase also topped the EU-27 average (4.0% over -0.1%). The number of science and technology students in Slovenia also rose at a faster pace than in the EU-27 on average in 2000-2005 (see Graph 1). It might be worthwhile to also promote greater enrolment of women in science and technology programmes in Slovenia. Although 58.3% of all tertiary students in Slovenia are women (figure for 2006/2007), their share in science and technology programmes is much lower than the share of men (26.9% in 2006/2007). The share of women in 2005 was lower than the average share in the EU-27 (26.1% compared to 29.6%). The gap vis-a-vis the European average largely reflects the low percentage of students in the field of science, mathematics and computing. The share of students in the field of engineering, manufacturing Science and Technology Students Slovenian Economic Mirror IMAD No. 11/2007 p. 23 and construction in Slovenia is slightly above the EU average (see table). Although the percentage of science, mathematics and computing students in Slovenia increased in 2000-2005, the increase was not significant (0.4 p.p.; EU-27: 0.3 p.p.). At the same time, the share of engineering, manufacturing and construction students declined (by 2.6 p.p.; EU-27: by 0.5 p.p.). In 2006/2007, the percentage of science and technology students in higher undergraduate programmes increased somewhat. It reached 21.5% (2005/2006: 20.5%), while the number of these students rose to 19,615 (2005/2006: 18,861). The increase was largely underpinned by the 4.8% increase in the number of engineering, manufacturing and construction students (to 14,452), whereas the increase in the number of science, mathematics and computing students totalled 1.9% (to 5,163). The percentages of students in both fields rose to 16.7% and 5.6%, respectively. In Slovenia some science and technology programmes should increase enrolment, while others should increase the number of available places. The number of students in each field of study largely depends on the number of available enrolment places and the volume of student enrolment, which is determined by demand on the labour market and expected income after completed studies. Data for the academic year 2006/2007 show that the ratio of applications to available places in postgraduate programmes differs considerably across various groups of science and technology programmes. For example, in some fields with shortages on the labour market, the number of applications is lower than the number of available places (technology; mechanical engineers, electrical engineers), whereas there is a surplus of applications in computing. This calls for the application of two sets of measures in order to increase enrolment levels in certain fields. First, potential students should be encouraged to choose a study field where interest is lower than available capacities. In this regard, companies that need specialists in such fields could take on a more active role by carrying out various activities (providing grants, carrying out promotional activities in secondary schools, organising open days, etc.). Second, the number of available places should be increased in oversubscribed study fields for which there are shortages on the labour market. In 2000-2005, Slovenia's lag in the number of science and technology graduates per 100,000 employees aged 25-34 increased. The value of the indicator increased in Slovenia due to the growing number of science and technology graduates (from 1,031 in 2000 to 1,179 in 2005). However, the lag behind the European average (1,655; 2000: 1,298) increased as well. The gap with the average of OECD countries (1,675) was even greater. Since the number of science and technology students in Slovenia is increasing, the positive trend of the analysed indicator is expected to continue in the future. Graph 1: Change in the number of science and technology students in 2000-2005, in % 100 75 50 25 0 -25 o LU M LU O W « Source of data: Eurostat; calculations by IMAD. Graph 2: Number of undergraduate students in Slovenia (2000/2001-2006/2007) □ 2000/2001 □ 2005/2006 2006/2007 Total Science and Technology Source of data: SORS. Science, mathematics and computing Engineering, manufacturing and construction % Statistical Appendix Slovenian Economic Mirror IMAD No. 11/2007 pp. A 1-17 Gross Domestic Product / I Slovenian Economic Mirror IMAD No. 11/2007 p. A 2 2003-2006 constant previous year prices, 2007-2009 constant 2006 prices In SIT m In EUR m Real growth rates in % 2007 2008 2009 2007 2008 2009 2003 2004 2000 2006 forecast 2004 2000 2006 forecast VALUE ADDED BY ACTIVITIES AND GROSS DOMESTIC PRODUCT A Agriculture, hunting, forestry 123,669 147,506 139,222 142,730 608 617 627 15.1 -4.4 -3.8 1.0 1.5 1.5 B Fishing 800 875 1,014 996 4 4 4 -7.0 20.4 1.5 0.0 1.0 1.0 C Mining and quarrying 24,674 28,084 30,647 32,719 137 137 1 37 6.8 0.4 7.5 1.0 0.5 -0.5 D Manufacturing 1,278,086 1,385,784 1,441,576 1,538,233 6,927 7,339 7,732 3.7 3.6 8.5 8.5 6.0 5.3 E Electricity, gas and water supply 140,397 153,187 174,594 187,081 769 780 784 6.8 5.7 5.7 -3.0 1.5 0.5 F Construction 264,015 282,539 316,444 394,283 1,892 2,062 2,073 0.0 4.9 15.2 14.0 9.0 0.5 G Wholesale, retail; certain repairs 563,223 628,070 679,306 753,850 3,408 3,553 3,689 4.2 4.5 6.1 7.5 4.3 3.8 H Hotels and restaurants 108,731 115,150 127,161 137,422 634 665 696 -1.1 1.2 2.9 3.0 5.0 4.5 I Transport, storage and communications 357,817 402,669 442,608 500,231 2,221 2,342 2,495 5.3 6.1 9.4 6.5 5.5 6.5 J Financial intermediation 222,430 263,041 278,993 285,593 1,403 1,486 1,584 17.1 10.5 9.8 7.0 6.0 6.5 K Real estate, renting and business services 807,976 886,022 978,785 1,047,398 4,695 4,895 5,118 2.8 3.5 3.7 4.8 4.3 4.5 L Public administration and defence 300,255 337,436 356,269 375,972 1,633 1,665 1,699 4.8 2.9 2.9 1.2 2.0 2.0 M Education 271,188 297,113 328,786 347,104 1,527 1,554 1,583 2.3 3.3 1.7 1.8 1.8 1.8 N Health and social work 247,634 275,279 299,347 310,503 1,345 1,385 1 ,427 5.6 5.2 1.6 1.7 3.0 3.0 O Other community and personal services 167,258 183,431 209,598 219,146 1,002 1,042 1,084 2.8 3.3 1.2 3.5 4.0 4.0 P Private households with employed persons 1,007 1,103 1,436 1,114 5 5 5 -8.1 5.9 -3.5 -4.1 0.0 0.0 VALUE ADDED (A+...+P) 4,879,160 5,387,291 5,805,787 6,274,375 28,210 29,530 30,736 4.4 4.0 6.0 5.9 4.7 4.1 Taxes on products and services 751,700 828,100 883,539 919,784 4,143 4,319 4,485 4.2 4.7 3.9 4.9 4.3 3.8 Less: subsidies on products and services 23,598 29,272 31,323 38,790 140 144 1 47 -2.0 -0.4 10.0 1.0 3.0 2.0 GDP 5,607,262 6,186,119 6,658,003 7,155,369 32,213 33,706 35,073 4.4 4.1 5.7 5.8 4.6 4.1 Source of data: SORS 2003-2006, IMAD's Autumn Forecast 2007. Real growth rates: SORS 2004-2006; IMAD's calculations and Autumn Forecast 2007. Note: a comparison of nominal values is possible under the technical assumption of the SIT/EUR exchange rate = 239.64, which has been used since 2007. Gross Domestic Product / II Slovenian Economic Mirror IMAD No. 11/2007 p. A 3 Current prices, in SIT m Current prices, in EUR m Structure in %, current prices, GDP=100 2003 2004 2005 2006 2007 2008 2009 2004 2005 2006 2007 2008 2009 forecast forecast SUPPLY AND USE OF GROSS NATIONAL DISPOSABLE INCOME 1. GROSS DOMESTIC PRODUCT 5,922,917 6,392,985 6,768,266 7,296,627 33,177 35,953 38,482 100.0 100.0 100.0 100.0 100.0 100.0 2. Net primary income with the rest of the world -46,503 -75,128 -58,391 -78,661 -497 -474 -534 -1.2 -0.9 -1.1 -1.5 -1.3 -1.4 3. GROSS NATIONAL INCOME (1+2) 5,876,414 6,317,857 6,709,875 7,217,966 32,680 35,479 37,949 98.8 99.1 98.9 98.5 98.7 98.6 4. Net current transfers with the rest of the world 6,994 -10,555 -34,525 -50,281 -96 -81 -39 -0.2 -0.5 -0.7 -0.3 -0.2 -0.1 5. GROSS NATIONAL DISPOSABLE INCOME (3+4) 5,883,408 6,307,302 6,675,350 7,167,684 32,585 35,398 37,909 98.7 98.6 98.2 98.2 98.5 98.5 6. Final consumption expenditure 4,424,637 4,703,677 4,964,645 5,299,860 23,750 25,663 27,302 73.6 73.4 72.6 71.6 71.4 70.9 Private consumption 3,275,936 3,473,290 3,653,249 3,896,317 17,522 18,861 20,045 54.3 54.0 53.4 52.8 52.5 52.1 Government consumption 1,148,701 1,230,387 1,311,395 1,403,543 6,229 6,802 7,257 19.2 19.4 19.2 18.8 18.9 18.9 7. GROSS SAVINGS (5-6) 1,458,771 1,603,625 1,710,706 1,867,824 8,834 9,735 10,607 25.1 25.3 25.6 26.6 27.1 27.6 8. GROSS CAPITAL FORMATION 1,510,498 1,770,142 1,846,356 2,068,981 10,000 10,854 11,378 27.7 27.3 28.4 30.1 30.2 29.6 9. SURPLUS ON THE CURRENT ACCOUNT WITH THE ROW (7-8) -51,727 -166,516 -135,650 -201,156 -1,165 -1,118 -770 -2.6 -2.0 -2.8 -3.5 -3.1 -2.0 Source of data: SORS 2003-2006, BS; IMAD's Autumn Spring Forecast 2007. Note: a comparison of nominal values is possible under the technical assumption of the SIT/EUR exchange rate = 239.64, which has been used since 2007. EXPENDITURE STRUCTURE OF GROSS DOMESTIC PRODUCT, 2003-2006 constant previous year prices, 2007-2009 constant 2006 prices In SIT m In EUR m Real growth rates, in % GROSS DOMESTIC PRODUCT (3+4+5) 5,607,262 6,186,119 6,658,003 7,155,369 32,213 33,706 35,073 4.4 4.1 5.7 5.8 4.6 4.1 1. Exports of goods and services 3,157,565 3,653,898 4,145,398 4,788,469 23,259 25,660 28,136 12.5 10.1 12.3 13.4 10.3 9.7 2. Imports of goods and services 3,194,810 3,694,754 4,101,467 4,830,821 23,762 26,173 28,333 13.3 6.7 12.2 14.2 10.1 8.2 3. EXTERNAL BALANCE * (1-2) -37,245 -40,856 43,931 -42,352 -502 -514 -197 -0.5* 2.0* 0.0* -0.6* 0.0* 0.9* 4. FINAL CONSUMPTION 4,195,627 4,557,677 4,836,456 5,168,882 22,952 23,826 24,583 3.0 2.8 4.1 3.8 3.8 3.2 Private consumption 3,112,561 3,373,478 3,566,122 3,800,103 16,946 17,624 18,220 3.0 2.7 4.0 4.2 4.0 3.4 Government consumption (individual and collective) 1,083,066 1,184,199 1,270,334 1,368,779 6,006 6,201 6,363 3.1 3.2 4.4 2.6 3.2 2.6 5. GROSS CAPITAL FORMATION 1,448,880 1,669,298 1,777,616 2,028,838 9,763 10,394 10,687 10.5 0.4 9.9 13.1 6.5 2.8 Gross fixed capital formation 1,368,338 1,531,410 1,666,102 1,872,354 9,110 9,679 9,931 7.3 2.5 8.4 14.5 6.2 2.6 Changes in inventories and valuables* 80,542 137,887 111,514 156,484 653 714 756 0.9* -0.5* 0.6* -0.1* 0.2* 0.1* Source of data: Nominal: SORS 2003-2006, BS; IMAD's Autumn Forecast 2007. Real growth rates: SORS 2004-2006, BS; IMAD's Autumn Forecast 2007. Notes: a comparison of nominal values is possible under the technical assumption of the SIT/EUR exchange rate = 239.64, which has been used since 2007; *as contributions to real GDP growth (in percentage points). Slovenian Economic Mirror IMAD Industrial Production No. 11/2007 p. A 4 2006 2007 2006 2007 2002 2003 2004 2000 2000 QIII QIV QI QII QIII 8 9 10 11 12 1 2 3 4 0 6 7 8 9 INDUSTRIAL PRODUCTION by sectors *, indices, 2000=100; 2007 data are provisional INDUSTRY, total 105.4 106.9 112.8 116.5 123.7 122.1 130.6 128.6 133.6 130.7 108.5 133.0 134.4 139.7 117.6 125.0 121.4 139.5 128.9 135.4 136.6 136.5 118.9 136.8 C Mining and quarrying 99.2 104.9 97.6 104.2 115 106.6 134.5 113.5 129.9 107.2 102.4 119.1 135.5 152.6 115.3 94.1 107.6 138.7 133.6 135.2 120.8 92.1 121.4 108.0 D Manufacturing 104.8 106.5 111.6 115.6 123.2 122.5 129.3 128.9 135.4 132.5 108.0 134.0 134.2 138.9 114.8 124.6 121.8 140.4 129.8 137.2 139.2 139.2 119.0 139.3 DA Food, beverages, tobacco 98.6 99.6 89.4 88.0 87.9 88.4 95.5 79.8 90.9 89.9 87.3 90.0 88.9 104.7 92.8 76.1 76.2 87.0 89.6 90.9 92.1 92.0 90.8 87.0 DB Textiles & textile products 80.5 71.3 61.7 54.1 52.3 54.3 47.5 56.7 51.6 50.1 44.3 58.5 51.1 50.2 41.2 55.1 52.4 62.5 52.0 49.8 53.1 54.3 41.2 54.9 DC Leather & leather products 83.6 72.7 68.2 72.7 76.5 72.1 77.7 72.8 52.3 59.5 66.5 82.9 90.3 91.1 51.6 86.0 61.0 71.5 53.2 51.2 52.4 80.8 51.6 46.0 DD Wood & wood products 94.3 91.0 94.7 100.7 104.1 104.5 108.4 111.6 124.6 114.2 88.4 115.2 114.7 119.6 91.0 97.1 110.7 127.1 120.1 129.0 124.8 122.4 103.6 116.6 DE Paper, publishing, printing 1 100.9 100.6 101.2 104.8 103.9 102.0 109.5 103.0 106.6 106.7 97.9 107.1 110.3 113.4 104.8 103.2 93.4 112.3 104.0 110.2 105.7 111.8 106.0 102.4 DF Coke, petrol. prod., nuclear fuel 2 34.2 36.3 - - - - 20.9 22.3 18.6 20.1 15.8 19.9 21.1 21.6 19.9 22.8 21.2 23.0 18.8 18.4 18.6 20.2 18.8 21.2 DG Chem., prod., man-made fibers 114.5 128.0 147.5 158.7 179.4 172.1 189.3 201.1 213.9 218.8 154.4 170.4 207.4 198.6 161.9 209.4 193.6 200.4 206.8 199.2 235.8 241.5 180.7 234.3 DH Rubber & plastic products 99.8 103.6 116.5 122.2 130 136.9 135.9 135.1 141.2 146.6 124.8 151.4 145.6 149.7 112.3 127.3 125.5 152.6 131.0 146.7 146.0 145.4 137.2 157.1 DI Non-metal mineral products 100.9 101.6 84.6 78.7 83.6 90.6 89.2 78.1 92.9 92.3 85.3 94.9 96.4 98.1 73.1 71.4 72.5 90.5 85.4 97.8 95.4 96.2 87.8 92.9 DJ Basic metals & fabricated. prod. 108.3 112.0 107.8 116.3 129.8 131.5 136.6 143.9 147.2 140.4 120.0 141.5 147.6 146.1 116.1 142.7 135.4 153.6 142.5 148.3 150.7 146.2 131.2 143.7 DK Machinery & equipment nec. 128.6 120.9 138.5 140.9 149.5 144.7 161.7 162.8 165.2 160.2 121.1 159.4 162.4 173.4 149.2 151.4 154.1 182.9 161.7 167.3 166.5 162.9 138.8 179.0 DL Electrical & optical equipment 110.3 122.8 153.0 157.7 181.5 183.0 193.6 186.3 200.4 193.9 152.0 225.1 193.6 210.0 177.2 173.4 175.4 210.2 185.3 214.2 201.8 192.2 173.0 216.4 DM Transport equipment 106.4 111.7 152.7 184.7 177.7 149.4 173.3 195.2 206.4 196.1 75.4 195.8 175.0 180.3 164.6 179.6 184.6 221.5 184.4 216.5 218.4 230.9 141.6 215.8 DN Manufacturing nec. 106.3 102.6 103.4 108.7 107.5 107.8 111.1 105.4 106.5 97.5 97.5 117.7 115.0 122.2 96.0 96.6 104.5 115.2 103.3 110.7 105.5 105.6 81.6 105.3 E Electricity, gas & water supply 3 115.3 111.3 132.9 130.9 129.6 117.7 140.9 126.4 104.2 111.9 113.1 118.7 130.7 137.5 154.6 142.4 117.5 119.3 108.3 102.4 101.8 115.0 111.2 109.4 NUMBER OF PERSONS IN PAID EMPLOYMENT IN INDUSTRY 4 Total, in 1000 259.9 255.1 251.7 247.3 243.3 243.0 244.7 244.6 245.5 244.8 242.7 243.3 244.6 245.4 244.0 244.1 244.8 245.0 245.2 245.5 245.6 245.1 244.6 244.8 C Mining & quarrying 5.1 4.8 4.4 4.2 4.0 4.0 3.9 3.9 3.8 3.7 4.0 4.0 3.9 3.9 3.9 3.9 3.9 3.8 3.8 3.8 3.8 3.8 3.7 3.7 D Manufacturing 243.1 238.9 236.1 231.8 227.9 227.5 229.2 229.4 230.2 229.6 227.2 227.8 229.1 229.9 228.7 228.9 229.6 229.7 230.0 230.2 230.3 229.8 229.3 229.7 E Electricity, gas & water supply 11.7 11.4 11.3 11.4 11.4 11.5 11.5 11.3 11.5 11.5 11.5 11.5 11.5 11.5 11.4 11.3 11.3 11.4 11.5 11.5 11.6 11.5 11.5 11.4 CONSTRUCTION 5, real indices of construction put in place, indices 2000=100 Construction 97.9 105.7 108.4 111.7 128.8 149.0 169.4 104.0 157.8 174.2 132.3 174.2 188.1 163.2 157.0 88.7 98.1 125.1 136.2 171.0 166.3 166.1 174.2 182.3 Buildings 104.2 104.9 114.6 126.4 144.2 165.3 179.6 123.0 172.7 182.2 156.1 187.1 191.9 169.9 177.0 107.2 115.3 146.5 150.9 182.7 184.6 184.8 183.1 178.8 Civil engineering 92.1 106.4 102.6 98.0 114.5 133.8 160.0 91.5 148.1 168.9 110.2 162.3 184.6 157.1 138.4 76.6 86.8 111.1 126.5 163.3 154.4 153.8 168.3 184.5 Persons in paid employment in construction 4 99.4 99.1 97.5 102.0 109.6 113.1 114.3 114.1 120.3 125.3 112.9 114.2 114.9 115.2 112.7 112.9 114.4 114.8 118.0 120.3 122.7 124.0 125.2 126.8 Source of data: SORS. Notes: *From February 2004 onwards the industrial production indices have been provisional. For the period up until January 2004 they are calculated according to data on produced quantities of industrial goods. From February 2004 onwards, data on production value have been taken as the basis for the calculation. The value of production is calculated according to the following formula: turnover in the month (x) + value of stocks in the month (x) - value of stocks in the month (x-1).1Enterprises with activity of publishing are excluded; 2data not published because of confidentiality; 3only companies with activity of electricity supply are included. In January 2005, the SORS adopted a new methodology of obtaining data on persons in paid employment. The new source of data for employed and self-employed persons excluding farmers is the Statistical Register of Employment (SRE), while data on farmers are forecast using the ARiMa model based on quarterly figures for farmers from the Labor Force Survey. Data for previous years dating back to January 2000 have also been calculated according to the new methodology. 5The survey covers all larger construction enterprises and some other enterprises that perform construction work. Slovenian Economic Mirror IMAD Production No. 11/2007 p. A 5 2006 2007 2006 2007 2002 2003 2004 2005 2006 QIII QIV QI QII QIII 9 10 11 12 1 2 3 4 5 6 7 8 9 TRANSPORT Passenger-km in transport for hire or reward, in m 1,143 1,065 980 848 850 180 223 209 222 167 85 79 77 66 70 62 76 69 80 73 45 43 79 Passenger-km in rail transport, in m 749 778 764 777 788 189 210 196 202 - 70 72 71 69 - - - - - - - - - Passenger-km in air transport, in m 794 837 896 1 ,01 9 1,044 411 200 183 289 459 121 83 60 57 62 56 65 79 88 121 161 1 58 139 Tonne-km in rail transport, in m 3,078 3,274 3,466 3,402 3,373 817 942 918 913 - 269 315 321 306 - - - - - - - - - Tonne-km in maritime transport, in m 28,578 28,361 37,047 52,513 49,155 12,618 11,494 10,813 13,224 12,050 3,954 4,381 2,846 4,267 4,477 2,949 3,387 4,884 3,967 4,373 4,585 3,676 3,790 Tonne-km in road transport, in m 6,609 7,040 9,007 11,033 12,112 2,778 3,020 3,103 3,292 - - - - - - - - - - - - - - Urban passenger traffic, in m 103.9 98.4 100.2 97.2 94.0 14.6 27.7 26.3 23.3 14.4 6.9 9.1 9.4 9.2 8.7 8.5 9.1 8.3 7.8 7.2 4.1 3.8 6.6 Airport passengers traffic, in 000 866 922 1,047 1,228 1,339 488 282 251 382 535 1 48 116 88 79 82 78 91 108 1 23 152 184 1 81 169 Harbour freight transport, in 000 t 9,305 10,788 12,063 12,625 15,462 3,555 4,158 4,282 3,967 3,406 1,416 1,426 1,362 1,370 1,197 1,323 1,762 1,091 1,383 1,493 1,113 1,167 1,126 Transport of gas, million m3 1,007 1,098 1,097 1,136 - - - - - - - - - - - - - - - - - - - TOURISM, overnight stays, in 000 Total 7,321 7,503 7,589 7,573 7,722 3,115 1,389 1,472 1,997 3,288 749 548 407 434 472 497 502 568 619 811 1,226 1325 736 Domestic tourists 3,300 3,327 3,226 3,173 3,233 1,226 620 700 786 1,241 271 219 197 203 177 282 242 208 239 339 503 489 248 Foreign tourists 4,021 4,175 4,363 4,399 4,489 1,889 769 771 1,211 2,047 478 329 209 231 296 215 261 359 380 472 723 836 488 Health resorts 2,327 2,360 2,417 2,464 2,434 853 484 555 627 832 234 225 192 184 175 191 189 205 196 225 277 323 231 Seaside 2,052 2,010 2,002 1,949 1,871 961 216 203 524 939 197 118 84 68 47 62 94 139 1 52 233 376 366 197 AGRICULTURE, slaughter in slaughterhouses, in 000 tons Cattle 40.5 43.1 40.1 37.4 37.9 8.4 11.7 8.0 8.6 8.1 2.9 3.4 4.0 4.3 2.6 2.5 2.9 3.0 2.9 2.7 2.6 2.7 2.7 Pigs 37.1 37.3 34.6 31.7 33.6 7.9 8.4 8.2 8.5 7.8 2.6 2.7 2.6 3.1 2.7 2.5 2.9 2.9 2.9 2.6 2.7 2.6 2.5 Poultry 51.4 56.0 52.0 53.4 49.2 12.3 12.5 13.9 14.3 15.2 3.8 4.2 4.1 4.1 4.6 4.1 5.2 4.6 4.7 5.0 5.2 5.1 4.8 Purchase of agricultural products, SIT bn, since 2007 in EURO m 101.6 103.3 102.4 103.7 106.7 26.1 33.4 101.3 109.7 120.8 9.3 9.6 10.5 13.3 32.2 31.1 37.9 37.5 38.4 33.8 38.3 41.8 40.7 FISHING, in tons Catches in marine waters 1459.8 1087.5 815.9 1021.6 736.7 271.3 179.3 174.5 246.0 230.9 94.3 91.4 51.8 36.1 83.4 65.3 25.8 39.6 77.8 128.7 51.1 123.4 56.4 Source of data: SORS. Balance of Payments Slovenian Economic Mirror IMAD No. 11/2007 p. A 6 2002 2003 2004 2005 2006 2006 2007 2006 2007 QIII QIV QI QII QIII 9 10 11 12 1 2 3 4 5 6 7 8 9 BALANCE OF PAYMENTS, in EUR m Current account 247 -196 -720 -561 -857 -261 -512 -240 -271 -307 -60 -54 -197 -261 -30 -158 -53 -125 -139 -8 -91 -35 -181 Goods 1 -265 -543 -1,009 -1,026 -1,151 -257 -570 -226 -382 -355 -65 -93 -197 -281 -79 -76 -71 -143 -161 -78 -91 -87 -176 Exports 11,082 11,417 12,933 14,599 17,028 4,168 4,543 4,779 5,003 4,891 1,537 1,579 1,599 1,365 1,470 1,512 1,798 1,577 1,713 1,712 1,728 1,478 1,685 Imports 11,347 11,960 13,942 15,625 18,179 4,425 5,113 5,006 5,385 5,246 1,602 1,672 1,796 1,645 1,549 1,588 1,869 1,721 1,874 1,791 1,819 1,565 1,862 Services 620 540 688 849 866 299 160 204 311 363 109 85 28 46 98 34 72 84 108 119 94 1 36 132 Exports 2,440 2,465 2,783 3,143 3,449 1,072 855 830 1,029 1,311 326 292 267 295 298 233 298 333 339 357 441 460 410 Imports 1,820 1,925 2,095 2,294 2,584 773 695 625 718 948 217 207 239 249 200 199 227 249 231 238 347 323 278 Income -1 68 -219 -322 -288 -398 -227 -100 -144 -156 -187 -69 -48 -13 -38 -42 -49 -53 -51 -51 -54 -59 -63 -65 Receipts 490 510 530 648 902 241 242 217 271 279 88 77 72 94 71 70 75 89 92 91 90 91 98 Expenditure 657 728 852 936 1,300 468 342 361 427 466 157 125 85 132 114 119 1 28 139 143 144 149 1 54 163 Current transfers 60 26 -76 -97 -173 -75 -2 -74 -44 -128 -35 2 -15 11 -7 -68 0 -15 -35 5 -34 -21 -73 Receipts 500 474 561 738 785 1 65 237 197 227 202 48 85 59 93 51 59 87 75 60 92 63 86 53 Expenditure 439 449 638 835 958 240 238 272 271 329 83 83 74 82 58 128 86 90 95 87 97 1 07 126 Capital and financial account 3 46 698 818 1,050 504 424 516 353 150 170 -107 23 508 -147 340 322 112 -16 257 126 13 11 Capital account -164 -165 -96 -114 -131 -39 -96 22 -12 -35 -29 -7 -12 -77 12 20 -10 11 -8 -14 -3 -3 -30 Financial account 167 211 794 932 1,182 543 519 494 365 185 199 -100 35 584 -159 320 332 101 -7 271 129 16 40 Direct investment 1,556 -151 224 -43 -207 136 -154 -93 0 -110 38 -48 -194 88 -84 -70 62 -16 -73 88 -92 44 -62 Domestic abroad -166 -421 -441 -516 -718 -164 -218 -307 -233 -327 -93 -54 -168 4 -103 -148 -56 -112 -102 -19 -140 -44 -144 Foreign in Slovenia 1,722 270 665 473 512 300 64 214 233 218 131 6 -26 84 19 78 118 96 29 107 48 88 82 Portfolio investment -69 -223 -637 -1,466 -1,444 -336 -677 -626 -1,205 348 11 -65 -183 -429 -905 -151 430 -416 -620 -169 234 120 -5 Financial derivatives 0 0 6 -10 -13 -3 2 2 -2 -12 2 -3 2 4 5 -4 1 0 0 -2 -6 -5 -1 Other investment 565 849 945 2,639 1,564 63 954 1,156 1,583 -74 129 84 324 545 639 669 -153 478 751 355 -139 -135 200 Assets -538 -730 -1,308 -1,459 -1,936 -384 -264 -2,326 -350 -1,475 -393 83 -23 -324 -712 -793 -821 -797 517 -70 -603 -362 -510 Commercial credits -135 -116 -237 -226 -435 -77 120 -375 -194 -33 -119 -90 -57 267 -25 -160 -190 -95 -8 -91 32 151 -215 Loans -1 74 -223 -281 -340 -733 -87 -297 -351 -439 -421 -71 -50 -75 -172 -18 -75 -258 -45 -203 -191 -215 -145 -62 Currency and deposits -157 -323 -720 -872 -747 -194 -90 -1,623 270 -1,010 -187 219 103 -412 -736 -552 -334 -653 725 198 -409 -370 -231 Other assets -71 -68 -69 -21 -21 -26 3 23 12 -11 -16 4 6 -7 68 -6 -39 -3 3 13 -11 2 -1 Liabilities 1,104 1,579 2,252 4,098 3,500 446 1,218 3,481 1 ,934 1,401 522 1 348 869 1,351 1,462 668 1,275 234 425 464 227 710 Commercial credits 95 59 214 291 468 63 282 274 57 -54 52 131 117 34 -171 219 225 -17 84 -10 53 -297 190 Loans 838 1,123 1,671 2,731 2,064 357 467 15 1,546 894 252 -43 299 210 142 -54 -72 1,021 294 230 216 251 427 Deposits 130 428 335 1,053 998 39 448 3,208 338 567 221 -82 -69 599 1,406 1,282 521 279 -140 199 188 281 98 Other liabilities 39 -31 33 23 -30 -12 21 -16 -7 -6 -2 -5 1 26 -25 16 -6 -9 -5 6 7 -8 -6 International reserves 2 -1,885 -264 256 -1 89 1,281 684 394 55 -1 1 32 20 -68 86 376 185 -123 -7 55 -65 -1 132 -8 -91 Statistical error -250 150 22 -257 -194 -243 88 -275 -82 157 -110 161 174 -246 176 -182 -270 13 154 -250 -36 22 171 EXPORTS AND IMPORTS BY END-USE OF PRODUCTS, in EUR m Export of investment goods 1,542 1,634 1,873 2,058 2,492 622 705 N/A N/A N/A 231 224 245 236 N/A N/A N/A N/A N/A N/A N/A N/A N/A Intermediate goods 5,245 5,463 6,342 6,990 8,429 2,094 2,203 N/A N/A N/A 770 772 810 621 N/A N/A N/A N/A N/A N/A N/A N/A N/A Consumer goods 4,175 4,188 4,568 5,349 5,840 1,366 1,589 N/A N/A N/A 515 560 532 497 N/A N/A N/A N/A N/A N/A N/A N/A N/A Import of investment goods 2,072 2,322 2,494 2,624 3,076 746 978 N/A N/A N/A 297 276 344 358 N/A N/A N/A N/A N/A N/A N/A N/A N/A Intermediate goods 6,816 7,079 8,348 9,534 11,064 2,738 2,981 N/A N/A N/A 966 1,010 1,072 900 N/A N/A N/A N/A N/A N/A N/A N/A N/A Consumer goods 2,686 2,838 3,301 3,646 4,172 986 1,183 N/A N/A N/A 376 399 409 375 N/A N/A N/A N/A N/A N/A N/A N/A N/A Sources of data: BS, SORS. Notes: 1exports and imports (F.O.B.) include also the adjustment for exports and imports of goods by ITRS and duty-free shops reports; 2 reserve assets of the BS. Monetary Indicators Slovenian Economic Mirror IMAD No. 11/2007 p. A 7 2005 2006 2006 2007 December 6 1 7 1 8 1 9 1 10 1 11 1 12 1|2|3|4|5|6|7|8|9 MONETARY SYSTEM - CONSOLIDATED BALANCE SHEET OF MONETARY FINANCIAL INSTITUTIONS, end of the month, in SIT bn; since 1 January 2007 in EUR m Banknotes and coins 217.3 152.8 220.7 212.1 210.3 213.1 214.0 197.6 172.8 2,709 2,684 2,689 2,721 2,737 2,769 2,801 2,787 2,786 Overnight deposits at other MFI 1,491.0 1,694.1 1,598.7 1,595.6 1,594.9 1,605.7 1,590.4 1,608.0 1,694.6 6,902 6,866 6,867 6,887 7,056 7,194 7,257 7,134 7,154 Overnight deposits of NFI at the BS 3.1 5.0 3.6 3.6 5.7 4.8 6.0 4.5 5.0 47 37 36 37 40 41 50 57 58 Overnight deposits of other government sector (central government excluded) at the BS 3.3 1.3 1.8 2.2 2.1 2.1 1.9 1.9 1.3 6 7 5 5 6 7 8 10 9 Total overnight deposits at the BS 6.4 6.4 5.3 5.9 7.8 6.9 7.9 6.4 6.4 53 43 41 43 47 48 58 67 67 Deposits with agreed maturity at the BS 0.3 0.0 0.5 0.5 - - - - - - - - - - - - - - Deposits with agreed maturity at other MFI 1,688.0 1,747.3 1,678.2 1,710.8 1,692.2 1,735.0 1,728.8 1,744.1 1,746.4 7,379 7,441 7,607 7,514 7,578 7,694 7,967 8,209 8,178 Deposits at redeemable notice 164.9 197.5 179.8 166.0 171.5 182.7 184.6 188.4 197.5 962 918 985 991 1,087 1,133 1,171 1,224 1,277 Debt securities, units/shares of money market funds and repos 9.5 9.2 6.7 7.0 7.7 7.3 7.5 7.9 8.1 29 32 46 52 52 61 62 66 69 Banknotes and coins and demand deposits 1,713.9 1,853.3 1,824.8 1,813.5 1,812.9 1,825.7 1,812.3 1,812.0 1,873.7 9,664 9,593 9,597 9,650 9,840 10,011 10,116 9,989 10,007 Banknotes and coins and deposits with maturity of up to two years 3,524.6 3,798.1 3,683.3 3,690.7 3,676.6 3,743.4 3,725.6 3,744.5 3,817.6 18,005 17,952 18,189 18,156 18,506 18,838 19,254 19,421 19,462 Banknotes and coins and instruments with maturity of up to two years 3,534.2 3,807.2 3,690.0 3,697.7 3,684.2 3,750.7 3,733.1 3,752.4 3,825.8 18,035 17,984 18,235 18,208 18,557 18,899 19,316 19,487 19,531 SELECTED CLAIMS OF OTHER MFI ON DOMESTIC SECTORS, end of the month, in SIT bn; since 1 January 2007 in EUR m Claims of the BS on central government 17.6 16.6 16.9 16.9 16.8 16.9 16.8 16.8 16.6 69 69 69 68 68 68 68 68 67 Central government (S. 1311) 780.5 776.6 774.9 774.5 777.8 782.2 792.5 787.7 776.6 3,184 3,219 2,944 2,748 2,574 2,465 2,408 2,342 2,345 Other government (S. 1312, 1313, 1314) 17.8 24.9 23.2 23.4 20.6 20.4 21.5 21.8 24.9 108 106 107 105 1 07 107 107 110 111 Households (S. 14, 15) 976.0 1,289.8 1,157.3 1,180.4 1,203.7 1,229.2 1,252.3 1,277.6 1,289.8 5,428 5,488 5,633 5,748 5,892 6,015 6,157 6,323 6,468 Non-financial corporations (S. 11) 2,620.9 3,245.5 2,951.5 2,988.9 3,025.0 3,096.8 3,157.9 3,214.5 3,245.5 14,086 14,250 14,660 15,142 15,426 15,788 16,274 16,720 17,004 Non-monetary financial institutions (S. 123, 124, 125) 230.9 365.6 283.0 287.5 296.5 303.5 325.7 338.3 368.3 1,554 1,563 1,574 1,761 1,747 1,911 2,034 2,083 2,205 Monetary financial institutions (S. 121, 122) 1,408.2 1,157.1 1,414.1 1,293.7 1,236.0 1,251.2 1,265.8 1,244.9 1,158.7 3,505 2,770 2,267 2,033 2,257 2,203 2,209 2,431 2,440 Claims on domestic sectors, TOTAL In domestic currency 2,099.2 2,307.3 2,149.9 2,121.8 2,136.1 2,152.6 2,200.9 2,223.7 2,264.6 21,761 21,634 21,726 22,297 23,089 23,558 24,146 24,892 25,310 In foreign currency 2,199.4 3,109.6 2,716.2 2,748.5 2,814.9 2,894.6 2,992.1 3,048.8 3,109.6 1,048 1,100 1,160 1,248 1,335 1,456 1,560 1,638 1,699 Securities, total 1,791.0 1,442.6 1,741.8 1,682.7 1,612.7 1,638.9 1,627.3 1,617.7 1,449.5 5,055 4,662 4,299 3,992 3,577 3,475 3,483 3,479 3,564 SELECTED OBLIGATIONS OF OTHER MFI ON DOMESTIC SECTORS, end of the month, in SIT bn; since 1 January 2007 in EUR m Deposits in domestic currency, total 2,608.5 2904.1 2749.2 2752.1 2773.4 2846.7 2886.7 2892.4 2902.9 17,823 17,912 17,914 18,066 18,367 18,446 18,880 19,299 19,387 Overnight 987.0 1178.1 1073.0 1056.9 1057.6 1067.4 1061.9 1074.0 1178.1 6,645 6,598 6,648 6,676 6,849 6,953 7,047 6,881 6,909 With agreed maturity - short-term 1,175.5 1252.9 1225.4 1257.0 1270.0 1323.3 1361.3 1353.8 1251.2 7,673 7,837 7,639 7,758 7,777 7,592 7,867 8,331 8,247 With agreed maturity - long-term 309.9 291.9 285.2 282.9 286.1 286.9 297.2 291.3 292.4 2,486 2,492 2,560 2,569 2,573 2,693 2,728 2,790 2,873 Short-term deposits redeemable at notice 136.0 181.2 165.6 155.3 159.8 169.1 166.3 173.3 181.2 1,019 985 1,067 1,063 1,168 1,208 1,238 1,297 1,358 Deposits in foreign currency, total 1,349.9 1454.0 1432.4 1424.9 1420.9 1433.9 1424.7 1449.2 1454.7 634 614 607 597 615 610 605 628 608 Overnight 395.6 552.7 556.9 559.1 565.0 562.8 555.7 576.3 552.7 311 293 285 264 280 274 270 278 269 With agreed maturity - short-term 623.7 544.7 533.6 521.4 506.3 517.6 514.9 519.0 545.5 240 239 237 251 248 249 242 258 248 With agreed maturity - long-term 295.2 318.5 307.8 311.1 316.1 319.2 316.9 318.3 318.5 64 64 62 60 61 60 61 62 60 Short-term deposits redeemable at notice 35.4 38.0 34.1 33.3 33.6 34.3 37.3 35.7 38.0 19 18 23 22 26 27 32 30 31 Source of data: Bank of Slovenia. Slovenian Economic Mirror IMAD Prices No. 11/2007 p. A 8 2006 2007 2006 2007 Indices, 2005 = 100 2002 2003 2004 2005 2006 QIII QIV QI QII QIII 10 11 12 1 2 3 4 5 6 7 8 9 10 GROWTH IN SELECTED PRICE INDICATORS CPI 89.2 94.2 97.6 100.0 102.5 103.2 103.2 103.1 105.8 106.9 102.8 103.1 103.6 102.9 102.7 103.8 104.9 106.1 106.5 106.6 106.9 107.3 108.0 Food, non-alcoholic beverages 95.9 100.3 100.8 100.0 102.3 102.3 103.1 105.3 108.7 110.7 101.9 103.4 104.0 105.7 104.7 105.5 107.5 109.3 109.2 109.5 109.7 113.0 115.5 Alcoholic beverages, tobacco 80.8 91.0 96.3 100.0 103.7 105.2 106.2 107.1 108.0 113.6 106.3 106.1 106.2 106.9 107.0 107.4 107.6 108.1 108.2 113.9 114.0 113.1 113.2 Clothing and footwear 93.5 99.3 101.0 100.0 99.5 94.0 105.5 95.4 105.7 97.1 104.9 106.2 105.5 92.9 93.3 100.1 103.4 106.8 107.0 95.0 94.2 102.3 106.8 Housing, water, electricity, gas 80.2 85.4 91.7 100.0 105.3 107.0 103.8 104.2 107.1 109.3 103.3 103.8 104.2 103.6 103.9 105.1 106.7 107.0 107.7 108.5 110.3 109.1 110.2 Furnishings, household equip. 90.1 94.3 96.5 100.0 104.1 105.2 106.2 107.0 108.3 109.0 106.1 106.1 106.4 106.9 106.7 107.5 108.0 108.2 108.8 108.8 109.1 109.1 109.9 Medical, pharmaceutical products 93.4 98.8 100.3 100.0 98.3 98.0 98.3 99.9 99.9 99.1 98.0 98.2 98.7 99.2 99.7 100.8 100.0 99.7 99.9 100.0 98.7 98.7 98.8 Transport 88.0 92.1 97.4 100.0 101.3 103.0 100.3 99.7 102.6 102.1 100.3 100.1 100.6 99.8 99.3 100.1 101.6 102.9 103.2 102.9 102.2 101.1 100.7 Communications 98.5 99.8 100.0 100.0 100.3 100.4 101.5 100.0 99.6 100.9 102.2 101.1 101.1 101.5 99.3 99.2 99.3 99.7 99.7 100.6 100.8 101.5 101.4 Recreation and culture 89.8 94.2 97.7 100.0 102.1 105.8 101.1 102.5 104.3 110.6 100.6 100.9 101.8 102.3 102.9 102.3 102.0 104.4 106.4 111.0 113.0 107.9 105.5 Education 83.5 87.1 93.4 100.0 103.1 103.5 102.9 103.1 104.7 105.7 102.9 102.9 102.9 103.0 103.1 103.0 103.0 105.6 105.6 105.6 105.6 106.0 106.7 Catering services 84.9 91.1 95.8 100.0 104.5 105.4 106.3 109.2 110.8 112.8 106.0 105.5 107.4 108.9 109.3 109.6 110.3 111.0 111.1 111.8 112.7 113.9 114.4 Miscellaneous goods & services 88.8 94.5 98.1 100.0 104.1 104.4 105.9 106.4 107.1 108.2 105.7 105.8 106.1 106.2 106.5 106.7 106.7 107.2 107.3 107.8 108.3 108.5 108.8 HCPI 89.1 94.2 97.6 100.0 102.5 103.2 103.3 103.4 106.2 107.0 102.9 103.2 103.7 103.1 103.0 104.1 105.3 106.5 106.8 106.7 106.9 107.4 108.2 Producer price indices (domestic market) 91.0 93.3 97.4 100.0 102.4 102.6 103.2 105.9 107.4 108.2 103.1 103.1 103.6 104.3 106.5 106.9 107.1 107.4 107.7 107.8 107.7 108.9 109.6 Intermediate goods 89.6 91.4 96.9 100.0 103.5 104.2 104.7 109.1 111.7 112.6 104.4 104.5 105.3 106.1 110.4 110.7 111.3 111.8 112.1 112.3 112.1 113.5 114.2 Capital goods 94.8 94.7 97.0 100.0 100.2 100.5 100.8 101.2 101.1 101.5 100.9 100.7 100.9 101.4 101.0 101.3 101.4 101.0 100.9 101.6 101.4 101.6 102.1 Consumption goods 91.8 95.3 98.1 100.0 101.5 101.2 102.1 103.1 103.6 104.2 102.1 101.9 102.3 102.8 103.0 103.4 103.2 103.5 104.0 103.8 103.8 105.1 105.8 PRICE CONTROL1 Energy prices 81.1 83.3 89.4 100.0 108.0 111.9 105.9 102.6 109.5 110.1 106.2 105.5 105.9 103.6 100.4 103.7 107.5 110.3 110.7 111.8 109.8 108.5 108.5 Oil products 78.9 80.2 86.7 100.0 110.3 116.3 105.7 101.4 110.9 111.3 106.5 105.1 105.6 102.9 98.4 103.0 107.5 112.3 112.9 113.5 111.0 109.3 108.8 Electricity for households 90.4 93.8 98.6 100.0 101.6 102.0 102.7 101.7 107.1 - 102.7 102.7 102.7 101.9 101.0 102.4 107.1 107.1 107.1 - - - - Basic utilities 83.4 88.6 96.2 100.0 97.4 100.9 87.8 93.8 94.7 97.2 83.3 89.3 90.7 92.5 94.4 94.4 94.7 94.7 94.7 94.7 101.7 95.2 95.2 Transport & communications 91.5 95.2 97.9 100.0 101.5 101.6 101.6 101.9 102.2 102.2 101.6 101.6 101.6 101.7 101.8 102.2 102.2 102.2 102.2 102.2 102.2 102.2 102.2 Other controlled prices 86.0 89.8 95.7 100.0 102.6 103.2 103.3 104.9 104.9 106.3 103.2 103.3 103.3 104.2 105.1 105.3 105.3 104.7 104.7 105.5 107.1 106.4 106.4 Direct control - total 82.5 85.5 91.5 100.0 107.0 110.2 106.9 105.6 110.8 112.0 106.5 106.9 107.3 106.0 104.1 106.6 109.4 111.3 111.7 112.6 112.7 110.7 110.7 Source of data: SORS, calculations and estimates IMAD. Note: 1 the structure of groups varies, data published are not directly comparable to those published previously. The electricity market was liberalized on 1 July 2007. Data from July 2007 onwards are not comparable. Interest Rates and Investment Slovenian Economic Mirror IMAD No. 11/2007 p. A 9 End year 2006 2007 2002 I 2003 I 2004 | 2005 | 2006 9 1 10 1 11 1 12 1 |2|3|4|5|6|7|8|9| 10 INTEREST RATES OF MONETARY FINANCIAL INSTITUTIONS, % New deposits in domestic currency Households Overnight deposits - - - 0.47 0.32 0.28 0.27 0.28 0.27 0.33 0.33 0.33 0.34 0.34 0.34 0.35 0.35 0.37 - Time deposits with maturity of up to one year - - - 3.34 2.96 2.82 2.80 2.81 2.84 2.83 2.91 3.01 3.07 3.15 3.26 3.36 3.41 3.61 - New loans to households in domestic currency Housing loans 1-5 year fixed interest rate - - 4.18 4.99 4.56 4.60 4.42 5.19 4.29 5.16 5.44 5.50 5.35 5.37 5.36 5.79 5.98 6.16 - New loans to non-financial corporations in domestic currency Loan over EUR 1 million 1-5 year fixed interest rate - 8.58 5.36 5.23 4.64 3.61 4.66 5.04 5.11 5.49 6.53 - - 4.86 5.12 6.49 - 5.76 - INTEREST RATES OF THE EUROPEAN CENTRAL BANK, % Main refinancing operations | 3.21 2.25 2.00 2.02 2.78 3.00 3.25 3.25 3.50 3.50 3.50 3.75 3.75 3.75 4.00 4.00 4.00 4.00 - INVESTMENT, outlays, in SIT m, since 2007 thousand EURO Total 524,626 610,923 760,662 772,675 824,957 62,610 58,911 86,544 147,057 283,943 287,486 252,076 387,674 377,167 375,300 483,585 460,832 362,648 377,049 Industry total 114,794 136,349 184,271 181,466 164,226 11,634 12,008 16,069 22,452 54,811 66,902 68,461 62,123 71,435 60,840 81,370 81,419 93,484 77,801 Energy sector 36,959 31,538 39,105 38,701 36,856 3,460 2,294 4,832 7,335 11,771 26,320 12,892 9,072 9,797 14,671 13,194 13,996 29,763 27,846 Manufacturing 77,835 104,811 145,163 142,765 127,370 8,174 9,714 11,237 15,117 43,040 40,582 55,568 53,051 61,639 46,169 68,176 67,423 63,721 49,956 Construction* 8,937 11,350 21,470 129,609 170,369 14,507 13,065 14,565 43,112 97,608 68,472 120,858 13,463 44,591 34,762 11,816 4,168 16,039 11,698 Transport and communications* 58,244 39,779 54,720 63,689 57,978 7,245 3,401 9,931 4,165 11,029 32,975 194,924 142,273 120,681 86,677 211,395 185,566 60,813 58,285 Trade 66,950 67,852 80,272 93,793 82,460 4,527 6,229 4,926 6,846 16,599 12,242 25,851 34,770 29,893 32,765 36,881 34,166 45,906 44,707 Hotels and restaurants 9,144 1 4,665 14,206 15,641 12,356 816 439 722 1,483 7,841 5,197 7,092 5,981 2,300 13,813 10,544 3,008 6,131 5,558 Financial and technical services 40,339 48,049 52,291 48,192 47,530 2,560 3,805 4,297 4,655 11,926 22,401 9,369 14,409 20,320 14,473 27,755 20,885 10,422 19,991 Other 226,220 292,876 353,432 240,285 290,038 21,321 19,964 36,034 64,344 84,129 79,297 67,236 114,655 87,946 131,970 103,824 131,620 129,853 159,009 In economic infrastructure, total1 162,078 177,777 223,096 180,751 197,802 16,725 13,348 19,366 49,344 89,490 105,197 64,170 57,115 68,286 76,713 202,593 107,145 76,037 58,919 Energy sector 36,959 46,562 46,469 42,212 36,857 3,460 2,294 4,832 7,335 11,771 26,320 12,892 9,072 9,797 14,671 13,194 13,996 29,763 27,846 Electricity supply 25,132 26,903 23,107 24,251 22,736 2,516 1,304 3,331 3,946 6,664 21,210 7,479 5,503 7,270 11,458 9,714 10,160 28,005 23,086 Gas supply 1,380 1,282 689 678 729 58 26 111 117 229 242 335 107 100 268 106 485 269 312 Hot water supply 1,168 2,725 2,027 2,564 2,640 216 240 346 714 1,540 898 640 350 290 267 890 634 1,015 787 Cold water supply 9,280 15,652 20,645 14,720 10,752 670 724 1,044 2,558 3,337 3,970 4,439 3,112 2,137 2,679 2,484 2,717 474 3,661 Transport infrastructure 125,119 131,215 176,627 138,539 160,945 13,265 11,054 14,534 42,009 77,719 78,876 51,278 48,043 58,489 62,041 189,399 93,149 46,274 31,073 Railways 16,924 1 ,71 7 1,822 2,615 6,677 1,653 77 493 70 590 1,360 897 727 1,406 1,629 515 1,204 1,144 1,143 Air traffic 618 1,774 2,660 3,462 2,120 96 123 139 502 1,508 2,028 1,515 2,064 2,802 4,143 3,147 2,251 1,646 2,003 Roads, motorways 81,467 103,849 141,157 106,040 136,142 11,064 10,310 13,150 40,435 72,863 62,228 46,038 41,167 40,883 49,348 182,016 84,437 39,653 24,436 Postal and telecom services 24,573 20,923 26,717 24,143 13,609 372 432 399 613 1,717 1,402 1,780 2,196 6,750 5,459 2,298 1,240 1,996 1,724 Other 1,538 2,952 4,271 2,279 2,397 80 112 354 389 1,041 11,858 1,048 1,889 6,647 1,462 1,424 4,017 1,834 1,767 Sources of data: SORS, BS, AP. Notes: *a large infrastructure company has been included in the construction activity since April 2007 (change of main activity from F to I). 1Outlays collected on the basis of data for individual investors. Slovenian Economic Mirror IMAD Labour Market No. 11/2007 p. A 10 Number in thousand 2002 2003 2004 2005 2006 2006 2007 2006 2007 Q III Q IV Q I Q II Q III 9 10 11 12 1 2 3 4 5 6 7 8 9 A FORMAL LABOUR FORCE (A=B+E) 911.4 899.1 900.3 905.0 910.7 909.6 914.0 919.1 923.5 924.6 909.8 915.0 915.5 911.3 918.0 919.2 920.0 921.6 923.6 925.4 924.5 923.1 926.0 B PERSONS IN FORMAL EMPLOYMENT (C+D) 808.7 801.4 807.5 813.1 824.8 826.6 834.5 841.8 852.7 856.1 829.5 833.7 836.7 833.0 838.0 841.5 845.8 849.0 852.9 856.2 854.4 854.6 859.4 In agriculture, forestry, fishing 45.4 37.7 41.2 38.7 38.9 38.7 38.5 43.1 42.0 41.0 38.7 38.6 38.6 38.4 43.0 43.1 43.1 41.9 42.0 42.0 41.0 41.0 41.0 In industry, construction 323.3 318.4 313.9 310.9 313.3 315.1 317.6 317.4 322.2 324.8 316.2 317.9 318.9 315.9 316.2 317.8 318.3 320.5 322.3 323.9 324.3 324.4 325.7 Of which: in manufacturing 243.1 238.9 236.1 233.7 227.9 227.5 229.2 229.4 230.2 229.6 227.8 229.1 229.9 228.7 228.9 229.6 229.7 230.0 230.2 230.3 229.8 229.3 229.7 in construction 63.4 63.3 62.2 61.7 69.9 72.2 72.9 72.8 76.8 80.0 72.8 73.3 73.5 71.9 72.1 73.0 73.3 75.3 76.8 78.3 79.1 79.9 80.9 In services 440.0 445.2 452.3 463.5 472.6 472.8 478.4 481.3 488.5 490.3 474.7 477.2 479.2 478.7 478.8 480.7 484.4 486.6 488.6 490.3 489.1 489.2 492.7 Of which: in public administration 45.9 47.7 49.9 49.1 50.2 50.3 50.1 49.7 50.1 50.2 50.2 50.3 50.2 49.9 49.8 49.7 49.7 49.9 50.1 50.2 50.2 50.2 50.2 in education, health-services, social work 101.6 102.7 105.0 106.5 109.1 108.6 110.0 109.9 110.2 109.3 109.5 109.9 110.2 109.8 109.5 109.9 110.2 110.4 110.1 110.2 109.0 108.7 110.1 C FORMALLY EMPLOYED 1 721.4 722.1 724.4 731.6 741.6 743.4 750.7 753.1 764.7 768.6 746.1 750.1 752.9 749.2 749.5 752.9 757.0 761.3 764.9 768.1 767.0 767.1 771.6 In enterprises and organisations 654.6 656.0 658.7 666.2 675.1 675.9 682.6 685.8 695.0 697.5 678.2 681.6 684.3 681.7 682.8 685.6 689.0 692.4 695.1 697.5 696.2 696.1 700.1 By those self-employed 66.8 66.2 65.6 65.4 66.5 67.5 68.2 67.3 69.8 71.1 67.9 68.5 68.6 67.5 66.7 67.3 68.0 68.9 69.8 70.6 70.8 71.0 71.5 D SELF-EMPLOYED AND FARMERS 87.3 79.2 83.1 81.5 83.3 83.2 83.7 88.7 87.9 87.6 83.5 83.6 83.8 83.8 88.5 88.6 88.8 87.8 88.0 88.1 87.3 87.5 87.8 E REGISTERED UNEMPLOYMENT 102.6 97.7 92.8 91.9 85.8 83.0 79.5 77.3 70.9 68.4 80.2 81.3 78.8 78.3 80.0 77.7 74.2 72.6 70.7 69.3 70.1 68.5 66.7 Female 52.5 51.6 49.3 49.4 47.0 46.3 43.6 42.0 39.3 38.0 44.6 44.9 43.3 42.6 43.2 42.1 40.7 40.2 39.2 38.5 39.3 38.1 36.7 By age: under 26 24.7 25.5 24.3 22.2 18.2 16.4 16.0 14.0 11.6 10.3 14.8 16.8 15.8 15.2 15.1 14.2 12.8 12.2 11.5 11.1 11.1 10.4 9.5 older than 40 50.7 43.1 39.7 40.1 39.7 39.3 37.9 38.7 37.2 36.6 38.9 38.2 37.6 37.7 39.0 38.8 38.1 37.7 37.2 36.7 36.9 36.6 36.3 Unskilled 48.2 43.2 38.6 37.5 33.7 32.2 30.8 30.4 27.7 27.0 31.6 31.1 30.6 30.8 31.6 30.7 29.0 28.2 27.7 27.1 27.2 27.0 26.7 For more than 1 year 55.8 47.5 42.9 43.4 41.9 41.5 40.2 38.8 36.7 35.5 41.2 41.0 39.9 39.7 39.6 39.0 37.9 37.4 36.8 36.0 35.8 35.6 35.0 Those receiving benefits 24.4 24.3 22.3 23.3 22.7 22.4 19.4 19.1 16.8 15.8 21.7 19.9 19.4 18.9 19.9 19.1 18.3 17.2 16.9 16.3 16.3 16.0 15.2 F RATE OF REGISTERED UNEMPLOYMENT, E/A, in % 11.3 10.9 10.3 10.2 9.4 9.1 8.7 8.4 7.7 7.4 8.8 8.9 8.6 8.6 8.7 8.4 8.1 7.9 7.7 7.5 7.6 7.4 7.2 G FLOWS OF FORMAL LABOUR FORCE -2.3 -10.2 1.5 8.0 5.2 -2.5 1.6 8.7 5.4 0.6 1.5 5.3 0.5 -4.2 6.7 1.2 0.8 1.6 2.0 1.8 -0.9 -1.4 2.9 New unemployed first job seekers 21.4 25.4 26.0 21.7 18.6 3.5 8.2 2.9 2.4 2.3 1.5 5.8 1.4 1.0 1.3 0.8 0.9 1.0 0.7 0.6 0.7 0.6 1.0 Redundancies 66.0 68.8 69.6 67.2 63.8 15.2 14.8 15.4 11.6 12.6 5.1 4.8 5.0 5.0 7.6 3.8 4.0 4.0 4.0 3.7 4.9 3.5 4.2 Registered unemployed who found employment 52.2 50.5 54.3 53.9 57.4 13.5 13.6 14.8 12.1 11.3 5.3 5.1 5.0 3.5 5.1 4.4 5.2 4.2 4.1 3.7 3.0 3.8 4.4 Other unemployed erased out of register 39.9 47.3 46.6 33.1 39.2 9.8 11.3 7.6 6.9 6.2 4.1 4.4 3.9 3.1 2.0 2.5 3.1 2.4 2.5 2.0 1.6 1.9 2.7 Change in number of work permits for foreigners 2.1 3.5 -0.5 3.9 7.8 1.6 0.3 3.9 4.9 4.3 0.3 0.4 0.1 -0.2 0.3 1.2 2.5 3.6 1.7 -0.5 2.2 1.6 0.5 Retirements 2 15.9 16.1 16.4 16.7 18.7 4.5 6.1 4.7 4.3 4.5 2.4 2.2 2.0 1.9 1.8 1.6 1.2 1.5 1.4 1.3 1.4 0.9 2.2 Deaths 2 2.6 2.6 2.5 2.3 2.5 0.6 0.6 0.6 0.6 0.6 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 Others who found employment 2 30.4 24.9 39.5 32.6 37.3 6.3 9.8 13.8 8.7 4.0 6.0 5.4 4.5 -0.2 8.9 3.3 1.6 0.6 3.2 4.9 -0.9 -1.0 6.0 H JOB VACANCIES 3 11.6 12.1 14.1 16.9 19.0 18.9 17.4 20.5 21.0 20.4 22.7 19.5 16.9 15.9 20.0 17.8 23.6 20.6 19.3 23.1 18.8 19.7 22.8 For fixed term, in % 74.4 73.8 73.7 75.6 75.3 77.6 77.5 76.7 77.5 77.2 78.7 77.9 78.0 76.4 77.1 75.1 77.5 76.9 79.1 76.6 78.4 77.1 76.5 WORK PERMITS FOR FOREIGNERS 35.3 39.7 39.7 41.6 48.3 50.0 50.9 53.4 59.3 63.0 50.5 50.9 51.0 50.7 52.2 53.4 54.7 58.3 60.1 59.5 61.7 63.3 63.9 As % of labour force (I/A) 3.9 4.4 4.4 4.6 5.3 5.5 5.6 5.8 6.4 6.8 5.5 5.6 5.6 5.6 5.7 5.8 5.9 6.3 6.5 6.4 6.7 6.9 6.9 Sources of data: SORS, PDII, ESS. Notes: 1In January 2005, the SORS adopted new methodology of obtaining data on persons in paid employment. The new source of data for employed and self-employed persons excluding farmers is the Statistical Register of Employment (SRE), while data on farmers are forecast using the ARIMA model based on quarterly figures for farmers from the Labour Force Survey. Data for previous years dating back to January 2000 have also been calculated according to the new methodology. 2Estimated by IMAD, based on data by PDII and ESS; 3according to ESS. Wages, Competitiveness, Exchange Rate Slovenian Economic Mirror IMAD No. 11/2007 p. A 11 i 2004 i 2005 i 2006 2006 2007 2006 2007 Qiii 1 Qiv Qi 1 Qii 1 Qiii 10 1 11 1 12 1|2|3|4|5|6|7|8|9 GROSS WAGE PER EMPLOYEE, in SIT, since 2007 in EUR Total 264,463 277,279 290,635 286,917 309,709 1,238 1,252 1,267 293,121 333,799 302,207 1,250 1,213 1,252 1,237 1,264 1,254 1,263 1,279 1,259 Private sector (A to K) 245,498 258,714 272,709 267,438 294,601 1,168 1,178 1,191 274,204 324,626 284,972 1,182 1,137 1,184 1,164 1,192 1,179 1,180 1,211 1,181 Agriculture, fishing (A, B) 215,981 224,253 236,822 234,180 255,337 1,010 1,036 1,049 246,013 275,462 244,538 1,030 978 1,021 1,026 1,057 1,026 1,029 1,073 1,044 A Agriculture 216,252 224,225 236,681 234,330 255,564 1,010 1,036 1,049 246,477 275,255 244,960 1,030 978 1,023 1,025 1,058 1,027 1,029 1,072 1,045 B Fishing 205,207 218,670 236,027 228,286 245,222 970 1,032 1,030 225,990 283,455 226,221 1,007 984 919 1,070 1,011 1,015 1,015 1,078 999 Industry, construction (C to F) 229,615 243,067 256,362 252,418 275,098 1,096 1,101 1,120 259,650 302,333 263,312 1,120 1,059 1,110 1,081 1,114 1,109 1,106 1,145 1,109 C Mining and quarrying 324,410 344,670 360,110 347,764 390,549 1,504 1,547 1,538 356,344 465,162 350,142 1,516 1,488 1,508 1,487 1,580 1,572 1,518 1,549 1,547 D Manufacturing 225,806 238,985 252,162 248,069 269,029 1,086 1,086 1,105 255,616 293,054 258,417 1,113 1,046 1,099 1,069 1,094 1,095 1,091 1,132 1,093 E Electricity, gas & water supply 322,478 353,836 373,743 355,321 439,645 1,494 1,537 1,564 364,284 550,174 404,477 1,539 1,442 1,501 1,483 1,551 1,576 1,502 1,602 1,588 F Construction 214,536 224,794 238,698 239,102 253,871 1,017 1,036 1,054 245,043 271,568 245,003 1,018 996 1,038 1,011 1,066 1,031 1,050 1,071 1,039 Production services (G to I) 242,355 253,747 266,326 261,841 286,264 1,150 1,156 1,167 269,263 309,080 280,448 1,151 1,128 1,171 1,153 1,163 1,152 1,162 1,177 1,163 G Distributive trade 233,682 244,880 258,521 254,723 278,198 1,122 1,130 1,143 263,133 294,774 276,686 1,127 1,097 1,143 1,130 1,135 1,125 1,136 1,151 1,142 H Hotels & restaurants 196,458 202,895 211,873 210,678 221,166 893 922 927 213,344 225,866 224,287 898 873 906 905 930 931 920 945 916 I Transport, storage & communications 284,881 299,377 310,080 302,254 334,933 1,333 1,320 1,331 309,630 379,872 315,296 1,324 1,317 1,359 1,316 1,332 1,313 1,329 1,343 1,322 Business services (J to K) 312,967 325,355 340,552 328,901 375,481 1,437 1,472 1,466 332,557 428,155 365,729 1,448 1,412 1,450 1,452 1,504 1,461 1,458 1,486 1,453 J Financial intermediation 388,044 413,896 443,595 415,908 523,782 1,812 1,943 1,834 415,140 668,928 487,279 1,797 1,810 1,830 1,897 2,021 1,911 1,833 1,853 1,815 K Real estate 283,421 292,763 304,295 298,125 324,256 1,307 1,312 1,341 303,947 345,433 323,388 1,326 1,274 1,321 1,300 1,328 1,309 1,330 1,361 1,331 Public services (L to O) 319,911 330,580 341,999 343,246 353,578 1,445 1,469 1,495 347,973 360,551 352,211 1,449 1,433 1,452 1,454 1,474 1,478 1,510 1,486 1,490 L Public administration 322,928 333,302 343,572 346,124 351,537 1,446 1,482 1,538 351,350 353,047 350,213 1,450 1,442 1,445 1,452 1,488 1,506 1,565 1,512 1,538 M Education 325,463 340,967 357,301 362,784 368,215 1,521 1,545 1,561 365,467 370,135 369,042 1,516 1,518 1,530 1,533 1,550 1,550 1,571 1,556 1,556 N Health & social work 310,990 316,827 325,245 323,843 336,103 1,367 1,393 1,405 329,682 341,294 337,332 1,387 1,344 1,369 1,386 1,401 1,392 1,423 1,401 1,391 O Other social & personal services 316,566 325,159 332,137 324,566 356,170 1,402 1,394 1,407 330,619 395,357 342,534 1,395 1,368 1,441 1,389 1,393 1,399 1,399 1,415 1,407 INDICATORS OF OVERALL COMPETITIVENESS, 2001=100 Foreign exchange rates Effective exchange rate1, nominal 94.6 94.0 94.1 94.4 94.3 94.4 94.8 94.9 94.2 94.2 94.4 94.3 94.5 94.5 94.7 94.8 94.9 95.0 94.8 95.0 Real (relative consumer prices) 105.2 104.9 105.6 106.2 106.0 105.6 107.8 108.6 105.7 106.0 106.3 105.6 105.3 106 106.9 108 108.3 108.4 108.5 108.9 Real (relative producer prices)2 103.1 102.5 101.6 101.2 102.5 103.4 103.2 103.4 102.3 102.3 102.9 103.4 103.5 103.4 103.1 103.2 103.4 103.2 103.1 103.9 SIT/US$ 192.4 192.7 191.0 188.0 185.9 - - - 190.0 186.2 181.4 - - - - - - - - - SIT/EUR 238.9 239.6 239.6 239.6 239.6 - - - 239.6 239.6 239.6 - - - - - - - - - US$/EUR 1 .2433 1.2448 1.2557 1.2741 1 .2902 1.3105 1.3482 1.3745 1.2611 1.2881 1.3213 1.2999 1.3074 1.3242 1.3516 1.3511 1.341 9 1.3716 1.3622 1.3896 Sources of data: SORS, AP, BS, OECD Main Economic Indicators, calculations IMAD. Notes: Data on the monthly gross wage per employee for 2004 and beyond calculated according to the new methodology were published in September 2005. 1Change of methodology: the calculation of domestic currency's effective exchange rate includes the currencies/prices of Slovenia's 17 trading partners (Austria, Belgium, Germany, Italy, France, Netherlands, Spain, Denmark, United Kingdom, Sweden, Czech Republic, Hungary, Poland, Slovakia, USA, Switzerland, Japan); weights are the shares of individual trading partners in Slovenian exports and imports of goods within manufacturing (5-8 SITC) in 2001-2003; exports are double weighted; a rise in the index value indicates an appreciation of domestic currency and vice versa. 2Producer prices in manufacturing activities. Slovenian Economic Mirror IMAD Public Finance No. 11/2007 p. A 12 Current prices in SIT million, . 2006 2007 2006 2007 since 2007 in EURO thousand 2003 2004 2005 2006 QIII QIV QI Q„ 11 12 1 2 3 4 5 6 7 CONSOLIDATED GENERAL GOVERNMENT REVENUES (GFS-IMF methodology) TOTAL REVENUES 2,477,425 2,683,055 2,869,949 3,105,421 729,600 874,009 3,065,753 3,456,344 287,812 309,710 1,062,258 959,563 1,043,932 1,292,864 1,172,663 990,818 1,183,162 Current revenues 2,440,298 2,609,053 2,759,987 2,970,410 706,346 816,169 2,955,037 3,374,889 265,390 291,337 1,034,423 926,165 994,448 1,272,601 1,157,964 944,323 1,159,906 Tax revenues 2,291,071 2,446,899 2,608,230 2,818,643 665,880 768,117 2,828,698 3,199,681 252,118 272,749 994,506 883,169 951,023 1,218,988 1,094,220 886,473 1,089,818 Taxes on income and profit 460,520 506,878 537,260 655,486 134,797 154,693 587,733 914,251 49,212 63,610 188,151 189,870 209,713 462,894 288,258 163,099 168,660 Social security contributions 839,216 899,400 955,611 1,013,970 250,117 272,872 1,083,374 1,123,694 86,391 102,001 358,356 360,464 364,554 371,109 371,851 380,733 379,179 Taxes on payroll and workforce 107,424 117,676 126,097 113,334 27,376 32,279 96,050 99,669 9,804 13,249 32,835 32,096 31,119 32,767 32,408 34,495 34,122 Taxes on property 34,419 39,513 40,834 45,322 15,126 13,585 22,183 57,958 7,140 3,043 6,207 7,914 8,063 10,750 27,215 19,993 20,758 Domestic taxes on goods and services 814,577 856,610 938,118 977,082 235,012 290,547 1,017,613 973,023 97,968 89,279 403,169 286,860 327,584 332,537 363,303 277,183 475,447 Taxes on international trade & transactions 34,653 19,339 9,360 12,145 2,653 3,866 21,478 30,663 1,528 1,444 5,460 6,313 9,706 8,879 11,034 10,749 11,547 Other taxes 261 7,484 950 1,304 799 275 266 422 76 125 329 -347 284 51 151 221 105 Non-tax revenues 149,227 162,154 151,756 151,767 40,465 48,051 126,339 175,208 13,272 18,588 39,918 42,996 43,425 53,613 63,743 57,851 70,088 Capital revenues 15,857 20,751 27,181 39,971 10,175 15,465 19,670 14,923 6,163 4,651 7,455 6,113 6,103 5,885 4,099 4,939 13,518 Grants 13,384 1,877 2,173 1,287 356 409 2,103 2,831 1 77 171 713 402 988 726 683 1,422 584 Transferred revenues 7,887 7,536 8,140 10,259 117 9,985 1,835 4,151 9,483 476 1,727 31 77 265 1,251 2,635 1,098 Receipts from the EU budget - 43,838 72,469 83,494 12,607 31,981 87,109 59,551 6,599 13,076 17,940 26,852 42,317 13,387 8,666 37,499 8,056 CONSOLIDATED GENERAL GOVERNMENT EXPENDITURE (GFS-IMF methodology) TOTAL EXPENDITURE 2,555,894 2,768,427 2,941,756 3,165,327 721,094 925,862 3,202,748 3,394,538 285,225 375,015 985,192 1,108,814 1,108,741 1,061,851 1,242,632 1,090,055 1,094,954 Current expenditure 1,225,523 1,234,113 1,283,018 1,363,301 308,809 367,663 1,481,934 1,448,317 117,158 135,482 489,168 473,213 519,554 506,381 506,401 435,536 450,934 Wages, salaries and other personnel expenditure 662,776 700,349 722,822 762,128 188,138 196,382 785,849 851,711 64,797 67,969 262,124 262,111 261,613 261,814 321,894 268,003 266,715 Expenditure on goods and services 451,440 429,861 457,942 496,830 111,986 150,253 490,266 482,385 46,338 62,028 192,055 145,993 152,217 155,082 169,373 157,930 174,747 Interest payments 92,661 91,933 89,180 90,199 5,439 15,910 197,547 105,283 5,011 2,574 32,429 62,374 102,745 87,080 12,021 6,182 6,768 Reserves 18,646 11,969 13,074 14,145 3,246 5,117 8,272 8,939 1,012 2,909 2,559 2,735 2,978 2,406 3,112 3,421 2,705 Current transfers 1,097,369 1,249,909 1,341,641 1,420,064 332,290 372,882 1,457,082 1,664,458 122,357 139,573 434,832 507,916 514,335 468,021 639,050 557,387 525,266 Subsidies 69,470 77,571 91,362 96,556 13,742 31,540 104,411 137,926 6,475 19,918 6,748 54,844 42,819 10,003 39,748 88,175 57,278 Current transfers to individuals and households 986,100 1,053,417 1,109,197 1,167,404 280,259 294,149 1,219,043 1,359,171 102,296 98,919 388,090 415,487 415,466 409,207 537,720 412,245 406,397 Current transfers to non-profit institut., other current domestic transfers 36,722 113,675 134,930 149,548 35,971 45,707 130,723 157,182 12,909 20,214 39,679 35,484 55,560 48,253 54,243 54,686 57,583 Current transfers abroad 5,077 5,247 6,154 6,556 2,319 1,485 2,905 10,178 676 521 315 2,101 489 558 7,340 2,281 4,008 Capital expenditure 142,131 151,305 156,784 216,016 42,704 117,094 133,353 162,495 26,348 70,967 44,660 46,280 42,413 46,704 55,577 60,214 71,714 Capital transfers 90,871 92,464 91,874 96,956 19,384 52,703 30,424 58,715 15,861 23,184 8,203 9,460 12,761 16,636 19,962 22,117 23,303 Payments to the EU budget - 40,637 68,438 68,990 17,907 15,520 99,954 60,553 3,501 5,810 8,330 71,946 19,679 24,109 21,642 14,802 23,737 SURPLUS / DEFICIT -78,469 -85,372 -71,807 -59,906 - - - - - - - - - - - - - Source of data: MF Bulletin. Note: in line with the changed methodology of the International Monetary Fund of 2001, social security contributions paid by the state are not consolidated. Main Indicators Slovenian Economic Mirror IMAD No. 11/2007 p. A 13 Real growth rates, in % 2001 2002 2007 2008 2003 2004 2009 200b Autumn Forecast 2007 GDP 3.1 3.7 2.8 4.4 4.1 5.7 5.8 4.6 GDP per capita, in EUR 11,298 12,084 12,695 13,400 14,116 15,167 16,532 17,888 GDP per capita, PPS1 15,300 16,300 16,700 18,000 18,900 20,400 - - Standardised rate of unemployment (ILO) 6.4 6.4 6.7 6.3 6.5 6.0 5.0 4.9 Labour productivity (GDP per employee) 2.6 3.7 3.2 4.1 4.0 4.5 3.4 3.7 Inflation2, annual average 8.4 7.5 5.6 3.6 2.5 2.5 3.4 3.5 INTERNATIONAL TRADE - BALANCE OF PAYMENTS STATISTICS Exports of goods and services3 6.4 6.8 3.1 12.5 10.1 12.3 13.4 10.3 Exports of goods 7.0 6.4 4.4 12.8 10.3 13.4 13.1 10.6 Exports of services 3.5 8.2 -2.5 11.0 9.5 7.3 15.0 9.1 Imports of goods and services3 3.1 4.9 6.7 13.3 6.7 12.2 14.2 10.1 Imports of goods 3.2 4.4 7.3 14.6 6.8 12.7 14.3 10.1 Imports of services 2.2 8.4 2.9 5.6 5.6 8.9 13.1 10.0 Current account balance, in EUR million 38 247 -196 -720 -561 -857 -1,165 -1,118 Average exchange rate, SIT/EUR 217.2 226.2 233.7 238.9 239.6 239.6 - - Foreign exchange reserves, in EUR million 6,514 7,842 7,703 7,484 8,833 8,005 7054 - Gross external debt, in EUR million 10,386 11,524 13,225 15,343 19,614 23,895 30,8675 - DOMESTIC DEMAND - NATIONAL ACCOUNTS STATISTICS (share in GDP in %) Private consumption 56.2 55.2 55.3 54.3 54.0 53.4 52.8 52.5 Government consumption 19.7 19.5 19.4 19.2 19.4 19.2 18.8 18.9 Gross fixed capital formation 24.9 23.4 24.1 25.4 25.5 26.1 28.2 28.2 Sources of data: SORS, BS, MF, calculations, estimates and forecasts by the IMAD - Autumn Forecast 2007. Notes: 1Eurostat; 2the consumer price index; 3balance of payments statistics (exports F.O.B., imports F.O.B.), changes in exchange rates and prices in foreign markets are eliminated by calculating real rates; 4end October. From 1 January 2007 foreign exchange reserves of the Bank of Slovenia include foreign cash in convertible currencies, deposits abroad, and first class securities of issuers from outside the EMU in foreign currency. The drop in data values is the result of Slovenia's entry to the EMU; 5end August. International Comparisons / I Slovenian Economic Mirror IMAD No. 11/2007 p. A 14 Real GDP growth GDP per capita in PPS1 EU27=100 Inflation2 (annual average) 2003 2004 2005 2006 2003 2004 2005 2006 2003 2004 2005 2006 Slovenia 2.8 4.4 4.1 5.7 81.0 83.4 84.7 86.7 5.7 3.7 2.5 2.5 EU27 1.3 2.5 1.8 3.0 100.0 100.0 100.0 100.0 2.1 2.3 2.3 2.3 EU25 1.3 2.4 1.8 3.0 104.4 104.2 104.1 103.9 1.9 2.1 2.2 2.2 EMU 0.8 2.0 1.5 2.8 112.1 111.1 111.0 110.3 2.1 2.1 2.2 2.2 Belgium 1.0 3.0 1.1 3.2 123.5 124.4 123.0 122.3 1.5 1.9 2.5 2.3 Bulgaria 5.0 6.6 6.2 6.1 32.6 33.6 35.2 37.1 2.3 6.1 6.0 7.4 Czech Republic 3.6 4.5 6.4 6.4 73.8 76.2 77.2 79.4 -0.1 2.6 1.6 2.1 Denmark 0.4 2.1 3.1 3.5 124.7 124.5 126.3 126.7 2.0 0.9 1.7 1.9 Germany -0.2 1.1 0.8 2.9 117.1 116.1 114.6 113.7 1.0 1.8 1.9 1.8 Estonia 7.2 8.3 10.2 11.2 54.6 57.0 62.8 67.9 1.4 3.0 4.1 4.4 Greece 4.8 4.7 3.7 4.3 83.9 84.9 87.0 88.4 3.4 3.0 3.5 3.3 Spain 3.1 3.3 3.6 3.9 101.5 100.9 102.6 102.4 3.1 3.1 3.4 3.6 France 1.1 2.5 1.7 2.0 112.3 112.1 114.2 112.8 2.2 2.3 1.9 1.9 Ireland 4.3 4.4 6.0 5.7 140.7 141.5 143.7 143.8 4.0 2.3 2.2 2.7 Italy 0.0 1.2 0.1 1.9 111.2 107.6 105.4 103.7 2.8 2.3 2.2 2.2 Cyprus 1.8 4.2 3.9 3.8 89.1 91.3 93.6 93.2 4.0 1.9 2.0 2.2 Latvia 7.2 8.7 10.6 11.9 43.5 45.5 50.2 55.8 2.9 6.2 6.9 6.6 Lithuania 10.3 7.3 7.9 7.7 49.2 51.1 53.7 57.8 -1.1 1.2 2.7 3.8 Luxembourg 2.1 4.9 5.0 6.1 247.6 251.3 261.9 278.3 2.5 3.2 3.8 3.0 Hungary 4.2 4.8 4.1 3.9 63.6 63.9 64.8 65.3 4.7 6.8 3.5 4.0 Malta -0.3 0.1 3.1 3.2 78.7 75.9 76.0 75.5 1.9 2.7 2.5 2.6 Netherlands 0.3 2.2 1.5 3.0 130.0 130.3 131.9 132.2 2.2 1.4 1.5 1.7 Austria 1.2 2.3 2.0 3.3 129.1 128.8 128.6 128.8 1.3 2.0 2.1 1.7 Poland 3.9 5.3 3.6 6.1 49.1 50.8 51.0 53.0 0.7 3.6 2.2 1.3 Portugal -0.7 1.5 0.5 1.3 77.0 75.2 75.4 74.5 3.3 2.5 2.1 3.0 Romania 5.2 8.5 4.1 7.7 31.5 33.6 34.4 37.7 15.3 11.9 9.1 6.6 Slovakia 4.2 5.4 6.0 8.3 55.3 56.7 59.8 62.7 8.4 7.5 2.8 4.3 Finland 1.8 3.7 2.9 5.0 113.5 115.9 114.5 116.4 1.3 0.1 0.8 1.3 Sweden 1.7 4.1 2.9 4.2 120.5 120.4 119.1 120.3 2.3 1.0 0.8 1.5 United Kingdom 2.8 3.3 1.8 2.8 120.1 121.8 119.6 118.9 1.4 1.3 2.1 2.3 USA 2.5 3.6 3.1 2.9 152.4 153.5 155.4 154.6 2.1 2.9 3.2 3.2 Sources of data: SORS; Eurostat. Notes: 1PPS - Purchasing Power Standard. 2 Harmonised Index of Consumer Prices for EU countries and Consumer Price Index for the USA. International Comparisons / II Slovenian Economic Mirror IMAD No. 11/2007 p. A 15 Survey Unemployment Rate Current account balance1, % GDP General Government Balance, % GDP General Government Gross Debt, % GDP 2003 2004 2005 2006 2003 2004 2005 2006* 2003 2004 2005 2006 2003 2004 2005 2006 Slovenia 6.7 6.3 6.5 6.0 -0.8 -2.7 -2.0 -2.7 -2.7 -2.3 -1.5 -1.2 27.9 27.6 27.4 27.1 EU27 9.0 9.0 8.7 7.9 0.1 0.2 -0.5 -0.7 -3.1 -2.8 -2.4 -1.6 61.8 62.1 62.7 61.4 EU25 9.0 9.0 8.7 7.9 0.0 -0.1 -0.6 np. -3.1 -2.8 -2.4 -1.7 62.1 62.5 63.3 62.2 EMU 8.7 8.8 8.6 7.9 0.4 0.7 -0.1 -0.1 -3.1 -2.8 -2.5 -1.5 69.1 69.6 70.3 68.6 Belgium 8.2 8.4 8.4 8.2 4.1 3.5 2.5 2.3 0.0 0.0 -2.3 0.4 98.6 94.2 92.2 88.2 Bulgaria 13.7 12.0 10.1 9.0 -8.5 -5.8 -11.8 -15.8 0.0 2.2 2.0 3.2 45.9 37.9 29.2 22.8 Czech Republic 7.8 8.3 7.9 7.1 -6.2 -6.1 -2.1 -4.1 -6.6 -3.0 -3.5 -2.9 30.1 30.4 30.2 30.1 Denmark 5.4 5.5 4.8 3.9 3.4 2.4 2.9 2.5 -0.1 1.9 4.6 4.6 45.8 44.0 36.3 30.3 Germany 9.0 9.5 9.4 8.4 1.9 3.7 4.1 4.7 -4.0 -3.8 -3.4 -1.6 63.8 65.6 67.8 67.5 Estonia 10.0 9.7 7.9 5.9 -11.6 -12.5 -10.5 -14.2 1.8 1.8 1.9 3.6 5.5 5.1 4.4 4.0 Greece 4.7 4.5 4.3 4.4 -7.1 -6.2 -7.7 -11.4 -5.6 -7.3 -5.1 -2.5 97.9 98.6 98.0 95.3 Spain 9.7 10.5 9.8 8.9 -3.5 -5.3 -7.4 -8.5 -0.2 -0.3 1.0 1.8 48.7 46.2 43.0 39.7 France 11.1 10.6 9.2 8.5 0.4 -0.3 -1.6 -2.0 -4.1 -3.6 -2.9 -2.5 62.9 64.9 66.7 64.2 Ireland 9.5 9.6 9.7 9.5 0.0 -0.6 -2.6 -3.3 0.4 1.3 1.2 2.9 31.1 29.5 27.4 25.1 Italy 8.4 8.0 7.7 6.8 -1.3 -0.9 -1.6 -2.0 -3.5 -3.5 -4.2 -4.4 104.3 103.8 106.2 106.8 Cyprus 4.1 4.6 5.2 4.6 -2.3 -5.0 -5.6 -5.9 -6.5 -4.1 -2.4 -1.2 68.9 70.2 69.1 65.2 Latvia 10.5 10.4 8.9 6.8 -8.2 -13.0 -12.7 -21.1 -1.6 -1.0 -0.4 -0.3 1 4.4 14.5 12.5 10.6 Lithuania 12.4 11.4 8.3 5.6 -6.8 -7.7 -7.2 -10.7 -1.3 -1.5 -0.5 -0.6 21.2 19.4 18.6 18.2 Luxembourg 3.7 5.1 4.5 4.7 7.5 11.8 11.8 8.6 0.5 -1.2 -0.1 0.7 6.3 6.4 6.2 6.6 Hungary 5.9 6.1 7.2 7.5 -8.0 -8.4 -6.8 -5.9 -7.2 -6.5 -7.8 -9.2 58.0 59.4 61.6 65.6 Malta 7.6 7.4 7.3 7.3 -4.7 -8.0 -10.5 -6.3 -9.9 -4.9 -3.1 -2.5 69.3 72.7 70.8 64.7 Netherlands 3.7 4.6 4.7 3.9 5.5 8.5 7.7 9.9 -3.1 -1.7 -0.3 0.6 52.0 52.4 52.3 47.9 Austria 4.3 4.8 5.2 4.7 -0.2 0.5 1.3 3.7 -1.6 -1.2 -1.6 -1.4 64.6 63.8 63.4 61.7 Poland 19.6 19.0 17.7 13.8 -2.1 -4.2 -1.7 -2.3 -6.3 -5.7 -4.3 -3.8 47.1 45.7 47.1 47.6 Portugal 6.3 6.7 7.6 7.7 -5.9 -7.2 -9.2 -9.8 -2.9 -3.4 -6.1 -3.9 56.9 58.3 63.7 64.8 Romania 7.0 8.1 7.2 7.3 -5.5 -8.4 -8.7 -10.3 -1.5 -1.5 -1.4 -1.9 21.5 18.8 15.8 12.4 Slovakia 17.6 18.2 16.3 13.4 -0.9 -3.4 -8.5 -7.7 -2.7 -2.4 -2.8 -3.7 42.4 41.4 34.2 30.4 Finland 9.0 8.8 8.4 7.7 6.4 7.8 4.9 5.9 2.5 2.3 2.7 3.8 44.3 44.1 41.4 39.2 Sweden 5.6 6.3 7.4 7.1 7.3 6.8 6.2 7.0 -0.9 0.8 2.4 2.5 53.5 52.4 52.2 47.0 United Kingdom 4.9 4.7 4.8 5.3 -1.3 -1.7 -2.2 -3.4 -3.3 -3.4 -3.3 -2.7 38.7 40.4 42.1 43.2 USA 6.0 5.5 5.1 4.6 -4.8 -5.7 -6.4 -6.1 -4.8 -4.4 -3.6 -2.6 59.4 60.4 60.9 60.2 Sources of data: SORS; Eurostat. Notes: 1EU25 and euro area aggregates are adjusted for reporting errors concerning intra-EU trade; N/A - data not available. *European Commission Spring Forecasts. Graphs Slovenian Economic Mirror IMAD No.11/2007 p. A 16 INDUSTRY indices: average 2000=100 trend indices by the TRAMO-SEATS method ^ çp FREIGHT TRANSPORT BY ROAD AND RAIL (mio tonne km) 2004 QII QIII QIV 2005 QII QIII QIV 2006 QII QIII QIV 2007 QII QI QI QI QI GOODS TRADE FOB, EXCL. INTERCURRENCY CHANGES 12-month cummulatives in EUR, bn : BALANCE (right) & iä REAL INDICES OF CONSTRUCTION PUT IN PLACE indices: average 2000=100; trend indices by the TRAMO-SEATS method -CONSTRUCTION -BUILDINGS CIVIL ENGINEERING Q. OVERNIGHT STAYS TOTAL indices: average 1992=100; trend indices by the TRAMO-SEATS method -ORIGINAL INDICES — TREND INDICES 8 « fl ij. -5 Q u- < EMPLOYMENT AND UNEMPLOYMENT -EMPLOYMENT, indices 2000=100 -UNEMPLOYMENT RATE (right axis & 8 8 « Z o & 8 "5 CO Z o 145 200 180 135 160 125 140 120 100 105 80 50 0 15.0 21 4 19 3 13.0 17 2 11.0 15 13 0 96 9.0 11 92 7.0 9 Graphs Slovenian Economic Mirror IMAD No.11/2007 p. A 17 NET WAGES AND OTHER REMUNERATION, in EUR million OTHER REMUNERATION BILL PAYMENTS FOR INVESTMENT in EUR million, constant 2000 prices mti^ftšisimtJMitš EFFECTIVE EXCHANGE RATE IN REAL TERMS indices average 2001 = 100 HOUSEHOLDS' DEPOSITS in EUR million FOREIGN CURRENCIES DOMESTIC CURRENCY 1 I ^ S GROWTH IN SELECTED PRICE INDICATORS INDICES:2005=100 r K V -PRICE CONTROL —♦—CONSUMER PRICE INDICES —O—PRODUCER PRICE INDICES (DOMESTIC MARKET) C TO