Slovenian Economic Mirror ISSN 1318-3826 No. 9 / Vol. XVI / 2010 Publisher: IMAD, Ljubljana, Gregorčičeva 27 Director: Boštjan Vasle, MSc Editor in Chief: Jure Brložnik, MA Slovenian Economic Mirror was prepared by: Jure Brložnik, MA, Matevž Hribernik, (International environment); Barbara Ferk, MSc, Janez Kušar, Jože Markič, PhD, Tina Nenadič, MSc, Jure Povšnar, Mojca Koprivnikar Šušteršič (Economic developments in Slovenia); Tomaž Kraigher, Ana T. Selan, MSc (Labour market); Slavica Jurančič, Miha Trošt (Prices); Jože Markič, PhD (Balance of payments); Marjan Hafner (Financial markets); Gonzalo Caprirolo, MSc, Jasna Kondža, Dragica Šuc, MSc (Public finance); Matevž Hribernik (WEF Global Competitiveness Report 2010-2011), Ana Murn, PhD (State aid and "de minimis" measures in 2009), Mateja Kovač, MSc (Fisheries) Editorial Board: Lidija Apohal Vučkovič, Marijana Bednaš, MSc, Lejla Fajič, Alenka Kajzer, PhD, Rotija Kmet Zupančič, MSc, Janez Kušar, Boštjan Vasle, MSc Translator: Marija Kavčič Data Preparation and Graphs: Bibijana Cirman Naglič, Marjeta Žigman Concept and Design: Katja Korinšek, Pristop DTP: Ema Bertina Kopitar Print: Tiskarna Present d. o. o. Circulation: 90 copies © The contents of this publication may be reproduced in whole or in part provided that the source is acknowledged. Contents In the spotlight................................................................................................................................................................3 Current economic trends..............................................................................................................................................5 International environment...............................................................................................................................................7 Economic activity in Slovenia..........................................................................................................................................8 Labour market..................................................................................................................................................................13 Prices..................................................................................................................................................................................16 Balance of payments.......................................................................................................................................................20 Financial markets.............................................................................................................................................................21 Public finance....................................................................................................................................................................25 Boxes Box 1: Interim forecasts of the EC and OECD................................................................................................................8 Box 2: Participation of employed persons in programmes aimed at preserving jobs in Slovenia...................14 Box 3: September's deflation due to changes in the calculation of prices of school meals for primary school pupils.....................................................................................................................................................................16 Box 4: Results of the BS survey on demand for loans by non-financial institutions by activity.......................23 Box 5: Sovereign risk premium......................................................................................................................................25 Box 6: Main aggregates of the general government sector (ESA 95).....................................................................26 Selected topics..............................................................................................................................................................29 WEF Global Competitiveness Report 2010-2011......................................................................................................31 State aid and "de minimis" measures in 2009.............................................................................................................32 Fisheries.............................................................................................................................................................................34 Statistical appendix.....................................................................................................................................................37 On January 2008, the new classification of activities of business entities NACE Rev.2, which replaced NACE Rev. 1.1, came into force in all EU Member States. In the Republic of Slovenia, the national version of the standard classification, SKD 2008, which includes the entire European classification of activities but also adds some national subclasses, came into force on the mentioned date. In the Slovenian Economic Mirror, all analyses are based on the SKD 2008, except when the previous SKD 2002 classification is explicitly referred to. More general information about the introduction of the new classification is available on the SORS website http://www.stat.si/eng/ skd nace 2008.asp. All seasonally adjusted data in the Economic Mirror are calculations by IMAD. In the spotlight Even though the recovery was faster than expected, economic conditions in Slovenia's main trading partners remain fairly uncertain, which is also reflected in differences in the latest forecasts by international institutions. Due to higher-than-expected growth in the second quarter, the most recent forecasts for this year's economic growth in the euro area are higher than the spring forecasts, despite the expected slowdown in the second half of the year indicated by the movements of short-term indicators of economic activity and sentiment indicators. That uncertainty in the international environment remains high is also shown by differences between the autumn interim forecasts by the EC and OECD in the assessment of both the current situation and the expected speed of recovery in the second half of the year. After growing in the second quarter, the values of short-term indicators of economic activity in Slovenia declined in July, or increased more slowly, while construction activity recorded the lowest value since the beginning of the crisis. After the May and June increases, which also contributed to the relatively high average growth in the second quarter, nominal growth in merchandise exports eased in July, while production volume in manufacturing and nominal turnover in wholesale trade declined. After posting slower growth in the second quarter, real turnover in retail trade and in the sale of motor vehicles also declined in July, while growth in nominal turnover in accommodation and food service activities remained moderate. The situation is still deteriorating most notably in the construction sector, where after the 4% decline in the second quarter, the value of construction put in place was also down in July, falling to the lowest level since the beginning of the crisis. The moderation of economic activity is also indicated by the movement of the sentiment indicator. The decline in the number of employed persons in July was largely seasonal. Due to seasonal factors, the number of registered unemployed persons fell to 97,908. July's decline in the number of employed persons (-0.4%) was mainly attributable to the termination of fixed-term employment contracts. This year the decline of temporary employment was again largest in education, but was also considerable in manufacturing and trade. The August increase in the number of registered unemployed persons was relatively large (1.5%, seasonally adjusted). The inflow into unemployment due to job loss and the flow of unemployed persons who found jobs deteriorated as well. In September, the number of the registered unemployed declined to 97,908. The average gross wage per employee dropped by a nominal 0.7% in July, while at the y-o-y level, its growth slowed to 4.0%. As expected, the average gross wage declined in both sectors in July; in the private sector, after the relatively high growth in June, by 0.5% (most notably in activities that had strengthened the most in June), in the public sector by 1.3%, largely due to a seasonally usual lower workload in education and health care. Consumer prices declined by 0.5 % in September and y-o-y inflation was 2.0%. September's decline is largely attributable to changes in the calculation of prices of school meals (the introduction of the subsidy for all primary school pupils) because of which inflation was 0.7 p.p. lower than expected. Other price changes were consistent with the seasonal impacts typical for this time of the year (higher prices of clothing, lower prices of package holidays). In the euro area as a whole, y-o-y inflation was at 1.8% in September. The cost competitiveness of the economy improved in the second quarter after a longer period of decline, but less than in most euro area and EU countries due to relatively high wage growth in the private sector. Despite stronger wage growth in the private sector, cost competitiveness improved due to even higher productivity growth. While Slovenia had been in the group of euro area countries with the greatest losses in cost competitiveness since mid-2008, its improvement in 2010 was one of the smallest in the euro area. Slovenia's relatively worse position in the first half of this year largely reflects the accelerated deterioration in the construction sector, while manufacturing industries, which recorded an outstanding deterioration last year, are this year characterised by a significant improvement. The price competitiveness of the economy improved further in July, but the improvement in the first seven months was less noticeable than in most other euro area members. The WEF Global Competitiveness Report 2010-2011 shows that Slovenia's position deteriorated. In contrast to last year, when Slovenia's improvement on the WEF scale had largely resulted from lower scores given to other countries, Slovenia this year fell in terms of both indicator values and ranking. Among the main factors of the deterioration, the WEF points to limited access to financing, inefficient government bureaucracy, restrictive labour regulations, high tax rates and complicated tax regulations. Besides the IMD competitiveness report, this is yet another report showing that Slovenia's competitive position has deteriorated. According to data on paid taxes and social security contributions, payments increased in August after July's decline, but revenue from these payments nevertheless dropped by 2.5% y-o-y in the first eight months of 2010. In the first eight months, only revenues from value added tax (VAT) and social security contributions increased y-o-y, while revenues from all other taxes and contributions declined. According to the latest SORS data, the general government deficit in 2009 is estimated at 5.8% of GDP. It increased by 4.0 p.p. of GDP relative to 2008, when it accounted for 1.8% of GDP. General government revenue (EUR 15.3 bn) declined by 3.2% in nominal terms relative to the previous year, while expenditure (EUR 17.3 bn) increased by 5.4%. General government debt rose significantly in 2009, due to the widening general government deficit and further government borrowing to finance the deficit in 2010 (from 22.5% of GDP to 35.4%). In relative terms, it was still among the lowest in the EU, but its increase in 2009 was among the largest in the euro area. Another increasingly pressing argument for the consolidation of public finances is the situation on government bond markets. ■ö £ Q) E o £ O u Q) £ Q) 3 U International environment International institutions (EC, OECD, ECB) revised upwards their forecasts for economic growth in 2010, but uncertainty regarding the economic trends until the end of the year and in 2011 remains high. According to the revised forecasts, economic growth in the euro area will this year be much higher than expected in the spring, which is largely a result of the significantly stronger-than-expected recovery in the second quarter of this year. However, uncertainties in the international environment remain and could pose a risk to GDP growth in the second half of this year and in 2011 (see Box 1). As expected, short-term indicators of economic activity and sentiment indicators indicate a slowdown in economic activity in the euro area in the third quarter. The volume of industrial production in manufacturing dropped in the euro area in July, for the second month in a row. A modest decline was also recorded in Germany. The volume of new orders in manufacturing also dropped in the euro area in July, by 2.2% (in Germany, -2.6%). The most recent data are also attributable to the slowdown in global trade flows over the last few months. The volume of construction put in place also dropped substantially in July (-3.1%; 7.1% lower y-o-y), while growth in turnover in retail trade remained moderate, similar to previous months. A slowdown in GDP growth in the second half of the year is also suggested by sentiment indicators, even more so by the movements of short-term indicators. Expectations of enterprises regarding business operations in the coming months are lower, while the current situation is largely assessed as good. The values of main sentiment indicators for the euro area have already deteriorated more visibly over the past months (Ifo, Zew). The latest euro area PMI for manufacturing and services fell significantly in September. The yield spread of ten-year government bonds of certain euro area members vis-a-vis Germany hit new record levels in September. After the slump in May 2010 at the beginning Figure 1: Short-term indicators of economic activity the euro area -Industrial production in manufacturing -New orders in manufacturing in ■ Value of construction put in place ■ Total turnover in retail trade - ZEW -expectations for EMU (right axis) 110 e100 =15'" 95 85 of the sovereign debt crisis in Europe, the yield spread of Greek, Irish, Portuguese as well as Spanish government bonds against the German bond recorded new highs due to the uncertainty related to the recovery of the economy and consolidation of public finances in these countries. Interbank interest rates declined slightly in September. The value of the three-month EURIBOR averaged 0.88% and the value of the three-month USD LIBOR 0.29%. Changes in interbank interest rates have otherwise been relatively small over the past months (up to 25 basis points per month). Key interest rates of the main central banks remained unchanged also in September, as expected. The euro gained value relative to the US dollar in September. The average exchange rate of the dollar against the euro appreciated by 1.3% to USD 1,3067 to EUR 1, but was 10.3% lower y-o-y. The British pound sterling depreciated relative to the euro in September (by 2.0%, to GDP 0.8399 to EUR 1), while the Japanese yen continues to appreciate (by 0.2%, to JPY 110.26 to EUR 1) and so does the Swiss franc (by 2.5%, to CHF 1.3089 to EUR 1). The Swiss franc has been gaining value against the euro for 12 months in succession and was 13.6% higher y-o-y in September. The price of Brent crude oil remained approximately at the same level as in previous months, but in August, a significant increase was recorded for prices of non-energy commodities. The average monthly price of Brent crude oil rose by 1.4% to USD 77.8 a barrel in September; in euros, it remained unchanged (EUR 59.9 a barrel). In the first nine months of the year, oil prices in USD were 35.2% higher and oil prices in EUR 40.0% higher y-o-y. Dollar prices of non-energy raw materials rose by another 7.3% in August. Their growth still mainly resulted from higher prices of industrial products (10.1%), particularly metals. Prices of food increased as well (5.5%); the bulk of the increase is attributable to prices of wheat (25%), which have increased by as much as 83% since June, when they were lowest in five years. Figure 2: Yield to maturity of ten-year government bonds Portugal 6 -Q13 5 3 1 It 0 Source: Eurostat, ZEW; calculations by IMAD. C^C^C^C^C^C^C^C^C^C^C^C^CSCDCSCDCDCDCDCDCS CDCDCDCDCDCDCDCDCDCDCDCDCŠCDCŠCDCDCDCDCDCŠ r^r^r^r^r^r^r^r^r^r^r^r^rNr^rNr^r^r^r^r^rN Source: Eurostat. 10 9 115 8 7 90 2 Box 1: Interim forecasts of the EC and OECD The high level of uncertainty is also reflected in the significant differences in the interim autumn forecasts by the EC and OECD. While both institutions revised upwards their GDP forecasts for the last two quarters in the key economies, which are also Slovenia's main trading partners, the EC forecast is higher than the forecast by the OECD. The significant differences between the forecasts by these institutions (in the assessment of both the current situation and the expected speed of recovery in the second half of this year) are a sign of uncertainty, which still has a significant impact on the international economic developments. Despite the differences, neither of the institutions expects the economy to slide back into the recession (a double-dip scenario). Both institutions assume that economic growth in the key economies will continue to slow until the end of the year, relative to the second quarter, but while the OECD expects a stronger slowdown in the last two quarters than it did in the spring, the EC predicts higher growth, regardless of the easing. According to the EC, GDP is set to increase by 1.7% in the euro area (1.8% in the EU), up 0.8 p.p. from what the EC predicted in the spring, while the OECD has not released any new annual forecasts. Sentiment indicators used in the assumptions of these two institutions also point in different directions. The EC justifies the revision with the increase in the values of sentiment indicators (ESI, BCI, prepared by the EC), which indicate a further improvement of economic activity in the coming months, while the OECD revised its forecasts based on the value of the PMI, which has declined notably in recent months. The EC's optimism also reflects data on the structure of growth in the second quarter, which show a pick-up in domestic demand, with the contribution of growth in private investment and private consumption to total GDP growth exceeding the total contribution of changes in inventories and the international trade balance. This is, according to the EC, also encouraging for growth in the second half of this year, as European exports are expected to slow due to the expected easing of international trade. The OECD, in contrast, sees private consumption as one of the key factors that will limit economic growth in the second half of the year, given high unemployment, household indebtedness and the still tight situation on the real estate market, particularly in certain Member States. The OECD also regards the predicted fiscal consolidation as one of the negative risks, in addition to the distorted financial markets, which have yet to return to normal after the shocks in May 2010. Among the upside risks, both institutions cite a low share of investment in GDP. Amid growing profits in the last few quarters, it is private sector investment that is expected to play a crucial role in the economic recovery in the next quarters. The ECB also revised upwards its forecasts for economic growth in the euro area, expecting GDP to increase in the interval between 1.4% and 1.8% this year (in June, between 0.7% and 1.3%) and between 0.5% and 2.3% next year (in June, between 0.2% and 2.2%). Figure 3: Actual growth and interim forecasts of the EC and OECD - Germany and France I Actual growth 2.0 0.8 0.0 I EC Sep. 10 -OECD Sep. 10 a a a a a Source: EC, OECD, calculations by IMAD. Figure 4: Actual growth and interim forecasts of the EC and OECD - Italy and the United Kingdom I Actual growth I EC Sep. 10 -OECD Sep. 10 a a a a a Source: EC, OECD, calculations by IMAD. 2.4 1.6 1.2 0.4 -0.4 Economic activity in Slovenia After growing in the second quarter, the values of short-term indicators of economic activity in Slovenia declined or increased more slowly in July, while construction activity dropped to the lowest value since the beginning of the crisis. After the May and June increases, which also contributed to the relatively high average growth in the second quarter, merchandise exports increased more slowly in July, while production in manufacturing and nominal turnover in wholesale trade declined. After posting slower growth in the second quarter, real turnover in retail trade and in the sale of motor vehicles also declined in July, while nominal turnover growth in accommodation and food service activities remained moderate. The situation is still deteriorating the most in the construction sector, where after the 4% second-quarter decline, the value of construction put in place also declined in July, falling to the lowest level since the beginning of the crisis. Figure 5: Values of short-term indicators of economic activity in Slovenia - Merchandise exports (nom.) - Industrial production in manufact. -Value of construction put in place - Turnover in trade -Turnover in hotels and restaurants - Turnover in wholesale the second quarter, exports to Austria, Italy and Germany were still higher y-o-y than in the first (29.5%, 23.1% and 8.8% y-o-y, respectively), while exports to France remained the same as in the first quarter (23.2%). Y-o-y growth in exports to non-EU member states in the first half of this year mainly came from exports of electrical appliances and machinery and non-ferrous metals. Exports of medicinal product, which otherwise account for the greatest share of Slovenian exports to these markets (15%), and which had been dropping since the beginning of the crisis in late 2008, were already higher y-o-y in the second quarter this year. Among Slovenia's main trading partners outside the EU, the y-o-y decline of exports to Croatia slowed in the second quarter of this year (-4.5%), while exports to the Russian Federation and the US continued to grow (9.3% and 40.7%, respectively). Figure 6: Exports of goods by country 65 Germany Italy France Austria U. Kingdom (19.8) (11.6) (8.5) (7.8) (2.4) Source: SORS; calculations by IMAD. Note: In brackets, the share in Slovenian exports in 2009. Source: SORS; calculations by IMAD. In July, the value of merchandise trade remained at approximately the same level as in June. According to seasonally adjusted data, merchandise exports increased slightly (0.3%), while imports slightly declined (-0.3%). In the first seven months of 2010, exports were 12.4% and imports 12.2% higher y-o-y. In the first half of this year,1 Slovenian merchandise exports were stimulated by demand from the EU (y-o-y nominal growth 15.6%), with growth of exports to other markets being marginal (3.3%). In addition to the favourable international environment, high y-o-y growth in total exports was otherwise also a result of deep falls in the same period last year. The greatest contributions to growth of exports to the EU came from road vehicles, electrical equipment, and iron and steel. In Figure 1 Data on merchandise trade by country and according to the SITC are available only for six months. 7: Exports of goods according to the SITC Road vehicles Iron and steel; non-ferrous metals and metal products General industrial machinery; electrical machinery and equipment All other products 10 -10 -15 -20 -25 u a a Source: SORS; calculations by IMAD. 20 5 0 Growth in nominal merchandise imports in the first half of this year mainly resulted from production volume growth in manufacturing and higher import prices of energy and other primary commodities. The import component of exports has been strengthening steadily y-o-y since the third quarter of last year so that imports of intermediate goods accounted for 64.5% of the value of merchandise exports in the second quarter this year. Imports of investment goods were still lower y-o-y in the first half of this year, largely due to the decline in imports of machinery and equipment. Imports of consumer goods were gradually recovering, while imports of gasoline, non-durable and durable goods increased significantly y-o-y. The value of trade in services continues to grow more slowly y-o-y than the value of merchandise trade. In July, exports of services increased by 1.3% (seasonally adjusted) and were 4.9% higher y-o-y. Exports of transport services have been higher y-o-y in all months of this year, except in January, which is attributable to the movement of merchandise exports. Exports of travel services, which had remained unchanged in the first half of this year relative to the same period last year, recorded modest y-o-y growth in July (2.4%). Exports of the group of other services were higher y-o-y, after they declined in the first half of the year. While exports of construction services were still falling y-o-y, exports of financial services, merchanting and miscellaneous business, professional and technical services increased. Imports of services declined by 2.3% in July, after growing in the preceding five months (seasonally adjusted), and were still lower than in the previous July (-0.3%). Imports of transport services recorded similar movements as exports. After g rowing y-o-y in the first half of the year, imports of travel services declined in July. Imports of the group of other services fluctuated the most in the first seven months of this year. Imports of construction services were higher in June and July, after several months of y-o-y declines. Imports of licences, patents and copyrights, i.e. services Table 1: Selected monthly indicators of economic activity in Slovenia Figure 8: Trade in services -Exports of services Imports of services in % 2009 VII 10/ VI 10 VII 10/ VII 09 I-VII 10/ I-VII 09 Exports1 -18.4 -0.1 12.3 10.2 -goods -19.4 -4.3 14.7 12.1 -services -14.7 17.9 4.9 2.5 Imports1 -23.6 2.9 8.3 11.0 -goods -25.7 -2.7 10.6 12.4 -services -10.2 36.2 -0.3 3.6 Industrial production -16.9 -1.82 9.53 5.63 -manufacturing -18.1 -2.42 10.33 6.33 Construction -value of construction put in place -21.0 -3.22 -17.73 -17.73 Distributive trade - total turnover in retail trade -12.8 -2.22 4.43 1.93 Hotels and restaurants - turnover in hotels and restaurants -11.8 1.12 5.03 1.43 Sources: BS, SORS; calculations by IMAD. Notes: 1balance of payments statistics, 2seasonally adjusted, 3working-day adjusted data. raising the level of the technological development of the economy, are increasing substantially. Production volume in manufacturing declined in July (2.3%, seasonally adjusted) after the pick-up in previous months, while it was one tenth higher y-o-y (working-day adjusted). In July, production remained lower y-o-y in some less technology-intensive industries, i.e. the furniture and textile industries and in the repair and installation of machinery and equipment. In all high-technology industries it increased again y-o-y, most notably in the manufacture of ICT and electrical appliances,2 and in the manufacture of other machinery and equipment, Figure 9: Production in manufacturing according to technology intensity High-and medium-high-technology-intensive industries Medium-low -technology-intensive industries Low-technology -intensive industries Source: SORS; calculations by IMAD. 2 Besides the food-processing industry, this is the only industry, in which inventories increased y-o-y in the first seven months of the year. which recorded one of the largest drops in activity last year. Production growth in the manufacture of transport equipment was relatively modest (8.4%, averaging 22.0% in the first six months), which is in line with expectations, in view of the slowdown in new orders from the euro area due to the expiry or reduction of incentives for the purchase of new passenger cars and light commercial vehicles. The current indicators still show a slower recovery on the domestic market than abroad, but enterprises have higher expectations for the next three months. The indicators of expected total demand and expected exports improved. The current indicators otherwise still show a stronger recovery on the foreign markets than on the domestic market. After the first seven months, turnover on the domestic market was still lower than in the same period last year, while turnover on the domestic market increased by around 13%. Data on new orders show a similar situation. In the first seven months of this year, new orders on foreign markets increased by around one quarter y-o-y. New orders on the domestic market, in contrast, rose only by 6.0% y-o-y. Other indicators of expectations (production, employment and prices) remained at a similar level as in the preceding month. Figure 10: Selected indicators of business trends in manufacturing -Production expectations -----Expected employment -Expected total demand - Selling price expectations Expected export order-books 40 T3 30 20 10 C (D 0 -10 -20 -30 -40 -50 -60 ..4.....j.....i..... : A ; : : : lA -r-?"-'- ' .....[ ■f - ......i . \jL' r-'i 1 ____ i % \ —f................. \y-iJ- 1 1 1 1 1 \ \ \ \ \ \ , : : / ....o....,;' * i.. ; 1 1 1 1 / 1 1 1 1 ____4.....t.....1.....4.....i-____ ......... ......i.....i- Source: SORS. Construction activity declined further in July, falling to a new low after the beginning of the crisis. According to seasonally adjusted data by SORS, the value of construction put in place declined by 3.2% and was 17.7% lower than in the same month last year. After a significant decline at the end of 2008 and a modest strengthening at the beginning of 2009, construction activity was slowly but steadily declining last year and in 2010, and was 44% lower in July than the highest value recorded in October 2008 before the crisis. Residential construction has dropped the most in recent months (being 51.2% lower y-o-y in July), which is related to the intensive construction before the crisis and accumulation of inventories. Civil engineering is also declining and was 20.1% lower y-o-y in July, which is mainly attributable to the completion of the motorway network. Residential construction has, amid considerable monthly fluctuations, hovered at a similar level since the beginning of 2009 (being 1.6% higher y-o-y in July). Figure 11: Value of construction put in place 200 Construction -total Residential buildings 18^ ^^^^^^.............f.....^.................Non-residential buildings Civil engineering works 140 100 80 Source: SORS; calculations by IMAD. In August, electricity production and consumption were around 7% higher y-o-y; international electricity trade increased much more. Electricity production was 7.3% higher y-o-y, of which one quarter in thermal power plants, while production in other power plants remained nearly unchanged. Electricity consumption was 6.9% higher y-o-y. Altogether 55% of the increase came from consumption by direct consumers and more than 40% Figure 12: Contractual cross-border electricity exchange 300 200 100 0 . -100 ) -200 -300 -400 -500 Italy Austria Croatia* August 2010 August 2009 Source: ELES. Note: excluding exports of 50% of NEK production. from the pumped-storage power plant Avče (the rest was transmission loss). Consumption from the distribution network, which accounts for a solid four fifths of total electricity consumption, was lower in August after eight months of y-o-y growth (by 0.2%), which is, according to our estimation, largely due to unstable weather conditions and a lower use of air-conditioning. Excluding the Croatian half of the nuclear power plant's production, Slovenia's net electricity imports accounted for 4.6% of consumption in August. Contractual electricity exports and imports represented 58% and 62% of consumption, respectively, and were 55.4% and 42.6% higher y-o-y, respectively. Overall 80% of total electricity imports came through Austria and 50% of total electricity exports were made through Croatia. Turnover in all three trade sectors declined (seasonally adjusted) in July after it increased substantially in June. Turnover in wholesale trade and in the sale of motor vehicles3 declined more notably in July (by 4.5% and 3.3%, respectively), for the first time since December last year, but was still higher in both sectors than in the months of the greatest crisis, largely due to high growth in March and June. The movement of turnover in retail trade, which remained approximately at the same level in July as in June, is largely dependent on the movement of turnover in the sale of automotive fuels. This started to decline in 2009, as a result of a decline in freight forwarding, as well as due to Slovenia's excise duty policy and relatively higher fuel prices than in the neighbouring countries. With renewed growth in freight forwarding, the sale of automotive fuels also started to increase at the end of last year. For several months, turnover in the sale of non-food product has persisted at the level recorded in the second half of 2009, while turnover in the sale of food, beverages and tobacco product remained roughly at the 2005 average. Against the background of less favourable movements in Figure 13: Turnover in trade sectors -Retail trade -----Automotive fuel -----Wholesale, retail trade and repair of motor vehicles and motorcycle -Wholesale 160 150 52 140 — (u TD (U ro 130 aliS 120 110 JO Source: SORS; calculations by IMAD. July, turnover growth rates slowed y-o-y in all three trade sectors, particularly in the sale and repair of motor vehicles (by 12 p.p. to 3.5%), which was attributable to a decline in the sale of new passenger cars4 and lower turnover from the maintenance and repair of passenger cars. Nominal turnover in accommodation and food service activities was up again in July, which was, in addition to last year's low base, reflected in its higher y-o-y growth. Growth in July's turnover in accommodation and food service activities (1.1%, seasonally adjusted) was probably a consequence of a higher number of foreign tourists in Slovenia, as the number of their overnight stays increased by 4.3% y-o-y. Turnover in accommodation in food service activities in July was thus 5.6% higher y-o-y in nominal terms. Household consumption remains limited, given a further decline in the net wage bill. Modest y-o-y growth in real turnover in retail trade over the last three months (June-August) was not so much a consequence of the actual recovery of consumption as last year's low base. In the third quarter, the consumer confidence indicator declined slightly and the number of first passenger car registration by natural persons was 18.1% lower y-o-y, after the 7% drop in the same period last year. Household spending is thus not expected to improve in the second half of this year. Figure 14: Household consumption indicators Turnover in retail trade (left axis) No. of first car registrations by natural persons (left axis) -Net wage bill (left axis) ---Consumer confdence indicator, original value (right axis) Source: SORS, MI-IAAD. After deteriorating slightly in August, the seasonally adjusted value of the sentiment indicator remained unchanged in September. The seasonally adjusted confidence indicator in manufacturing did not change 3 Nominal turnover in wholesale trade and real turnover in the sale of and repair of motor vehicles. 4 The number of total first passenger car registrations declined by 0.7% in July; within that, the registrations by natural persons dropped by 9.5%. In August, the number of first passenger car registrations was again higher y-o-y (6.6%; within that, the registrations by natural persons declined by in September, but the confidence indicator in services deteriorated slightly, while the consumer confidence indicator and the confidence indicators in retail trade and construction improved somewhat. The value of the latter increased for the second month in a row and was highest since December 2009, though it remained very low. Figure 15: Business trends -Economic sentiment -Retail trade -Service act. 40 30 20 d ^ 10 '■TD a0 olanls -10 -20 eulav -30 -40 aci -50 -60 -70 CO CO C^ O^ 0 0 0 0 O ^ C Source: SORS. Labour market The decline in the number of employed persons in July was largely seasonal in nature. The total number of employed persons declined by 0.4%, and according to seasonally adjusted data, by 0.2%, due to a strong seasonal component. The total number fell particularly as a result of the drop in the number of employees (3,216 persons), Figure 16: Persons in employment including and excluding self-employed farmers -Persons in employment -Persons in employment excluding self-employed farmers 900,000 890,000 880,000 870,000 860,000 850,000 840,000 830,000 820,000 810,000 800,000 ^^ C^ ^^ Source: SORS; calculations by IMAD. Table 2: Persons in formal employment by activity Number in 1,000 Y-o-y growth rates, % 2009 VII 09 VI 10 VII 10 2009/ 2008 VII 10/ VI 10 VI 10/ VI 09 A Agriculture, forestry and fishing 37.9 37.9 34.7 34.1 -4.5 -1.8 -10.1 B Mining and quarrying 3.3 3.3 3.0 3.0 -7.5 -0.6 -9.3 C Manufacturing 199.8 197.8 189.0 188.5 -10.1 -0.3 -4.7 D Electricity, gas, steam and air conditioning supply 7.9 7.9 8.0 8.0 2.9 -0.2 0.8 E Water supply sewerage, waste management and remediation activities 9.0 9.1 9.2 9.3 2.3 0.5 1.7 F Constrution 86.8 87.2 79.3 79.1 -1.3 -0.2 -9.3 G Wholesale and retail trade, repair of motor vehicles and motorcycles 114.6 114.1 112.2 111.6 -1.0 -0.5 -2.2 H Transportation and storage 49.8 49.6 48.0 47.9 -2.8 -0.3 -3.6 I Accommodation and food service activities 34.0 34.3 33.5 33.3 0.6 -0.6 -3.0 J Information and communication 22.5 22.5 22.5 22.5 2.8 0.2 -0.1 K Financial and insurance activities 24.5 24.6 24.5 24.5 1.0 -0.1 -0.5 L Real estate activities 4.4 4.4 4.3 4.3 4.7 -0.3 -2.0 M Professional, scientific and technical activities 44.8 44.6 46.9 47.1 4.6 0.5 5.7 N Administrative and support service activities 25.6 25.4 26.6 26.6 -1.7 -0.1 4.4 O Public administration and defence, compulsory social security 51.5 51.7 52.4 52.2 1.1 -0.4 0.9 P Education 61.7 60.7 63.4 62.4 2.8 -1.6 2.8 Q Human health and social work activities 52.1 52.2 53.4 53.4 2.1 -0.1 2.2 R Arts, entertainment and recreation 14.1 14.1 14.2 14.1 1.8 -0.6 0.4 S Other service activities 13.3 13.4 13.5 13.5 3.7 0.0 0.9 T Activities of households as employers, undiferentiated goods - and services -producing activities of households for own use 0.5 0.6 0.6 0.6 7.0 -1.4 1.1 Figure 17: Subsidies paid for employed persons participating in the short-time working scheme and in the partial reimbursement of payment compensation scheme 45,000 40,000 35,000 30,000 -iJ 25,000 20,000 -Partial subsidising of full-time work -Partial reimbursement of payment compensation 15,000 10,000 5,000 —;-r- Box 2: Participation of employed persons in programmes aimed at preserving jobs in Slovenia In the first half of this year, the number of employed persons that participated in programmes adopted in 2009 to preserve jobs was lower than last year.1 The Partial Subsidising of Full-Time Work Act entered into force in 2009. In the first half of 2009, when economic activity dropped most notably, a relatively high number of persons participated in these programmes. Since the beginning of payments in February and up to June 2009, subsidies under the short-time working scheme were paid for 36.5 thousand employed persons per month, on average, which is 4.2% of all employed persons in that period. In the second half of 2009, the number of subsidies paid started to decline gradually, dropping to an average of 29.2 thousand per month (3.4% of all employed persons in that period). The deadline for enterprises to apply for subsidies expired at the end of March this year, but subsidies continue to be paid based on the already concluded contracts, which expired at the end of September 2010, according to ESS data. In the first half of 2010, only 7,931 subsidies for employed persons were paid on average per month (0.9% of employed persons in that period), which is 78% below the monthly average in the first half of last year. The number of those included in the scheme under the Partial Reimbursement of Payment Compensation Act, which took effect in July last year, was lower than the number of persons participating under the Partial Subsidising of Full-Time Work Act, as the eligibility conditions tightened, but also as the crisis stopped deepening in the second half of last year. In the period between July 2009 and June 2010, the partial reimbursement of the compensation was paid for an average of 4,783 employed persons waiting for work per month, which accounted for 0.6% of all employed persons in that period. Similar to the Partial Subsidising of FullTime Work Act, the interest in this scheme also declined this year, given that in the first half of this year, 9.9% fewer subsidies were paid per month, on average, than in the second half of last year. Employers were able to file for the partial reimbursement of payment compensation by the end of March 2010 and with the foreseen extension of contracts, subsidies are expected to be paid up to the end of March 2011. .a ™ - o Source: ESS; calculations by IMAD. v.- A ........................ V................... .................. ■"}........ 1 Within the anti-crisis stimulus package, Slovenia adopted two acts to preserve jobs last year, similar to some other European countries. The Partial Subsidising of Full-Time Work Act was adopted in January 2009 and the Partial Reimbursement of Payment Compensation Act at the end of May 2009. For more on this topic see IMAD, Economic Issues 2010, p.p. 87-90. mainly attributable to the termination of fixed-term employment contracts, which is typical before the summer holidays. This year, the decline of temporary employment was again greatest in education (by 991), but also in manufacturing and trade. In July, the number of employed persons declined relatively more than in previous months also in transport and hotels and restaurants, and after a few months, again in public administration; it increased more significantly only in professional, scientific and technical activities. The number of people in employment including self-employed farmers dropped by 2.3% y-o-y in July; excluding self-employment farmers by 1.9%.5 The number of vacancies (14,293) remained higher y-o-y in August, but the number of new hires (6,613) was still lower than a year previously. Figure 18: Persons in employment by activity 5 SORS estimates the number of self-employed farmers based on data from the Labour Force Survey for the previous quarter. The number of farmers among formally employed persons thus tends to fluctuate every three months. It is thus estimated to have declined by 5,781 (17.9%) between December 2009 and January 2010 and increased again by 2,718 or 10.3% between March and April 2010. As such strong fluctuations are difficult to explain, it is sensible to exclude them from the analysis of the dynamics of persons in formal employment. IV 10 / IV 10 IVI 10 / V 10 IVII 10 / VI 10 The number of registered unemployed persons declined in September, after the significant increase in August. The relatively great increase in August is shown by the seasonally adjusted monthly growth rate (1.5%). The inflow into unemployment due to job loss and the flow of unemployed persons who found jobs deteriorated as well. The former (5,671) was higher y-o-y for the first time this year, while the latter (3,963) was smaller y-o-y for the first time since March 2010. At the end of August, 99,032 persons were registered as unemployed, at the end of September, 97,908 (according to seasonally adjusted data, 1.1% more than in August and 10.8% more than in September last year). The registered unemployment rate remained the same in July as in previous two months (10.5%). Figure 19: Registered unemployment Registered unemployed (in '000, left axis) - Y-o-y growth (in %, left axis) ---Seasonally adjusted monthly growth (in %, right axis) -Unemployment rate (in %, right axis) 10 8 6 4 2 0 ^^ ^^ ^^ ^^ Ci u ^ c Source: ESS; calculations by IMAD. Table 3: Labour market indicators v % 2009 VII 10/ VI 10 VII 10/ VII 09 I-VII 10/ I-VII 09 Labour force 0.2 -0.3 -1.0 -1.0 Persons in formal employment -2.4 -0.4 -2.3 -3.0 - Employed in in enterprises and organisations and by those self-employed -2.5 -0.4 -2.2 -3.0 Registered unemployed 36.6 0.2 11.2 20.9 Average nominal gross wage 3.4 -0.7 4.0 4.0 - private sector 1.8 -0.5 5.0 5.4 - public sector 6.5 -1.3 0.8 -0.3 2009 VII 09 VI 10 VII 10 Rate of registered unemployment, in % 9.1 9.4 10.5 10.5 Average nominal gross wage (in EUR) 1,438.96 1,424.23 1,491.57 1,480.69 Private sector (in EUR) 1,338.77 1,326.60 1,399.56 1,392.58 Public sector (in EUR) 1,749.82 1,726.24 1,761.92 1,739.58 The average gross wage per employee dropped by a nominal 0.7% in July, while its y-o-y growth slowed to 4.0%. In the first seven months, the average growth was also 4.0% higher than in the same period last year (4.8% last year), which reflects wage growth in the private sector. Figure 20: Nominal gross wage per employee -Total -Private sector -----Public sector Source: SORS; calculations by IMAD. In the private sector, the average gross wage per employee was 0.5% lower in July than in June. This year's relatively high y-o-y growth slowed somewhat (5.0%). The decline in private sector wages in July was expected, after relatively high growth in June, even if July was one working day longer.6 Growth in this sector's gross wage was somewhat slower y-o-y. The bulk of wage growth came from the Figure 21: Breakdown of the monthly increase in the private sector gross wage Wage excluding overtime work and payments in arrears Overtime payments Payments in arrears 15 Wage growth, in % & & ^ & Source: SORS; calculations by IMAD. 6 Wages fell most notably in activities where they had increased the most in June (in electricity, gas and steam supply, and in financial and insurance activities). 2 gross basic wage (without payments for overtime work and payments in arrears; 4.6 p.p.), which grew significantly in March upon the minimum wage increase. With a greater volume of paid overtime work compared with the same period last year, the contribution of payments for overtime work to wage growth was slightly positive, but remained much lower than before the crisis. Growth remains highest in the industry group (B-E; 7.3%) and lowest in business services (J-N, S, 3.1%). The average gross wage per employee in the public sector declined in July largely due to a seasonally usual lower workload in education and health care (-1.3%). Despite the adjustment (by 0.65%),7 the average gross wage in the public sector declined. The decline was expected in education (-2.7%), as in education activities, wages typically decline by 2% in July due to a lower volume of additional school activities at the beginning of school holidays. The workload in health care also tends to be somewhat smaller during the summer months, which was reflected in the July reduction in wages (-0.8%), while in other activities, the decline of wages was less pronounced (0.2% in public administration and 0.6% in arts, entertainment and recreation). In the first seven months, the gross wage in this sector was slightly lower than in the same period last year (-0.3%), as a result of the decline in health care (-0.5%) and public administration (-1.1%), while it was slightly higher in education and arts, entertainment and recreation (0.5% and 1.0%, respectively). Prices In September, consumer prices declined by 0.5% (-0.2% last year) andyear-on-year inflation was 2.0% (2.3% in August). In the first nine months of this year, prices increased by 1.5% (1.3% last year), in the euro area by 1.2%, according to Eurostat's preliminary data, and in September, by 1.8% y-o-y. Figure 23: Inflation in Slovenia and in the euro area & & ii & Source: SORS, Eurostat. Figure 22: Breakdown of the monthly increase of the gross wage in the public sector Wage excluding overtime work and payments in arrears Overtime payments Payments in arrears — Wage growth, in % 4 3 2 1 ^ 0 i3 § -1 -2 ......f--4- ■i.....i.....f-4......1.....f.....[ ■4..........f--4......i.....4- Source: SORS; calculations by IM AD. 7 In line with the Agreement on Measures Regarding Public Sector Salaries in December 2009-November 2011 and Annex No. 2 to the Collective Agreement for the Public Sector by half of the y-o-y inflation predicted in the spring (1.3%). Box 3: September's deflation due to changes in the calculation of prices of school meals for primary school pupils September's decline in the general price level is largely attributable to a substantial impact of subsidised school meals for all primary school pupils, introduced according to the Act on School Diet. The introduction of the subsidy on 1 September 2010 reduced the price of school meals paid by consumers (e.g. parents of primary school pupils) by 68.8%, which in turn, lowered monthly inflation by 0.7. p.p. Monthly inflation would have otherwise amounted to 0.2%, approximately, which would be consistent with our expectations for that month. Consumer price growth is this year significantly characterised by higher energy prices and excise duty rises. Energy price growth, which contributed 1.2 p.p. to 2% inflation in the first eight months of 2010 (excise duty rises, approx. 0.6 p.p.) is directly (liquid fuels for transport and heating) and indirectly (district heating, natural gas, and to a lesser extent solid fuels and electricity) related to oil price dynamics in the international environment and the USD/ EUR exchange rate, which dropped 11% in that period. Oil price growth in euros was therefore much higher than in dollars this year, particularly in the second quarter. The total impact of higher taxes amounted to 0.8 p.p. this year, according to our estimation. As a result of growing -4 Table 4: Breakdown of HICP into sub-groups - the first eight months of 2010 Evro area Slovenia Cum. % Weight % Contribution in p.p. Cum % Weight % Contribution in p.p. Total HICP 0.9 100.0 0.9 2.1 100.0 2.1 Goods 0.5 58.0 0.3 1.4 66.2 0.9 Processed food, alcohol and tobacco 0.8 11.9 0.1 3.5 14.8 0.5 Non-processed food 1.7 7.3 0.1 5.9 6.9 0.4 Non-energy industrial goods -1.9 29.3 -0.6 -4.4 30.7 -1.3 Durables 0.1 9.5 0.0 -2.9 11.5 -0.3 Non-durables 0.4 8.3 0.0 0.4 8.8 0.0 Semi-durables -4.8 11.5 -0.5 -9.7 10.3 -1.0 Energy 6.7 9.6 0.6 9.7 13.9 1.3 Electricity for households 1.7 2.4 0.0 5.9 2.6 0.2 Natural gas 6.7 1.5 0.1 15.7 0.8 0.1 Liquid fuels for heating 14.8 0.8 0.1 21.2 1.5 0.3 Solid fuels 0.1 0.1 0.0 -1.6 1.0 0.0 District heating -3.3 0.5 0.0 15.0 0.8 0.1 Fuels and lubricants 9.1 4.2 0.4 9.1 7.2 0.7 Services 1.6 42.0 0.7 3.4 33.8 1.1 Services - dwellings 1.3 10.2 0.1 4.8 2.7 0.1 Services - transport 2.6 6.6 0.2 1.3 5.2 0.1 Services - communications -0.2 3.3 0.0 0.9 3.4 0.0 Services - recreation, repairs, personal care 1.7 14.9 0.3 5.2 14.3 0.7 Services - other services 1.0 7.1 0.1 1.8 8.1 0.1 HICP excluding energy and non-processed food 0.1 83.1 0.1 0.2 79.3 0.2 Source: Eurostat; calculations by IMAD. Note: ECB classification energy prices and higher excise duties and to a lesser extent also due to prices of non-processed food, inflation in Slovenia exceeds inflation in the euro area, which was 1.6% y-o-y in August (HICP);8 in Slovenia, 2.4%. were hence frozen for six months by the government at the end of August. During this time, the government will adopt a decree tying the formulation of these prices to the quality of services and improve supervision. The relatively weak demand is reflected in moderate indicators of core inflation. As last year, the movement of core inflation is also very moderate this year, due to weak demand. Among the prices groups, which make up the consumer price index excluding non-processed food and energy (core inflation), this is most visible in prices of non-energy industrial goods, which continue to drop in Slovenia (4.4% in the first eight months of this year). In the euro area, these prices increased slightly in the same period, which is a key reason for somewhat higher core inflation in the euro area than in Slovenia. Prices of processed food9 were up 3.3% in Slovenia in the first eight months of this year (2.4% last year); domestic growth of services prices (4.4%) was somewhat lower than in the same period last year, but nevertheless somewhat higher than in the euro area as a whole. Among services prices, which increased relatively slowly in the first months of the year, public utility prices recorded outstanding growth for the second consecutive year and 8 Comparisons between price movements in the euro area and in Slovenia are based on the harmonised index of consumer prices (Eurostat). 9 The group of processed food also includes alcohol, non-alcoholic beverages and tobacco. Figure 24: Breakdown of y-o-y inflation into contributions of individual sub-groups Non-energy industrial goods Processed food, alcohol and tobacco Energy -0.5 0.0 0.5 1.0 Percentage points Source: SORS; calculations by IMAD. Domestic producer prices on the domestic market are also changing under the impact of external factors. In the last four months, y-o-y growth in producer prices of manufactured goods on the domestic market hovered between 2.6% and 2.9% (August). Y-o-y growth is still mainly affected by price movements in the manufacture of metals and metal products, which is a result of impacts from the international environment, largely the movement of prices of metals, the USD/EUR exchange rate and, indirectly, prices of oil. Price movements in other industries are highly heterogeneous: in certain manufacturing industries, prices were down y-o-y in August, in others (the manufacture of food-products), they remained approximately the same, while relatively high y-o-y growth rates were recorded in the manufacture of textiles and clothing, paper and chemical products; y-o-y growth in furniture prices remained at the average level of the last few years, just above 5%. According to SORS data, price growth in business services is moderate, as prices rose only 0.1% in the second quarter, which is, according to our estimation, a result of weak demand. Figure 25: Growth in industrial producer prices -PPI (domestic market) -Mfr. of basic metals, fabricated metal prod., exc. mach. and equip. --------- Manufacture of furniture, and other manufacturing ---Mfr. of food products; beverages and tobacco products ---------Mfr. of chemicals and chemical prod., and basic pharm. products The price competitiveness of the economy continued to improve in July, but the improvement in the first seven months was less noticeable than in most other euro area members. The real effective exchange rate measured by relative consumer price growth, which declined in the first quarter largely under the impact of the depreciation of the euro, dropped in July (-0.4%) due to the fall in relative prices.10 In July, it was 1.8% lower than in December last year and in the first seven months of 2010, 0.9% lower than in the comparable period last year. After falling for eight months, the nominal effective exchange rate of the euro appreciated in July largely due to the strengthening of the euro against the USD, and to a lesser extent, against the GBP, HUF and JPY. In the first seven months of this year, Slovenia was at the last-but-one place among the euro area members regarding the improvement of price competitiveness. This relatively worse Slovenia's position is partly attributable to the structure of Slovenia's external trade,11 and partly to growth in relative consumer prices, which are increasing slowly in Slovenia in 2010 for the second year in a row, while in the majority of other euro area countries they are falling. Figure 26: Real effective exchange rates of euro area members deflated by HICP, in the first seven months of 2010 Nominal effective exchange rate ■ Relative prices (HICP) ♦ Real effective exchange rate # -1 -2 Source: ECB; calculations by IMAD. Figure 27: Real unit labour costs (RULC) in Slovenia and EU average ^^m RULC Slovenia RULC EU -----Labour productivity, Slovenia -----Labour productivity, EU -Compensation per employee, Slovenia -Compensation per employee, EU Source: Eurostat; calculations by IMAD. 0 In Slovenia, compared with its trading partners. 11 The share of trade with euro area countries in the structure of Slovenia's external trade is above average, meaning that the depreciation of the euro has a smaller impact on Slovenia's price competitiveness. 2 0 -6 Table5: Indicators of price and cost competitiveness y-o-y growth rates, % 2008 2009 q3 09 q4 09 q1 10 q2 10 Effective exchange rate' Nominal 0.5 0.4 0.3 1.8 -0.3 -1.9 Real, deflator CPI 2.8 0.7 0.2 2.3 -0.3 -1.3 Real, deflator PPI 0.8 2.8 3.7 1.4 -2.4 -3.3 Real, deflator ULC 3.1 5.0 4.4 4.6 2.1 -0.6 Unit labour costs, economy and components Nominal unit labour costs 5.9 8.5 7.3 3.3 1.5 0.6 Compensation per employee, nominal 6.9 1.6 0.7 0.9 3.4 5.0 Labour productivity, real 1.0 -6.4 -6.2 -2.3 1.9 4.4 Real unit labour costs 1.8 5.1 4.9 1.3 1.0 -0.7 Labour productivity, nominal 5.0 -3.3 -4.0 -0.5 2.4 5.8 Source: SORS, ECB, EUROSTAT, OECD; calculations by IMAD. Note: ^relative to the 17 trading partners The cost competitiveness of the economy improved in the second quarter after a longer period of decline, but less than in most euro area and EU countries due to relatively high wage growth in the private sector. After a year of a gradual easing of growth, real unit labour costs and the real effective exchange rate deflated by relative unit labour costs declined y-o-y in the second quarter (the former by 0.7%, the letter by 0.6%, according to the estimation) to be only slightly higher in the first six months than a year previously (0.1% and 0.8%, respectively).The improvement is related to renewed labour productivity growth due to the rebound in economic growth, amid an only slightly slower y-o-y decline in employment. Growth in the compensation of employees per employee accelerated under the impact of stronger growth in private sector wages, but was lower than labour productivity growth in the second quarter. While Slovenia had been in the group Figure 28: Real unit labour costs in selected EU countries12 in the first half of 2010 Labour productivity ■ Compensation per employee ♦RULC 9 6 3 0 CT -3 -12 -15 Source: Eurostat; calculations by IMAD. 2 Mid-year data were available only for 19 EU countries. of euro area and EU countries with the greatest losses in cost competitiveness since mid-2008, its improvement was one of the smallest in the euro area and EU this year. Slovenia's relatively worse position was this year attributable to faster wage growth in Slovenia than in most other countries, while last year it reflected a greater drop in productivity. Broken down by activities, the relatively worse position of Slovenia's economy in the first six months was mainly a result of a pronounced loss in cost competitiveness in the construction sector. The latter reflects the decline in productivity due to shrinking construction activity amid a simultaneous acceleration of growth in the compensation of employees per employee. Manufacturing industries, which recorded an outstanding deterioration last year, are this year characterised by a significant improvement. Even though this year's increase in the minimum wage Figure 29: Cost competitiveness by sector in the first six months of 2010 ■ Compensation per employee, nominal ■ Labour productivity, nominal 18 •RULC 16 14 12 10 8 6 4 2 0 -2 -4 -6 A,B C,D,E D F G,H,I J,K L -P Total Source: SORS; calculations by IMAD. -6 had the greatest impact on growth in the compensation of employees in manufacturing, real unit labour costs declined significantly due to a simultaneous (and even greater) increase in labour productivity. In the first quarter, labour productivity growth was largely a result of shrinking employment, while in the second, it also reflected resumed value added growth. Balance of payments In July, the current account of the balance of payments recorded a surplus again (EUR 57.2 m), and in the first seven months of this year, a deficit of EUR 106.0 m (-EUR 323.9 m in the same period last year). July's y-o-y change in the balance of current transactions (a deficit of EUR 83.8 m in July 2009) was mainly impacted by a change in the balance of goods and services trade. Besides a modest surplus in trade in goods (in July 2009, a deficit), there was also in increase in the surplus in services trade. The deficit in factor incomes also continues to narrow, while the surplus in current transfers widened once again in July. External trade again recorded a surplus in July. Trade in goods and services improved y-o-y. The deficit in merchandise trade (-EUR 48 m), which is otherwise typical for July, turned into a modest surplus this year. It was mainly influenced by the contraction of the deficit in trade with EU countries, as exports to Slovenia's main markets again increased faster in nominal terms than imports, while the surplus in trade with non-EU countries Figure 30: Components of the current account balance I Trade balance I Factor incomes -Current account I Services balance ■ Current transfers Source: BS; calculations by IMAD. declined for the fourth month in a row. The merchandise deficit totalled EUR 289.3 m in the first seven months of the year, compared with EUR 235.0 m in the same period last year. The surplus in the services balance narrowed in July, but increased y-o-y. The y-o-y increase was mainly due to a higher surplus in trade in travel services. The surplus in trade in road and rail transport services was also somewhat higher, while the deficit in the group of other services was smaller, largely as a result of the surplus in trade in miscellaneous business, professional Table 6: Balance of payments I-VII 10, EUR m Inflows Outflows Balance1 Balance, I-VII 09 Current account 14,081.5 14,187.5 -106.0 -323.9 - Trade balance (FOB) 10,538.5 10,827.8 -289.3 -235.0 - Services 2,462.2 1,858.5 603.7 609.4 - Income 496.8 855.5 -358.7 -525.5 Current transfers 583.9 645.6 -61.7 -172.9 Capital and financial account 3,735.2 -3,250.5 484.7 21.9 - Capital account 179.9 -140.5 39.4 33.9 - Capital transfers 178.8 -138.7 40.2 39.1 - Non-produced, non-financial assets 1.0 -1.8 -0.8 -5.2 - Financial account 3,555.3 -3,110.0 445.3 -12.0 - Direct investment 170.1 -82.7 87.5 -451.6 - Portfolio investment 2,272.7 -560.3 1,712.4 2,889.0 - Financial derivates -57.0 -0.7 -57.6 -13.9 - Other investment 1,161.4 -2,466.4 -1,305.0 -2,542.4 - Assets 833.0 -456.1 376.8 -70.4 - Liabilities 328.5 -2,010.3 -1,681.8 -2,472.0 - Reserve assets 8.0 0.0 8.0 106.8 Net errors and omissions 0.0 -378.7 -378.7 302.0 Sources: 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.. and technical services (in July 2009, a deficit). The surplus in the services balance rose to EUR 603.7 m in the first seven months of this year, which is EUR 5.7 m less than in the same period last year. The deficit in the balance of factor incomes is still declining as a result of lower net outflows of investment income, while the surplus in current transfers increased again in July. With low interest rates and due to the restructuring of external liabilities, net interest payments to the rest of the world remained lower y-o-y in July. The net inflow of income from labour increased, mainly as a consequence of lower expenditure on the compensation of foreign workers employed in Slovenian companies. The surplus in the balance of current transfers was again largely a consequence of the net budgetary surplus of the state budget against the EU budget. Financial transactions recorded a net inflow of EUR 93.1 m in July (EUR 159.2 m in July 2009). The net capital inflow of the private sector exceeded the net capital outflows of the BS and the general government. The net capital inflow of the private sector was largely impacted by other investments. The rest of the world repaid to domestic commercial banks EUR 294.3 m of short-term loans. Domestic commercial banks withdrew short-term deposits from their accounts abroad (EUR 459.3 m), partly in order to repay foreign loans, but also to finance modest domestic lending activity. After the issue of two long-term bonds in the first quarter of this year, net capital flows of the government sector were weak again in July (-EUR 1.5 m). The BS lowered its liabilities to the TARGET2 position, mainly as a consequence of the settlement of Eurosystem's monetary policy operations. Net external debt totalled EUR 11.4 bn at the end of July (31.8% of estimated GDP), up EUR 715 m from the end of 2009. At the end of July, Slovenia's gross external debt Figure 31: Financial transactions of the balance of payments by sector 200 150 100 50 0 -50 I Trade balance I Factor incomes -Current account I Services balance ■ Current transfers totalled EUR 41.4 bn, EUR 1,083 m more than in December 2009. Gross external claims in debt instruments also increased, totalling EUR 30.0 bn at the end of July, which is EUR 368 m more than in December 2009. Financial markets After easing significantly in July, lending activity was also relatively low in August. This was a result of significant corporate and NFI net repayments of loans, amid the persisting tight liquidity conditions, while household and government borrowing was higher than in the first eight months as a whole. Domestic banks recorded net lending of EUR 934.0 m in the first eight months, 17.3% more than in the same period of last year. Regarding the sources of finance, banks continued to make net repayments of liabilities, while government and household deposits recorded net inflows in August. Figure 32: Net flows and growth of domestic bank loans to domestic non-banking sectors Households (left axis) Enterprises&NFI (left axis) ^^■Government (left axis) -----Households (right axis) - Enterprises&NFI (right axis) -Total (right axis) 600 30 25 20 15 (D 10 5 0 -5 -10 Source: BS; calculations by IMAD. After July's decline, the volume of loans to non-banking sectors in the euro area remained almost unchanged in August. As in Slovenia, net flows were recorded only by households and the government, while enterprises and NFIs net repaid their loans. Lending activity is still much higher than last year, even though it was moderate in the summer months. Total net flows of loans in the euro area thus amounted to EUR 247.0 bn in the first eight months of the year, while in the same period of last year, nonbanking sectors repaid their loans in a net amount of EUR 32.7 bn. Household borrowing in Slovenia strengthened once again in August. Unlike in previous months, positive net flows were also recorded by consumer loans and loans for other purposes. The latter recorded the highest value in the last Table 7: Financial market indicators Domestic bank loans to nonbanking sector and household savings Nominal amounts, EUR bn Nominal loan growth, % 31. XII 09 31. VIII 10 31. VIII 10/ 31. VII 10 31. VIII 10/ 31. XII 09 31. VIII 10/ 31. VIII 09 Loans total 32,444.95 33,378.93 0.2 2.9 3.2 Enterprises and NFI 23,161.09 23,312.39 -0.9 0.7 -0.6 Government 870.95 1,004.66 15.4 15.4 33.0 Households 8,412.91 9,061.88 1.6 7.7 11.4 Consumer credits 2,899.95 2,821.13 0.3 -2.7 -1.9 Lending for house purchase 3,927.13 4,633.89 2.1 18.0 25.5 Other lending 1,585.84 1,606.86 2.5 1.3 2.7 Bank deposits total 14,313.07 14,721.63 0.1 2.9 4.2 Overnight deposits 5,655.00 6,170.34 0.4 9.1 9.6 Short-term deposits 5,116.28 4,603.93 -1.2 -10.0 -15.0 Long-term deposits 2,874.95 3,934.24 1.1 36.8 54.7 Deposits redeemable at notice 666.84 13.11 -5.0 -98.0 -97.6 Mutual funds 1,856.30 1,928.27 -1.0 3.9 10.2 Sources: Monthly Bulletin of the BS, SMA (Securities Market Agency); calculations by IMAD. twelve months (EUR 39.1 m), which is also attributable to seasonal impacts, given the usual increase in household overdrafts in August (holidays, the beginning of the school year). More than two thirds of August's net flows (EUR 144.0 m) nevertheless came from housing loans again. Net flows of household loans thus recorded as much as EUR 649.0 m in the first eight months of the year, which is by a factor of 2.1 more than in the comparable period of 2009. Bank loans to enterprises and NFIs (at home and abroad) remain fairly limited. While enterprises and NFIs net repaid domestic loans only once in the first seven months of this year, net repayments in August were by far the highest to date (EUR 211.6 m) and reduced the net inflows of the first seven months by more than one half. In August, the Figure 33: Net corporate and NFI borrowing abroad and differences in interest rates ^^ Loans (left axis) -Difference between domestic and foreign interest rates (right axis) 200 150 100 50 lmi 0 -50 -100 -150 -200 340 310 280 250 220 190 160 130 100 bulk of these net outflows (95%) came from enterprises, after these recorded relatively solid net inflows of domestic bank loans in previous months. Enterprises and NFIs borrowed a net EUR 151.3 m from domestic banks in the first eight months of 2010, nearly one half less than in the comparable period last year. Financing abroad is lower this year. In July, enterprises and NFIs made net repayments of foreign loans for the sixth month in a row. July's net repayments (EUR 24.8 m) were much lower than in the previous month and their maturity structure was fairly balanced. In the first seven months of this year, enterprises and NFIs net repaid EUR 278.4 m of foreign loans, while they net borrowed EUR 224.1 m in the same period last year. Total net flows of domestic and foreign loans amounted to EUR 84.5 m in the first seven months of the year, only just above 15% of the value recorded in the same period last year. Even though it declined in August, the difference between domestic and foreign interest rates remains high. Interest rates for corporate loans over EUR 1 m with a variable interest rate, or up to one year with a fixed interest rate, were 244 basis points higher than, on average, in the euro area. In July, banks recorded a net inflow of foreign sources again, EUR 268.5 m. This is largely a result of net repayment of foreign deposits in the amount of EUR 265.0 m, while net repayment of loans was much more modest amid net borrowing in the form of long term loans (EUR 57.7 m). In the first seven months of this year, banks net repaid EUR 1.1 bn of foreign deposits and loans, which is less than half of the value recorded in the same period last year. The quality of bank assets continued to deteriorate gradually in August. Banks created additional impairments and provisions in August, in the amount of EUR 40.9 m, which is somewhat less than in the previous two months. In the first eight months of the year, banks created over 50% more impairments and provisions (EUR 373.4 m) than Box 4: Results of the BS survey on demand for loans by non-financial institutions by activity 12008 1 2009 IQ1 2010 The share of excess demand, which dropped last year, Figure 34: Share of excess demand for loans by non-strengthened to 20.3% in the first quarter of this year.1 The financial institutions in the Slovenian banking system demand for loans also shrank this year, but the volume of 45 lending decreased even more, which is not so much a result of the deteriorating quality of banks' total assets as limited sources of finance. Specifically, the share of non-performing loans strengthened by a solid fifth in the first half of this year, reaching 2.7%. Banks therefore strengthened the creation of impairments and provisions by approximately one half, which contributed to a significant deterioration of their business results and additionally limited funds available for loans. 40 35 30 In the first quarter of this year, the greatest share of excess demand (which had already been high since 2008)2 was recorded by predominantly foreign-owned banks. It was more than half higher than, on average, in the Slovenian banking sector. A significant strengthening was also recorded by large domestic banks. This great share of excess demand for loans in predominantly foreign-owned banks may be due to several reasons, such as that banks may have changed their business policies and reduced lending to enterprises and expanded lending to households. Another reason may be that foreign banks used to be an important source of financing for small and medium-sized enterprises, and it is precisely these enterprises that saw the greatest decrease in the availability of funding during the crises. The significant differences between domestic-and foreign-owned banks may also derive from higher exposure of domestic banks to sectors that were most severely affected by the crisis, given that they continue to provide funds for these sectors to soften their liquidity problems. Large domestic Small domestic Predominantly Banks, total banks banks foreign-owned banks Source: BS. There are also significant differences in excess demand in the structure by purpose and between individual activities. In the first quarter of 2010, more than 70% of total excess demand was on the side of investment loans (in 2009, more than 60%), while the share of excess demand for working capital loans was 18.2%, just below last year's level. Given that more than 70% of new loans were extended for current operations, we estimate that bank loans were mainly used to mitigate liquidity problems of enterprises, while the volume of investment loans was extremely low. In the first quarter of this year, excess demand was greatest in public services, in electricity, gas and water supply and remediation activities, transport Figure 35: Excess demand for loans by activity Figure 36: Reasons for loan denial Total ■ ■ w 11 ■ i 70 60 50 40 I Inadequate insurance I Unpromising project I Poor rating I Other Source: BS. Banks, total Large domestic Small domestic Predominantly banks banks foreign-owned banks Source: BS. 1 The Bank of Slovenia points out that no firm conclusions can be drawn from the survey, given that it covers a short time period and has only been conducted once. 2 The first year for which data are available. 20 30 20 10 0 and storage and financial intermediation. In the construction sector, excess demand was relatively low, 18.7%, which is below average and even 0.6 p.p. less than in 2009, while in most other activities, the share of excess demand increased.3 The reasons for loan denial remain unclear, as nearly 60% of banks cited "other reasons" in the survey. Among the possible answers banks were inadequate insurance (11.6%), unpromising project (13.8%) and poor rating of the client (15.4%). Foreign banks mainly cited "Other reasons" (nearly 70%), while large domestic banks gave more specific answers, with inadequate insurance being the main reason for the denial (close to 40%). 3 Except for professional and other business activities, where the share of excess demand (8.9%) dropped by as much as 15.0 p.p. from last year. Figure 37: Net bank borrowing abroad Deposits «Short-term «Long-term 600 Source: BS. in the comparable period last year. The deterioration in the Slovenian banking system is also indicated by lower ratings given to three Slovenian banks. The main reasons for the lowering is deteriorated lending capacity and worse financial results, given that some of the banks have Figure 38: Creation of additional impairments and provisions in Slovenia's banking system low capital adequacy ratios, which weakens their ratings and increases the costs of raising fresh capital. This is, however, also reflected in higher interest rates for loans to non-banking sectors. After July's net outflows, household and government deposits recorded net inflows in August. The increase in household bank deposits was otherwise more modest, with net inflows amounting to EUR 13.0 m, which is a solid quarter of this year's monthly average. Household short-term deposits continued to decline, while net inflows of long-term deposits slowed for the second month in a row, recording the lowest value this year (EUR 42.9 m), which may suggest that banks will have to seek other long-term sources in the time to come. Net inflows of household bank deposits thus totalled EUR 408.6 m in the first eight months, down 6.5 % from the same period last year. Government deposits recorded net inflows of EUR 171.9 m in August. Short-term deposits strengthened, in particular, accounting for two thirds of total net inflows, as did, albeit to a lesser extent, long-term deposits. Despite these inflows, government deposits recorded a net outflow of EUR 404.6 m in the first eight months of this year. Figure 39: Net inflows of household deposits in banks and mutual funds, and y-o-y change in stock Mutual funds (left axis) Other deposits (left axis) Long-term time deposits (left axis) -Deposits, total (right axis) -----Long-term time deposits (right axis) -----Mutual funds (right axis) Public finance According to data on paid taxes and social security contributions,13 payments increased by 4.1% in August after July's decline (-6.0%). The August increase is mainly due to significantly higher inflows from personal income tax, which were much lower in July due to tax refunds based on final personal income tax assessments for 2009, while in August, taxpayers repaid the difference between prepayments and the final value of personal income tax due (EUR 9 m). Prepayments of tax on income from employment declined for the second consecutive month (-5.4%), as did other personal income tax revenues, particularly taxes on income from entrepreneurial profits and income from property. Revenue from social security contributions also declined slightly (-1.1%). After a significant increase in revenue from excise duties14 in July (18.6%) due to higher excise duties on beer, intermediate beverages and alcohol, and at the end of the month, on tobacco and tobacco products, revenue from excise duties dropped again in August (-1.2%). Based on tax assessments in July, revenue from value added tax (VAT) also fell significantly in August (-18.9%). Prepayments of corporate income tax also declined (-4.7%) and were 26% below the comparable last year's figure. Box5: Sovereign risk premium* The crisis has brought a shift in market perception as regards the risk embedded in sovereign debt instruments. Before the crisis in 2008, government debt spreads of euro area members with respect to that of Germany (the reference country) were tied together without significant differences among them. They reflected primarily liquidity risk and to a lesser extent credit risk. To some extent, the issue at that time was the degree to which markets enforced fiscal discipline on governments. In the post-crisis period this is different. While sovereign yield spreads still reflect global risks and a risk aversion attitude of the markets, empirical evidence tends to indicate that fiscal variables (government deficit and debt) have got more preeminence in explaining yield behaviour. In the post-crisis period, government bond yields do not only exhibit differentiation among countries but bid ask spreads are quite wide and volatile, reflecting market perception of risk. We have also observed a strong pass-through of government risk spreads into the debt spreads of domestic banks in those countries where the government spread has widened significantly. The differentiation of government debt spreads and their volatility and consequences for cost of funds in different euro area members imply a shift of market attitude towards fiscal discipline. This provides an additional incentive for governments to consolidate public finances and for designing respective consolidation strategies. Figure 40: Correlation between yield spreads of 10-year bonds and general government balances in euro area members .iü 3 ■Ö C o .Q 2 E ♦ EL ♦ 2010 R^ = 0.3599 ■ 2007 ♦ PT ♦ E^ ♦ IT siX^e LU R' = 0.1083 ■ " . ■ NL NL^ M ■-■ \ -12 -9 -6-3 0 3 General government balance (in % of GDP) Figure 41: Correlation between yield spreads of 10-year government bonds and general government debts in euro area members ■iü 4 0 ♦ 2010 ■ 2007 ♦ EL R' = 0.3321 ♦ ♦ PT S\ ^ ^^ be \T ♦ R' = 0.0299 0 20 40 60 80 100 120 140 General government debt (in % of GDP) * Source: Caprirolo G. "Challenges of ensuring fiscal discipline: The role of fiscal regulators and financial markets', 6th meeting, http://www.oecd.org/docum ent/16/0,3343,en_2649_34119_37587344_1_1_1_1,00.html. Barrios S., Iversen P., Lewandowska M., and Setzer R., (2009) Determinants of intra-euro area government bond spreads during the financial crisis. Economic Papers 388. 13 Based on the Report on Payments of All Public Revenues, January-August 2010, Public Payments Administration. 14 The figure for excise duties is corrected for the timing of excise duty payments. 5 6 4 3 2 0 6 Box 6: Main aggregates of the general government sector (ESA 95) According to SORS data, the general government deficit in 2009 is estimated at 5.8% of GDP. It increased by 4.0 p.p. of GDP relative to 2008, when it accounted for 1.8% of GDP. In 2009, the general government deficit was mainly generated by the central government (4.8% of GDP), which accounted for most of the deficit increase compared with a year earlier (by 3.6 p.p. of GDP). Local government contributed 0.6% of GDP to the general government deficit, which is the same figure as in the previous year, and social security funds 0.4% of GDP (they were balanced in 2009). Even though revenue declined, the share of total general government revenue increased by 0.9 p.p. of GDP,1 amid an even faster decline of GDP, while the share of total government expenditure increased by 4.9 p.p. of GDP due to rapid expenditure growth. The fiscal imbalance, which had already started to increase in the last quarter of 2008, deepened significantly in the first half of 2009, when the general government deficit climbed to 6.6% of GDP. General government revenue declined amid the deteriorated macroeconomic environment and under the influence of previous years' changes in tax legislation. Current government spending, however, remained high, under the impact of automatic stabilisers, the implementation of wage reform and anti-crisis measures. The fiscal imbalance diminished somewhat in the second half of the year as a whole (-5.1% of GDP), when growth in general government expenditure eased. General government revenue in 2009 is estimated at EUR 15.3 bn, down 3.2% in nominal terms from the previous year. General government revenue from assessed taxes and contributions declined more notably (-3.8%) than total general government revenue. To a certain extent, the decline in general government revenue was offset by non-tax revenues from capital and other current transfers, and revenues from market output and output for own final use, which were as much as 28% higher than a year earlier. Among the main tax revenues, only revenue from social security contributions increased (1.2%), while revenues from assessed taxes were 6.9% lower. Taxes on production and imports declined by 4.4%, while the assessed VAT was 5.4% lower due to the decline in economic activity; the payroll tax was abolished. Only revenue from excise duties was higher, as a result of excise duty rises. Current taxes on income and property dropped by 11.0%, particularly the assessed corporate income tax (-30.2%), but also revenues from personal income tax (-4.1%). Tax revenues declined significantly after the final assessment of corporate income tax for 2008, which was, in addition to poorer business results, also attributable to legislative changes that reduced the tax rate and expanded tax relief. In addition to a lower tax base, the assessed value of personal income tax also declined due to higher tax relief in low-income brackets. General government expenditure in 2009 is estimated at EUR 17.3 bn, up 5.4% from the previous year. Growth in general government expenditure mainly came from expenditure on social benefits in kind and in cash (2.9 p.p.), largely under the impact of automatic stabilisers with increasing expenditure on unemployment benefits and a higher number of people eligible for other social transfers. As a result of wage reform and a higher number of public sector employees, as much as 1.7 p.p. of expenditure growth also came from the increase of the compensation of employees. Due to the implementation of anti-crisis measures, a sizeable contribution to growth also came from expenditure on subsidies (0.4 p.p.), in addition to interest payments (0.5 p.p.), which are rising amid growing general government borrowing, and expenditure on intermediate consumption (0.4 p.p.). Growth in general government expenditure was reduced by capital transfers and gross capital formation and acquisitions, by 0.3 p.p. General government borrowing increased significantly in 2009 due to the widening general government deficit and further government borrowing in an effort to mitigate the consequences of the financial and economic crisis. General government debt as a share of GDP declined between 2002 and 2008, while in 2009, it increased from 22.5% of GDP to 35.4% of GDP, i.e. by EUR 4.1 bn. Even though it was still among the lowest in the EU in 2009, its increase relative to GDP was much greater than on average in the euro area. Table 8: General government revenue, expenditure and deficit, in% of GDP 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Total general government revenue 43.0 43.6 43.9 43.7 43.6 43.8 43.2 42.4 42.3 43.2 Total general government expenditure 46.7 47.6 46.3 46.4 45.8 45.2 44.5 42.4 44.1 49.0 Deficit (-) surplus (+) -3.7 -4.0 -2.5 -2.7 -2.2 -1.4 -1.3 0.0 -1.8 -5.8 Of which: Central government -3.2 -3.7 -2.1 -2.5 -2.1 -2.2 -1.3 -0.1 -1.2 -4.8 Local government 0.0 0.0 -0.2 -0.1 -0.1 0.0 -0.1 -0.1 -0.6 -0.6 Social security funds -0.5 -0.2 -0.1 -0.1 -0.1 0.8 0.1 0.2 0.0 -0.4 Consolidated government debt 26.8 27.4 28.1 27.5 27.2 27.0 26.7 23.4 22.5 35.4 Source: SORS, Main aggregates of the general government, 30. 9. 2010. In addition to the levels of aggregates, the shares of aggregates in GDP were also affected by the shrinkage of GDP in 2009. In the first eight months of 2010, revenue from taxes and social security contributions dropped by 2.5% relative to the same period last year, with payments amounting to EUR 8.4 bn. Only revenues from VAT and social security contributions increased y-o-y in the first eight months, while revenues from all other taxes and contributions declined. Inflows of VAT rose by 3.1% in this period. At the beginning of the year, VAT inflows shrank due to shortened deadlines for tax refunds, but the recorded growth is due to the effect of a very low base, as VAT inflows dropped most notably due to lower economic activity in the comparable period of last year. Cumulative y-o-y growth in revenue from social security contributions had been slowing from month to month at the end of last year, turning into a decline in January, which lasted until May 2010. Since June, revenue from contributions has been growing again, albeit very slowly, and was 0.6% higher y-o-y in the first eight months as a whole. After a long period of growth, revenue from excise duties was lower y-o-y in August for the sixth consecutive month (1.5% y-o-y in the first eight months as a whole). Excise duties are otherwise generated at higher rates than in the same period last year, but the quantity of excise goods sold is significantly lower. In the first eight months of this year, the largest y-o-y decline was recorded for revenue from corporate income tax (-44.7%). Revenue declined as a result of refunds based on tax assessments taking into account business results for 2009, tax relief and a lower tax rate. The new monthly prepayments are therefore also much lower than last year: they were determined according to business results for 2009, but tax payers are also able to request a reduction on the basis of deteriorated business performance in the current year; in addition, the statutory tax rate is also 1 percentage point lower (20.0%). Revenue from personal income tax declined 5.4% y-o-y in the first eight months: revenue from tax on income from employment was slightly higher (0.2%), but there was a significant drop in revenues from other personal income tax sub-categories (18.2%), particularly from taxes on Figure 42: Taxes and social security contributions -Taxes on income and profit -Social security contributions ■ Domestic taxes on goods and services income from entrepreneurial profits and income from capital gains. Revenue from personal income tax based on final personal income tax assessments also increased y-o-y in the first eight months. Slovenia received EUR 37.9 m from the EU budget in August, almost 40% less than in July, but its net budgetary position was nevertheless positive. Slovenia paid EUR 31.6 m into the EU budget, which is approximately the same amount as in July. Its positive net budgetary position declined from July's EUR 30 m to EUR 6 m in August. In August, the bulk of receipts came from Structural Funds (EUR 25.6 m), of which the majority from the European Fund for Regional Development (EUR 19.7 m). The absorption under the implementation of the Common Agricultural and Fisheries Policies was much lower, declining from EUR 41 m in July to EUR 10 m in August. In the first eight months, Slovenia received EUR 324.9 m from the EU budget, 31.3% of what is planned in the supplementary budget for 2010. The bulk of refunds were intended for the implementation of the Common Agricultural and Fisheries Policies (61.2%); somewhat fewer funds were received for the Structural Policy (25.2%) and the fewest for the Cohesion Policy (7.1%). In the same period, Slovenia paid EUR 281.0 m into the EU budget, which is 68.0% of all funds it is expected to pay this year. Slovenia's net budgetary position against the EU budget was thus positive in the first eight months (EUR 44 m). Figure 43: Planned and absorbed EU funds - Taxes on income and profit - Social security contributions ■ Domestic taxes on goods and services Source: Public Payments Administration. M %J a o ■o 01 u 31 0! WEF Global Competitiveness Report 2010-2011 The global competitiveness report of the World Economic Forum (WEF) for this year shows that Slovenia's position deteriorated. This year's report covers 139 countries, comparing them in terms of 111 indicators divided in three main competitiveness categories.15 Switzerland remains at the top of the scale, followed by Sweden and Singapore. Among the top ten countries, five are from the EU. Slovenia slipped by 8 places, from 37'h to 45'h out of all countries analysed. In addition to the IMD competitiveness report,16 this is yet another report according to which Slovenia's competitive position deteriorated this year. In contrast to last year, when Slovenia's improvement on the WEF scale had largely resulted from lower scores given to other countries, Slovenia this year also fell in terms of indicator values. Slovenian managers seem particularly dissatisfied with the current situation and the possibilities of doing business in Slovenia, as well as with the performance of the government over the past year. The main barriers to business operations are limited access to financing (cited by 17.4% of respondents participating in the survey), inefficient government bureaucracy (14.5%) and restrictive labour regulations (14.4%). More than 13% of respondents also said that business in Slovenia was impeded by complicated tax regulations and high tax rates. Slovenia slipped in all three categories of competiveness factors, most notably in the category of efficiency enhancers (by9places). Its ranking also fell significantly as regards the extent and effect of taxation, meaning that the tax policy is even more limiting to business operations than last year, which can be partly attributed to the excise duty policy. In the past year, the crisis also deteriorated the stability of Slovenia's banking sector, which managers don't find supportive to business operations. This is reflected in a significant decline in terms of bank soundness (33 places, to 110'h) and access to financing (ease of access to loans, financing through local equity market and venture capital availability). Higher education and training have been Slovenia's comparative advantage for a number of years, but the surveys nevertheless reflect considerable dissatisfaction with the quality of the educational system. Also this year, the labour market is not conducive to business operations, according to the survey, which is why Slovenia is ranked lowest with regard to certain 15 Altogether 111 indicators were used in the survey this year, 93 of which were soft indicators (surveys among managers), while the others were statistical data for 2009 (or the most recent available), which means that the number of scores and rankings largely depend on surveys. The survey of managers was conducted between January and May this year. The indicators are grouped in 12 key pillars of competitiveness divided in three categories. The first category, basic requirements, includes institutions, infrastructure, macroeconomic environment, and health and primary education. Efficiency enhancers are indicators including higher education and training, goods and labour market efficiency, financial market development, technological readiness and market size, while the third category consists of innovation and business sophistication factors. 16 See SEM, May 2010, pp. 31-32. labour market indicators. Among the most problematic factors, managers cited hiring and firing practices (132nd place), rigidity of employment, particularly employment for an indefinite period of time (125'h place), and a lack in the flexibility of wage determination (117'h place). They also think that the government failed to take sufficient labour market measures in the last year and would like to see more cooperation between social partners. Last year's above-average deterioration in productivity compared with EU countries was due to a higher drop in economic activity, but was, according to the WEF, also partly a consequence of a greater rigidity in the labour market, which was reflected in a strong deterioration of Slovenia's position in terms of the productivity/wage ratio. The drop in the ranking in the basic requirements category was largely impacted by dissatisfaction in institutions, with public trust in politicians and in the efficiency of the judicial system dropping the most. The answers were also impacted by an increase in bankruptcies and in compulsory settlement procedures in Slovenia, as managers cited inefficiency of corporate boards and poor protection of minority shareholders' interests among the main limiting factors for competitiveness. Slovenia's position deteriorated significantly in terms of both indicators over the last year. Slovenia was thus ranked in the bottom third of all countries included in the analysis, which was also related to the unfavourable ownership structure of Slovenia's economy and unethical behaviour of firms. Slovenia also slipped according to the indicators of public Figure 44: Comparison between rankings in Slovenia and innovation-driven economies17 - Slovenia Innovation-dri en economies (top 10 countries) Institutions nfrastruct ophistica tic Market size Techno gical Health and primary^ Higher educat,tri ining Labour market efficiency ■ds market efficiency 17 The innovation-driven economies according to the WEF are those, which have GDP per capita higher than USD 17,000 and at the same time a low share of exports of mineral products in overall exports. According to the WEF, 32 countries meet these criteria (also Slovenia). Figure 44 presents the ten most propulsive and successful countries in terms of innovation (with regard to the WEF rankings in innovation and business sophistication factors, these are Japan, Switzerland, Sweden, the US, Germany, Finland, Denmark, the Netherlands, Singapore and Israel). B m d Source: WEF spending (wastefulness of government spending) and the public finance situation. Slovenia's ranking also dropped in innovation and business sophistication factors in the last year. Slovenia made insufficient progress in this area over the last year, particularly regarding the structure and efficiency of R&D investment. According to the WEF, Slovenia's main shortfalls are insufficient cluster development, a lack of scientists and qualified engineers and insufficient support of technological innovations by public orders. In the area of innovation and research, positive shifts were made in R&D investment, innovation activities, the quality of research institutions and the number of patents. State aid and "de minimis" measures in 2009 State aid, as defined by the EU legislation, which also serves as the basis for data collection, does not include measures under the Common Agricultural policy of the EU and "de minimis" measures. From the economic perspective, this is difficult to understand and state aid is therefore often misinterpreted in practice. According to the EU definition, state aid constitutes expenditures and reduced revenues of the state or a municipality which favour the recipients, giving them an economic advantage over the competition; this part of the definition is consistent with the definition of industrial and competition policies and therefore also understandable from the theoretical viewpoint. However, what makes no economic sense is that these expenditures and reduced revenues of the state or a municipality, which otherwise provide the recipient with an economic advantage, are considered as state aid in so far as they affect trade between Member States. This prioritizes the single internal market of the EU over industrial and competition policy goals, removing from the state aid definition18 all measures under the Common Agricultural policy of the EU and "de minimis" measures,19 on the grounds that the Common Agricultural Policy is unified and does not damage the free competition between the Member States and that the level of "de minimis" aid measures is too small to impact the single internal market. However, the measures granted under the rules of the Common Agricultural Policy and "de minimis" can also affect competitiveness within a country and in border areas, and should, particularly in small markets, not be excluded from economic analyses. State aids had already increased significantly in2008, in some of the EU countries due to anti-crisis measures. In Slovenia, anti-crisis measures were not yet implemented that year. The value of state aid in the form of anti-crisis measures allocated primarily to the financial sector exceeded Table 9: State aid and "de minimis" measures in 20002009 Category 2007 2008 2009 State aids in EUR m 267.87 324.10 424,01 in % of GDP 0.77 0.87 1,22 "De minimis" measures in EUR m 24.80 28.65 84.87 in % of GDP 0.07 0.08 0.24 Source: MF, Twelfth Annual Survey on State Aid in Slovenia for 2007, 2008 and 2009 (2010). 1.7% of GDP in EU countries in 2008, with total state aid climbing to 2.2% of GDP. The EC approved the anti-crisis aid measures to Slovenia towards the end of 2008, but they were not yet implemented that year. The significantly smaller scope of state aid (0.87% of GDP) and its increase relative to 2007 was therefore mainly attributable to the doubled volume of state aid allocated for regional objectives, i.e. mainly assets from the European Structural Funds. State aid in Slovenia increased significantly more in 2009,20 reaching 1.22% of GDP, which is a result of their nominal growth and a concurrent decline in GDP. Growth in state aid in Slovenia in 2009 was also only partly marked by anti-crisis measures. State aid dedicated to development increased much more. To mitigate the consequences of the financial crisis and economic recession, Slovenia applied horizontal anti-crisis measures, such as aid allocated to remedy a serious disturbance in the economy, as well as the already implemented horizontal aid for employment, which was to a much greater extent than so far directed to preservation of jobs. There was not special sectoral aid for the financial sector,21 but financial intermediation services22 did receive 9.2% of all state aid (2008: 7.6%). State aid designed to remedy a serious disturbance in the economy and state aid for employment accounted for only 11.1% of total aid in 2009. Rather than with specific measures to address the crisis and the economic recession, Slovenia tried to solve the problems of the economy by the usual categories of horizontal aid. However, the state aid policy was much more development-oriented in 2009 than in previous years. In 2009, 16.3% of total state aid (2007: 11.0%, 2008: only 7.6%) was dedicated to research and development, small and medium-sized enterprises and training, i.e. state aid categories that were seen to have the greatest effect on the competitiveness of the economy. State aid for research and development increased the most among these three categories and what is also favourable is that as much as 82.7% of this aid was allocated for technological development. State aids for small and medium-sized enterprises and training were smaller than in previous years, because they were transferred to "de minimis" 18 State aid is defined in Article 107 of the Treaty on the Functioning of the European Union. 19 Measures not exceeding a ceiling of EUR 200,000 over a period of three years. 20 Data on state aids in the entire EU are not yet available. 21 Most Member States allocated state aid to the financial sector according to the relevant sectoral rules. 22 Calculated according to SCA 2002. Table 10: State aids and "de minimis" measures, by categories, 2000-2009, in EUR m Category State aids "De minimis" measures 2007 2008 2009 2007 2008 2009 Agriculture and fisheries 101.06 108.84 103.79 1.85 5.53 13.30 Agriculture 100.68 108.73 103.79 1.85 5.53 13.30 Fisheries 0.38 0.12 0.00 0.00 0.00 0.00 Horizontal objectives 104.39 154.19 251.37 22.95 23.13 71.58 Research and development 22.88 21.61 67.00 0.68 0.94 23.97 Environmental protection 18.90 26.14 28.02 0.02 0.49 0.71 SMEs 3.49 2.21 1.71 15.47 6.28 18.78 Employment 7.07 2.03 12.47 6.72 15.17 25.63 Training 3.37 0.75 0.28 0.00 0.01 2.39 Regional objectives 38.47 79.62 92.79 0.06 0.23 0.10 To remedy a serious disturbance in the economy 0.00 0.00 34.74 0.00 0.00 0.00 Culture 10.20 13.72 14.38 0.00 0.01 0.00 Natural disasters 0.00 8.11 0.00 0.00 0.00 0.00 Special sectors 62.43 61.07 68.85 0.00 0.00 0.00 Transport (road freight transport) 44.12 42.30 38.99 0.00 0.00 0.00 Transport (maritime transport) 0.00 0.00 10.39 0.00 0.00 0.00 Coal mining 17.20 17.46 16.44 0.00 0.00 0.00 Restructuring 0.56 1.30 1.57 0.00 0.00 0.00 Rescue 0.55 0.00 1.45 0.00 0.00 0.00 Total 267.87 324.10 424.01 24.80 28.65 84.87 measures. State aids for agriculture and special sectors in transport and coal mining continued their upward trends from previous years. State aid for agriculture is still the highest among all state aid categories and among the highest in the EU. As the agricultural sector also receives state aid under the Common Agricultural Policy and the "de minimis" measure, it is among the most subsidised sectors of the economy. However, appropriate analysis of the use of state aid and other measures in agriculture and their efficiency in terms of the objectives they pursue has yet to be made. The high state aid for railway transport in the category of state aid for the transport sector declined in 2009, while considerable state aid was for the first time allocated to maritime transport according to the tonnage tax scheme. Figure 45: State aid, 2007-2009, by selected categories, in EUR m Regional goals Agriculture 40 60 80 In EUR million Source: MF; calculations by IMAD. 100 Figure 46: "De minimis" measures, 2007-2009, by selected categories, in EUR m Agriculture SMEs R&D Employment 5 10 15 20 25 30 In EUR million Source: MF; calculations by IMAD. Source: MF. "De minimis" measures also increased significantly in 2009, accounting for as much as 20% of all state aids. Some of them also represented anti-crisis measures; looking at total "de minimis" measures, there was an increase in measures for research and development, small and medium-sized enterprises and training. These three categories accounted for more than half of all "de minimis" measures in 2009, which is much more than in 2008 (25.3%), but less than in 2007 (65.1%). Because of a relatively large fragmentation of state aids and as "de minimis" measures involve a smaller administrative burden, state aid is increasingly granted in the form of "de minimis" measures. improved somewhat again, which is indicated by data on significantly higher employment in this sector this year.23 The total volume of wild catch and aquaculture production increased last year for the first time after several years of decline. It amounted to 2,174.0 tonnes, up 8.4% from the year before when it was lowest in the whole analysed period, but down 9.0% from five years before and 27.7% from ten years before. As except for a short period in the second half of the last decade it is has been plummeting since Slovenia gained independence, given a number of maritime delimitation issues left unresolved, it is already gratifying that the negative trend did not continue last Fisheries The fisheries sector, which is otherwise small in Slovenia, recorded high value added growth in 2009. While value added plummeted in most activities last year, it rose to 20.7% in the fisheries sector after several years of a declining trend. Its share in total economic activity is otherwise fairly low and accounts for one hundredth of total value added of Slovenia's economy. This is easy to understand in marine catch, where the possibilities of development are fairly modest, but not so in aquaculture, given that Slovenia has relatively many high-quality freshwater sources and therefore ample possibilities for further aquaculture expansion. We would expect a better use of Slovenia's waters, particularly in view of increasing demand in line with the principles of good nutrition and with relatively high prices of fish and fish products, and partly also due to the economic crisis and lower employment in other sectors of the economy. However, the movements in the fisheries sector have Figure 47: Volume, structure and growth in catch and aquaculture production, 1990-2009 7,000 6,000 5,000 4,000 3,000 2,000 1,000 I Marine catch, left axis I Sea farming (mariculture), left axis I Freshwater farming, left axis - Freshwater farming, right axis - Sea farming (mariculture), right axis Marine catch, growth, right axis orN^vocoorN^voco 300 .fE Source: SORS;calculations by IMAD. Table 11: Catch and aquaculture production, 2005-2009 2005 2006 2007 2008 2009 Change, in % 2009/2008 2009/2004 Catch and aquaculture production, total, in tonnes 2,368.8 2,300.5 2,267.4 2,005.2 2,174.0 8.4 -9.0 Marine catch, in tonnes 1,021.6 933.4 913.7 686.5 866.6 26.2 6.2 Of which: fish 930.6 870.5 817.8 636.7 808.0 26.9 7.9 cephalopods 80.9 60.0 86.5 37.3 49.1 31.6 -14.5 crustaceans 5.5 2.7 8.0 6.4 4.3 -33.1 -35.4 shells and snails 4.7 0.2 1.5 6.1 5.3 -13.6 96.3 Aquaculture in tonnes 1,347.2 1,367.1 1,353.6 1,318.7 1,307.4 -0.9 -17.0 Of which: freshwater farming 1,120.2 1,174.3 1,037.6 1,044.3 930.7 -10.9 -28.2 coldwater fish 852.0 901.0 822.3 863.3 731.2 -15.3 -28.8 warmwater fish 268.3 273.3 215.3 181.0 199.5 10.2 -26.1 sea farming (mariculture) 227.0 192.9 316.1 274.5 376.7 37.2 35.9 marine fish 26.3 30.0 15.2 50.0 64.6 29.3 -42.8 molluscs 200.7 162.9 300.8 224.5 311.5 38.8 89.8 Source: SORS; calculations by IMAD. 23 According to the Statistical Register of Employment, employment in the fisheries sector increased by 16.0% in the first half of 2010 compared with the same period last year. 600 500 400 200 100 0 0 year. The increase in production volume is attributable to higher economic activity in sea waters, both in wild catch and fish farming. Freshwater farming, which has been on a declining trend ever since 2005, dropped below the level recorded ten years before. Farming thus accounted for 60.1% and wild catch for 39.9% in the structure of the total production. Marine catch increased after being extremely low in 2008, but was only slightly higher than five years before. A total of 867 tonnes of sea animals were caught, up 26.2% from the year before and 6.2% from 2004. Looking at the structure, sea fish account for by far the greatest share, while cephalopods, crustaceans and shells usually make up less than one tenth of the total quantity. Nearly 808 tonnes of fish were caught last year (with pilchards and anchovies representing the greatest share), close to 50 tonnes of cephalopods (mainly octopus), and crustaceans and shells (5 tonnes of each). Catch levels otherwise increasingly decline due to a gradual depletion of the sea, as the renewal of fish populations cannot keep pace with the level of fishing. The total catch of the EU countries has dropped by close to one third over the last decade. As Slovenian marine fishing is relatively modest, Slovenia is understandably ranked the last but one among the EU countries in this category, before Austria. Aquaculture also declined and was much lower than in 2004, a year with a fairly high level of aquaculture production. Some 1,307 tonnes of aquatic animals were farmed, in total, down 0.9% from the year before and 17.0% from five years before. Most of these animals were bred in fresh waters, where production volume declined by 10.9% and was already more than one quarter lower than five years before. Coldwater fish (rainbow trout) prevailed, while warmwater fish (carp) accounted only for one fifth in the total structure. Sea farming, which is relatively modest, though growing in the long-term, increased by as much as 37.2% compared with the year before and 35.9% compared with five years before. The share of sea farming in total aquaculture thus increased again, to a high of 28.8% (17.6% five years before, 8.5% ten years before). Some of this increase comes from marine fish (seabass) and the most from molluscs (mussel). The quantity of the latter is growing most notably: 38.8% in the year 2009 alone and nearly 90% over the last five years. In the decade preceding 2007 (the latest international data), Slovenia recorded higher growth in the total aquaculture production than the EU-27 average (4.2% in the EU, 47.7% in Slovenia). This was also a higher figure than in the neighbouring Italy and Austria, but lower than in Hungary and Croatia. This year, Slovenia will start absorbing funds from the European Fisheries Fund for the period until 2013 in line with the National Operational Programme for Fisheries Development. A total of EUR 28.9 m is foreseen for fisheries development in Slovenia in the period covered by the current financial perspective, with Slovenia contributing one quarter and the rest coming from the EU Fund. The Figure 48: Changes in the volume of total aquaculture production in the EU, Slovenia and the neighbouring countries 400 350 Source: Eurostat; calculations by IM AD. objectives of the programme are to ensure sustainable fisheries that will be in balance with the available fisheries resources, improve working conditions and safety of fishermen and to achieve a high level of competitiveness in the fishing and fish-processing industry. For the latter, it will first be necessary to modernise the existing and build new aquaculture facilities to increase the relatively low local supply of fish and fish products. If investment in aquaculture facilities proves successful, we can expect significantly higher economic activity in this sector in the coming years. X "O C o a a (U "5 u (U MAIN INDICATORS 2005 2006 2007 2008 2009 2010 2011 2012 Autumn forecast 2010 forecast forecast forecast GDP (real growth rates, in %) 4.5 5.9 6.9 3.7 -8.1 0.9 2.5 3.1 GDP in EUR million (current prices and current exchange rate) 28,750 31,055 34,568 37,305 35,384 35,792 37,227 39,033 GDP per capita, in EUR (current prices and current exchange rate) 14,369 15,467 17,123 18,450 17,331 17,575 18,240 19,087 GDP per capita (PPS)1 19,700 20,700 22,100 22,800 20,300 GDP per capita (PPS EU27=100)1 87 88 89 91 86 Gross national income (current prices and current fiksni exchange rate) 28,506 30,682 33,834 36,289 34,704 35,256 36,552 38,223 Gross national disposable income (current prices and current fiksni exchange rate) 28,362 30,467 33,607 35,914 34,448 35,220 36,525 38,183 Rate of registered unemployment 10.2 9.4 7.7 6.7 9.1 10.7 11.0 10.6 Standardised rate of unemployment (ILO) 6.5 6.0 4.9 4.4 5.9 7.2 7.1 6.9 Labour productivity (GDP per employee) 4.7 4.3 3.8 0.9 -6.4 3.2 2.9 3.0 Inflation,2 year average 2.5 2.5 3.6 5.7 0.9 2.1 2.7 2.2 Inflation,2 end of the year 2.3 2.8 5.6 2.1 1.8 2.8 2.2 2.3 INTERNATIONAL TRADE - BALANCE OF PAYMENTS STATISTICS Exports of goods and services3 (real growth rates, in %) 10.6 12.5 13.7 3.3 -17.7 7.0 5.9 7.0 Exports of goods 10.3 13.4 13.9 0.6 -18.1 8.7 5.9 7.2 Exports of services 12.0 8.6 13.2 16.2 -16.1 0.6 5.5 6.0 Imports of goods and services3 (real growth rates, in %) 6.6 12.2 16.7 3.8 -19.7 5.6 4.5 5.9 Imports of goods 6.8 12.7 16.2 3.1 -20.9 6.2 4.4 5.8 Imports of services 5.5 8.8 19.7 8.7 -12.3 2.8 5.6 6.6 Current account balance, in EUR million -498 -771 -1646 -2489 -526 -330 -386 -427 As a per cent share relative to GDP -1.7 -2.5 -4.8 -6.7 -1.5 -0.9 -1.0 -1.1 Gross external debt, in EUR million 20,496 24,067 34,752 38,997 40,008 41,3595- As a per cent share relative to GDP 71.3 77.5 100.5 104.5 113.1 Ratio of USD to EUR 1.244 1.254 1.371 1.471 1.393 1.310 1.294 1.294 DOMESTIC DEMAND - NATIONAL ACCOUNTS STATISTICS Private consumption (real growth rates, in %) 2.6 2.9 6.7 2.9 -0.8 -0.5 1.0 2.0 As a % of GDP4 54.2 52.8 52.7 53.0 55.4 55.6 55.5 55.1 Government consumption (real growth rates, in %) 3.4 4.0 0.7 6.2 3.0 0.7 -0.8 1.4 As a % of GDP4 19.0 18.8 17.3 18.1 20.3 20.4 19.7 19.5 Gross fixed capital formation (real growth rates, in %) 3.7 10.1 12.8 8.5 -21.6 -3.5 4.0 4.3 As a % of GDP4 25.5 26.5 27.7 28.8 23.9 23.0 23.3 23.7 Sources of data: SORS, BS, Eurostat-New Cronos (revised data, September 2010), estimate, calculations and forecasts by IMAD (Autumn Report, September 2010). Notes: 'Measured in purchasing power standard; ^Consumer price index; ^Balance of payments statistics (exports F.O.B., imports F.O.B.); real growth rates are adjusted for inter currency changes and changes in prices on foreign markets; 4Shares GDP are calculated for GDP in current prices at fixed exchange rate (EUR=239.64); 5end June 2010; PRODUCTION 2007 2008 2009 2008 2009 2010 2008 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 7 8 9 10 11 INDUSTRIAL PRODUCTION, y-o-y growth rates, % Industry B+C+D 7.2 2.5 -17.4 8.4 3.3 -7.7 -18.2 -24.6 -18.4 -7.1 -0.2 11.3 2.0 -2.0 9.3 0.5 -11.7 B Mining and quarrying 5.5 5.5 -2.9 3.5 7.1 -1.2 -6.7 -13.7 6.1 4.8 -8.2 14.1 34.4 -19.2 14.4 -1.0 -14.7 C Manufacturing 8.5 2.6 -18.7 8.7 3.7 -8.4 -20.0 -25.9 -19.5 -7.9 0.3 12.2 1.7 -1.2 9.8 0.8 -12.5 D Electricity, gas & steam supply1 -11.1 2.1 -6.6 8.2 -1.1 4.5 -3.1 -8.6 -9.7 -5.5 -2.8 -0.4 0.2 -5.5 1.9 1.0 4.7 CONSTRUCTION,2 real indices of construction put in place, y-o-y growth rates, % Construction, total 18.5 15.7 -21.0 17.0 15.7 4.2 -19.2 -19.0 -24.5 -20.5 -18.9 -16.8 15.9 8.6 22.4 15.1 -2.3 Buildings 14.3 11.5 -22.6 7.3 11.5 -2.0 -20.8 -21.8 -27.4 -19.6 -7.4 -12.4 0.2 10.7 24.2 12.0 -11.5 Civil engineering 21.9 18.9 -19.9 24.3 18.6 8.9 -17.6 -17.2 -22.6 -21.1 -29.3 -19.6 28.0 7.0 21.3 17.0 5.4 TRANSPORT, tonne-km in m, y-o-y growth rates, % Tonne-km in road transport 13.4 18.4 -9.2 23.5 7.7 17.2 -12.7 -7.6 -12.3 -4.7 19.8 Tonne-km in rail transport 6.8 -2.3 -24.2 -2.9 2.9 -3.6 -24.1 -26.0 -30.7 -15.9 18.8 33.9 Distributive trades, y-o-y growth rates, % Total real turnover* 9.7 10.1 -13.0 13.1 10.5 2.3 -10.1 -15.5 -16.0 -10.0 -1.4 5.1 12.6 5.8 12.8 2.8 1.0 Real turnover in retail trade 6.1 12.2 -10.6 15.5 12.7 7.2 -5.5 -11.3 -13.8 -11.1 -4.7 0.6 13.4 10.8 13.8 7.3 7.0 Real turnover in the sale and maintenance of motor vehicles 19.2 6.2 -21.7 9.6 5.6 -9.9 -24.0 -28.0 -23.6 -8.1 6.3 15.2 12.3 -7.4 10.6 -7.4 -12.5 Nominal turnover in wholesale trade & commission trade 16.1 17.1 -21.4 23.9 20.9 4.8 -16.4 -23.9 -26.7 -18.1 -7.8 3.7 22.9 11.2 28.0 11.6 2.1 TOURISM, y-o-y growth rates, %, new methodology from 2009 onwards Total, overnight stays 7.0 1.8 -3.4 1.0 1.8 0.6 -3.5 -4.6 -1.8 -5.3 -0.4 -2.4 3.6 3.2 -3.2 -2.1 -4.4 Domestic tourists, overnight stays 4.9 5.2 2.8 4.6 4.7 7.2 4.3 1.2 6.7 -4.0 1.3 -3.0 1.1 8.9 3.9 6.0 4.4 Foreign tourists, overnight stays 8.4 -0.5 -8.0 -1.3 0.1 -4.8 -10.6 -8.6 -7.1 -6.4 -2.1 -2.0 5.3 -0.2 -6.8 -7.4 -11.9 Nominal turnover in hotels and restaurants 9.7 6.7 -7.8 8.3 7.0 3.9 -3.9 -8.2 -8.0 -11.0 0.0 1.5 7.0 6.2 7.6 8.5 4.1 AGRICULTURE, y-o-y growth rates, % Purchase of agricultural products, SIT bn, since 2007 in EUR m 492.2 529.9 449.3 125.6 134.1 152.3 105.4 105.9 109.0 129.0 94.6 106.7 44.5 42.2 47.4 49.0 45.3 BUSSINES TENDENCY (indicator values**) Sentiment indicator 13 3 -23 10 7 -16 -31 -28 -18 -14 -12 -9 8 7 5 -5 -18 Confidence indicator - in manufacturing 11 -6 -24 2 -3 -27 -35 -27 -19 -13 -7 0 0 -3 -6 -20 -29 - in construction 19 2 -50 9 3 -21 -43 -50 -54 -51 -57 -59 5 2 1 -7 -21 - in services 29 26 -13 35 29 6 -18 -22 -11 -2 0 -4 29 33 26 18 6 - in retail trade 27 22 -13 28 25 8 -17 -17 -9 -7 -6 11 27 26 23 26 1 Consumer confidence indicator -11 -20 -30 -17 -16 -29 -39 -32 -23 -25 -25 -22 -18 -19 -12 -18 -34 Source of data: SORS. Notes: 1Only companies with activity of electricity supply are included. 2The survey covers all larger construction enterprises and some other enterprises that perform construction work. *Total real turnover in retail trade, the sale and repair of motor wehicles, and retail sale of automotive fuels; **Seasonally adjusted data. 2008 2009 2010 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 -13.2 -17.1 -21.5 -15.9 -29.8 -22.2 -21.6 -20.8 -17.5 -16.8 -19.6 -1.7 4.7 -8.7 -1.2 8.4 9.2 14.4 10.2 7.1 - - 18.8 -6.9 -3.8 -9.2 -21.7 -10.2 -7.9 4.5 13.3 1.8 -4.3 32.4 -14.8 -7.2 -18.0 0.2 10.7 20.9 10.6 16.5 - - -15.4 -18.9 -23.8 -17.3 -31.6 -23.6 -22.5 -22.1 -19.4 -17.2 -20.8 -2.6 5.2 -8.7 -0.5 9.2 10.4 15.2 11.1 7.7 7.5 -5.1 -1.3 -2.7 -9.5 -4.7 -11.3 -9.6 -7.3 -11.9 -5.6 -4.6 -6.3 -7.7 -2.0 1.9 -2.1 3.1 -2.2 -3.6 -3.6 -26.9 -22.7 -9.7 -20.4 -20.8 -15.9 -20.8 -19.5 -32.0 -28.3 -18.3 -9.5 -11.3 -24.2 -19.8 -17.9 -15.5 -17.2 -17.7 -6.9 -32.7 -17.3 -12.7 -18.0 -23.5 -23.4 -23.2 -26.8 -31.4 -28.2 -20.0 -7.4 -6.6 -10.2 -5.5 -13.7 -7.5 -15.8 -13.5 - - -0.6 -20.3 -27.5 -7.3 -22.0 -19.1 -10.7 -19.4 -14.1 -32.3 -28.4 -17.2 -11.3 -15.9 -38.5 -30.8 -20.6 -20.3 -18.0 -20.1 - - 3.1 -6.2 -15.5 -8.6 -16.7 -17.1 -12.6 -14.8 -15.1 -18.2 -13.0 -11.1 -5.9 -4.8 -3.7 4.2 3.3 4.4 7.5 2.7 7.1 2.3 -13.3 -5.2 -9.3 -14.9 -9.5 -11.5 -13.3 -16.7 -12.9 -13.5 -7.0 -8.4 -5.2 -0.5 -1.3 -0.7 3.8 2.4 1.9 - -10.1 -27.6 -24.5 -20.4 -34.7 -25.7 -23.1 -25.6 -20.6 -24.6 -16.0 -7.2 -1.2 5.2 -0.4 14.1 14.4 15.9 15.5 3.5 21.1 - 0.5 -16.9 -19.2 -13.2 -24.9 -25.3 -21.2 -27.5 -24.8 -27.6 -23.4 -19.0 -11.1 -10.8 -13.0 -0.8 -3.3 4.7 10.7 2.8 - - 8.7 2.7 -5.7 -7.0 2.4 -11.9 -2.7 -3.4 0.8 -3.9 -2.9 -7.2 -6.5 1.0 -2.1 0.1 -1.7 -3.0 -2.5 -1.7 -3.0 - 11.0 7.7 -1.0 8.9 3.3 -2.8 2.9 8.9 6.8 2.1 1.9 -5.1 -9.2 3.5 -0.1 1.1 2.1 -7.2 -3.3 -9.0 -11.0 - 6.5 -0.7 -12.2 -19.3 1.7 -17.4 -6.7 -11.7 -3.0 -7.3 -6.5 -9.3 -3.7 -0.9 -5.2 -1.0 -4.6 -0.1 -1.8 4.3 2.0 -0.6 -1.4 -6.7 -3.7 -6.1 -9.3 -9.2 -7.8 -5.9 -10.3 -11.2 -11.6 -10.3 0.6 -1.5 1.1 -1.4 2.4 3.6 5.6 58.1 32.9 32.6 39.9 36.3 35.5 34.1 35.9 33.8 39.2 43.4 38.4 47.2 29.7 28.6 36.4 35.5 36.0 35.1 37.4 - - -24 -31 -29 -33 -34 -25 -24 -21 -19 -13 -13 -15 -13 -10 -11 -15 -12 -8 -6 -5 -7 -7 -33 -37 -33 -34 -32 -27 -22 -23 -20 -14 -15 -13 -12 -6 -8 -6 -2 -1 2 6 1 1 -35 -39 -40 -49 -52 -46 -53 -49 -59 -55 -56 -47 -49 -55 -55 -61 -62 -57 -59 -60 -57 -52 -6 -14 -16 -24 -25 -21 -21 -14 -13 -7 0 -5 -1 6 3 -8 -6 -3 -2 -2 -4 -5 -3 -14 -16 -20 -16 -18 -18 -16 -6 -6 -7 -8 -6 -8 -6 -5 9 10 13 10 14 12 -35 -43 -37 -37 -41 -30 -24 -26 -27 -17 -26 -24 -26 -26 -24 -26 -24 -22 -21 -27 -28 -26 LABOUR MARKET 2007 2008 2009 2008 2009 2010 2008 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 7 8 9 10 FORMAL LABOUR FORCE (A=B+E) 925.3 942.5 944.5 940.9 942.2 949.2 945.9 945.6 942.6 943.9 935.8 937.8 941.4 940.5 944.6 950.7 PERSONS IN FORMAL EMPLOYMENT (B=C+D)' 854.0 879.3 858.2 879.4 881.7 885.1 869.0 861.0 854.3 848.4 836.3 839.2 879.9 879.8 885.3 888.1 In agriculture, forestry, fishing 40.4 39.7 37.9 39.9 39.2 38.9 37.8 38.0 37.9 37.8 31.9 34.6 39.3 39.2 39.2 38.9 In industry, construction 321.9 330.4 306.9 331.2 333.0 330.4 317.4 309.3 304.0 296.8 290.9 289.2 332.5 332.5 333.9 333.7 Of which: in manufacturing 223.6 222.4 199.8 224.0 222.3 219.1 209.5 201.4 196.7 191.7 190.0 189.4 222.7 222.2 222.2 221.3 in construction 78.4 87.9 86.8 87.1 90.5 91.1 87.8 87.6 86.9 84.8 80.9 79.6 89.7 90.2 91.6 92.2 In services 491.6 509.1 513.4 508.3 509.4 515.9 513.8 513.7 512.4 513.7 513.5 515.3 508.1 508.1 512.2 515.5 Of which: in public administration 50.3 51.0 51.5 51.0 51.1 51.0 51.1 51.5 51.7 51.6 51.8 52.3 50.9 51.0 51.2 51.1 in education, health-services, social work 108.8 111.1 113.8 111.0 110.1 112.4 113.2 114.1 113.3 114.7 115.9 116.8 109.7 109.4 111.4 112.0 FORMALLY EMPLOYED (C)1 766.0 789.9 767.4 790.3 792.7 795.3 779.7 770.8 762.9 756.1 750.1 751.0 791.1 790.9 796.1 798.5 In enterprises and organisations 696.1 717.6 699.4 718.0 719.8 722.0 709.9 701.9 695.5 690.5 687.2 688.7 718.5 718.2 722.6 724.6 By those self-employed 69.9 72.3 67.9 72.2 73.0 73.2 69.8 68.8 67.4 65.7 62.9 62.3 72.7 72.7 73.5 74.0 SELF-EMPLOYED AND FARMERS (D) 87.9 89.4 90.8 89.2 88.9 89.8 89.3 90.3 91.4 92.2 86.2 88.2 88.8 88.9 89.2 89.6 REGISTERED UNEMPLOYMENT (E) 71.3 63.2 86.4 61.4 60.5 64.1 76.9 84.6 88.3 95.6 99.4 98.6 61.6 60.7 59.3 62.6 Female 39.1 33.4 42.4 32.8 32.1 33.0 38.4 41.6 43.2 46.4 47.0 46.8 33.0 32.3 31.1 32.7 By age: under 26 11.9 9.1 13.3 8.4 7.7 10.0 12.2 13.1 12.8 15.2 14.7 13.5 8.1 7.8 7.3 9.8 aged over 50 22.2 21.9 26.2 21.9 21.7 21.6 24.1 25.6 26.9 28.3 29.6 30.3 21.9 21.7 21.4 21.4 Unskilled 28.0 25.4 34.1 24.6 24.3 25.8 31.2 33.6 34.8 36.6 38.2 37.1 24.3 24.3 24.3 24.9 For more than 1 year 36.5 32.3 31.5 32.5 31.9 31.0 31.0 30.4 31.1 33.4 38.1 41.8 32.1 31.8 31.6 31.4 Those receiving benefits 16.6 14.4 27.4 13.6 13.9 15.1 22.8 27.4 28.6 30.8 31.6 29.3 13.9 13.9 13.7 14.1 RATE OF REGISTERED UNEMPLOYMENT, E/A, in % 7.7 6.7 9.1 6.5 6.4 6.8 8.1 8.9 9.4 10.1 10.6 10.5 6.5 6.5 6.3 6.6 Male 6.2 5.6 8.3 5.4 5.4 5.8 7.3 8.1 8.5 9.3 10.1 9.9 5.4 5.4 5.3 5.6 Female 9.6 8.1 10.2 7.9 7.8 7.9 9.2 10.0 10.4 11.1 11.3 11.3 8.0 7.8 7.5 7.9 FLOWS OF FORMAL LABOUR FORCE 21.5 13.7 -5.2 4.2 1.9 1.9 -0.8 -0.1 -3.5 -0.8 -5.5 1.7 -1.3 -0.9 4.1 6.1 New unemployed first-job seekers 14.7 12.5 17.0 1.8 1.9 6.5 3.2 2.6 3.0 8.1 2.9 2.4 0.5 0.5 0.9 4.6 Redundancies 52.5 53.0 90.5 10.7 12.5 17.4 24.8 22.5 19.9 23.2 19.9 16.6 4.6 3.4 4.5 5.2 Registered unemployed who found employment 49.1 41.7 48.6 9.7 9.9 9.6 9.5 11.8 14.2 13.1 14.2 12.8 2.3 3.1 4.5 4.0 Other outflows from unemployment (net) 28.0 26.1 28.5 6.3 5.9 7.4 5.2 6.5 6.9 9.9 6.3 6.9 2.0 1.6 2.3 2.5 Increase in number of work permits for foreigners 10.0 13.2 -9.6 5.9 4.9 -1.2 -1.5 -1.8 -2.7 -3.6 -1.6 -1.0 1.6 2.2 1.1 1.2 Retirements2 20.7 22.6 24.7 4.8 6.3 6.1 5.4 5.3 6.7 7.3 6.8 6.0 1.6 2.2 2.6 2.3 Others who found employment2 40.9 31.5 34.7 6.2 5.9 8.8 6.9 9.5 8.2 10.1 4.8 11.6 -0.4 -0.2 6.6 4.6 REGISTERED VACANCIES3 20.2 20.0 13.4 21.1 21.5 15.9 13.4 13.4 14.0 13.0 12.6 14.8 19.8 20.1 24.7 19.7 For a fixed term, in % 76.5 74.5 78.1 74.0 76.5 74.7 74.9 77.9 80.8 78.6 78.9 81.2 76.9 76.8 76.0 74.9 WORK PERMITS FOR FOREIGNERS 60.2 81.1 86.6 79.0 86.3 90.5 91.5 90.2 84.9 79.7 77.1 75.7 83.8 86.7 88.6 90.3 As % of labour force 6.5 8.6 9.2 8.4 9.2 9.5 9.7 9.5 9.0 8.4 8.2 8.1 8.9 9.2 9.4 9.5 NEW JOBS 160.0 162.7 111.4 41.0 42.7 38.1 27.5 27.3 28.2 28.3 23.6 25.1 12.7 10.4 19.6 17.8 Sources of data: SORS, PDII, ESS. Notes: "In January 2005, the SORS adopted new methodology of obtaining data on persons in paid employment. The new source of data for employed and self-employed persons excluding farmers is the Statistical Register of Employment (SRE), while data on farmers are forecast using the ARIMA model based on quarterly figures for farmers from the Labour Force Survey. Data for previous years dating back to January 2000 have also been calculated according to the new methodology. ^Estimated by IMAD, based on data by PDII and ESS; ^according to ESS. 2008 2009 2010 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 950.3 946.5 946.2 945.9 945.7 946.1 945.3 945.6 944.1 941.6 942.1 945.0 945.5 941.3 935.7 935.8 935.8 938.6 937.3 937.5 934.3 886.9 880.3 872.2 868.7 866.0 863.2 860.8 859.1 855.6 853.5 853.8 850.4 850.0 844.7 836.1 836.0 836.9 839.3 838.9 839.3 835.9 38.9 38.8 37.8 37.8 37.8 38.0 38.0 38.0 37.9 37.9 37.9 37.9 37.8 37.7 31.9 31.9 31.9 34.6 34.6 34.7 34.1 331.5 325.9 320.1 317.4 314.7 311.8 309.1 307.1 305.3 303.9 302.8 298.8 297.6 294.0 291.5 290.6 290.7 289.9 289.2 288.6 287.9 219.8 216.3 211.8 209.6 207.0 203.6 201.2 199.2 197.8 196.5 195.9 192.5 192.1 190.6 190.0 189.9 190.0 189.7 189.4 189.0 188.5 91.5 89.5 88.3 87.7 87.5 87.8 87.5 87.5 87.2 86.9 86.5 86.0 85.2 83.3 81.5 80.7 80.5 80.1 79.5 79.3 79.1 516.5 515.6 514.4 513.6 513.5 513.5 513.7 514.0 512.4 511.7 513.1 513.7 514.6 512.9 512.6 513.5 514.4 514.7 515.1 516.1 514.0 51.1 50.8 51.2 51.0 51.3 51.4 51.5 51.6 51.7 51.7 51.8 51.6 51.7 51.6 51.6 51.8 52.0 52.3 52.3 52.4 52.2 112.5 112.6 112.8 113.2 113.7 114.0 114.2 114.1 113.0 112.6 114.2 114.6 114.9 114.7 115.4 115.9 116.4 116.7 116.8 116.9 115.8 797.0 790.2 783.0 779.5 776.6 773.3 770.5 768.5 764.5 762.1 762.1 758.3 757.7 752.4 749.7 749.8 750.9 750.9 750.8 751.3 748.1 723.4 718.1 712.6 709.7 707.3 704.3 701.7 699.8 696.5 694.6 695.2 691.8 691.8 687.8 686.4 686.9 688.3 688.5 688.6 689.1 686.3 73.5 72.2 70.4 69.7 69.3 69.0 68.8 68.7 68.0 67.5 66.8 66.5 65.9 64.6 63.3 62.8 62.7 62.4 62.2 62.1 61.8 89.9 90.0 89.2 89.3 89.5 90.0 90.3 90.6 91.1 91.4 91.7 92.1 92.3 92.2 86.4 86.3 86.0 88.4 88.0 88.1 87.8 63.4 66.2 73.9 77.2 79.7 82.8 84.5 86.5 88.5 88.1 88.4 94.6 95.4 96.7 99.6 99.8 98.9 99.3 98.4 98.2 98.4 32.6 33.7 37.2 38.5 39.5 40.8 41.5 42.5 43.5 43.2 43.0 46.3 46.5 46.5 47.2 47.0 46.6 47.0 46.7 46.8 47.5 9.9 10.2 11.7 12.3 12.7 13.2 13.1 13.0 13.0 13.0 12.2 15.5 15.1 14.8 15.0 14.7 14.3 14.1 13.4 13.0 12.6 21.5 21.9 23.6 24.1 24.5 25.1 25.7 26.1 26.6 26.8 27.1 27.8 28.3 28.7 29.5 29.7 29.7 30.1 30.3 30.5 30.9 25.5 27.0 30.1 31.4 32.2 33.0 33.5 34.2 34.7 34.7 35.0 36.1 36.4 37.2 38.3 38.4 37.9 37.6 37.1 36.7 36.4 30.9 30.8 31.2 31.0 30.7 30.4 30.3 30.5 30.7 31.0 31.7 32.5 33.3 34.4 36.9 37.9 39.4 40.6 41.8 42.9 43.2 14.4 16.8 20.9 22.8 24.5 25.9 27.6 28.7 28.9 28.5 28.3 30.8 30.3 31.2 32.2 31.7 30.9 29.9 29.2 28.9 29.0 6.7 7.0 7.8 8.2 8.4 8.8 8.9 9.1 9.4 9.4 9.4 10.0 10.1 10.3 10.6 10.7 10.6 10.6 10.5 10.5 10.5 5.7 6.1 6.9 7.3 7.6 7.9 8.1 8.3 8.5 8.5 8.6 9.1 9.3 9.6 10.0 10.1 10.0 10.0 9.9 9.8 9.8 7.9 8.1 9.0 9.3 9.5 9.8 10.0 10.2 10.5 10.4 10.4 11.1 11.2 11.2 11.4 11.3 11.2 11.3 11.2 11.3 11.5 -0.5 -3.8 -0.3 -0.2 -0.2 0.3 -0.7 0.3 -1.5 -2.5 0.6 2.9 0.4 -4.1 -5.7 0.2 0.0 2.8 -1.3 0.2 -3.2 1.2 0.8 1.2 1.0 1.1 1.1 0.8 0.8 0.8 0.7 1.5 5.9 1.3 0.9 1.0 0.8 1.0 0.9 0.7 0.8 0.7 5.5 6.6 10.4 6.9 7.5 8.2 7.4 7.0 7.3 5.5 7.2 8.5 7.9 6.8 8.6 5.4 5.8 5.7 5.5 5.4 6.1 3.2 2.4 3.2 2.7 3.6 3.7 4.3 3.9 4.0 4.6 5.5 4.4 4.8 3.9 5.0 4.0 5.1 3.9 4.7 4.2 4.8 2.7 2.2 0.7 1.9 2.5 2.4 2.2 1.9 2.1 1.9 2.8 3.8 3.6 2.5 1.7 2.0 2.6 2.4 2.4 2.1 1.8 -0.1 -2.4 -0.1 0.2 -1.7 -0.5 -1.2 -0.1 -1.0 -1.5 -0.2 -1.9 -1.3 -0.4 -0.7 -0.5 -0.4 -0.3 -0.7 -0.1 -0.6 2.0 1.8 2.3 1.6 1.5 1.9 1.7 1.7 1.4 2.4 2.9 2.9 2.3 2.1 2.5 2.2 2.0 2.2 2.1 1.7 1.7 2.7 1.4 1.2 1.7 4.0 3.7 3.1 2.7 1.7 2.1 4.4 5.1 5.7 -0.7 -2.2 3.6 3.4 6.2 2.6 2.8 -0.3 15.7 12.3 13.7 12.2 14.2 12.0 13.9 14.5 14.7 12.3 14.9 15.7 11.7 11.6 12.7 11.7 13.5 14.5 13.7 16.1 15.2 75.6 73.1 72.0 75.0 77.5 77.2 77.8 78.7 80.0 82.0 80.7 78.2 80.1 77.7 77.2 79.9 79.7 82.2 81.8 79.8 81.1 90.4 90.7 90.7 91.2 92.6 92.1 90.6 87.8 86.6 84.7 83.4 81.1 79.6 78.4 77.6 77.2 76.5 76.3 75.6 75.3 74.7 9.5 9.6 9.6 9.6 9.8 9.7 9.6 9.3 9.2 9.0 8.9 8.6 8.4 8.3 8.3 8.2 8.2 8.1 8.1 8.0 8.0 11.4 8.9 10.2 8.1 9.3 10.0 8.8 8.5 8.7 6.8 12.6 11.9 8.9 7.6 8.9 7.0 7.7 8.9 7.8 8.4 8.2 WAGES AND INDICATORS OF OVERALL COMPETITIVENESS 2007 2008 2009 2008 2009 2010 2008 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 4 5 6 7 8 GROSS WAGE PER EMPLOYEE, y-o-y growth rates, % Activity - Total 5.9 8.3 3.4 8.6 9.9 7.1 5.5 4.6 2.3 1.7 3.7 4.3 9.5 7.6 8.8 8.7 9.8 A Agriculture, forestry and fishing 8.3 9.1 -0.2 9.3 10.8 6.7 1.2 1.6 -0.5 -2.9 3.3 5.2 10.3 9.7 7.9 13.5 6.3 B Mining and quarrying 6.4 13.4 0.9 13.8 16.0 14.8 5.6 2.4 1.6 -4.9 3.4 4.7 11.8 17.0 12.5 17.3 10.0 C Manufacturing 7.0 7.5 0.8 9.7 9.3 3.4 0.0 -0.5 0.4 3.7 10.1 10.0 11.3 8.4 9.6 11.0 6.4 D Electricity, gas, steam and air conditioning supply 6.2 9.5 3.8 10.1 9.8 8.8 7.9 7.8 5.1 -3.2 4.7 2.4 13.2 9.6 7.8 15.3 8.3 E Water supply sewerage, waste management and remediation activities 7.1 7.8 2.0 9.1 9.0 5.2 4.2 3.2 1.2 0.1 2.7 3.0 10.7 6.8 9.8 10.5 5.5 F Constrution 6.6 7.5 1.0 9.6 9.1 4.3 1.2 1.0 1.6 0.9 2.9 5.8 11.9 7.5 9.5 10.0 6.0 G Wholesale and retail trade, repair of motor vehicles and motorcycles 7.6 7.7 1.9 9.0 8.8 6.1 4.4 2.3 1.2 0.1 2.6 4.1 10.0 8.0 8.9 9.1 7.0 H Transportation and storage 6.0 8.4 0.7 8.5 10.4 6.6 2.3 2.1 0.5 -1.4 1.1 1.2 8.3 7.0 10.2 7.8 13.1 I Accommodation and food service activities 5.3 8.3 1.6 9.6 10.0 4.9 3.4 1.7 0.6 1.0 2.8 4.2 9.5 10.3 8.9 10.3 9.0 J Information and communication 5.7 7.3 1.4 7.8 8.7 6.2 3.7 3.1 0.8 -1.6 1.0 2.5 8.9 6.1 8.3 7.9 8.1 K Financial and insurance activities 7.4 6.0 -0.7 8.8 8.2 0.0 2.0 -3.8 0.3 -0.5 1.2 3.2 11.8 6.4 8.5 7.1 6.3 L Real estate activities 7.0 6.0 1.9 8.6 5.3 3.6 1.6 0.0 1.8 4.5 2.6 5.3 10.1 8.3 7.5 4.7 4.6 M Professional, scientific and technical activities 7.0 8.4 2.1 8.6 9.1 6.4 4.0 3.3 1.5 0.0 1.6 1.8 8.7 7.9 9.2 9.9 7.3 N Administrative and support service activities 7.5 9.6 1.8 11.4 10.2 8.0 6.6 2.1 -0.2 -0.6 2.5 4.3 10.8 11.2 12.2 ''.' 8.3 O Public administration and defence, compulsory social security 5.1 12.2 5.9 10.8 13.2 13.7 11.5 9.8 2.5 0.5 -1.9 -1.1 12.0 10.0 10.4 7.6 18.8 P Education 3.9 7.0 3.6 5.8 7.7 9.0 6.9 6.1 1.2 0.6 0.2 0.7 5.7 5.7 6.1 5.0 10.9 Q Human health and social work activities 3.1 12.0 12.0 4.3 16.8 21.0 21.4 22.6 5.5 1.4 -0.4 -1.0 3.2 3.8 6.0 4.6 24.5 R Arts, entertainment and recreation 3.6 5.3 3.9 5.8 8.3 5.1 7.0 5.7 2.2 0.9 0.7 1.4 3.9 6.9 6.6 4.1 11.3 S Other service activities 3.3 8.2 1.3 8.6 8.5 8.8 4.1 1.0 0.7 0.0 3.2 4.9 10.3 8.8 6.7 9.0 8.0 INDICATORS OF OVERALL COMPETITIVENESS, y-o-y growth rates, % Effective exchange rate,' nominal 0.8 0.5 0.4 1.1 0.4 -1.1 -0.3 -0.3 0.3 1.8 -0.3 -1.9 1.4 1.1 0.9 0.8 0.6 Real (relative consumer prices) 2.3 2.8 0.7 4.2 2.6 -0.1 0.4 0.0 0.2 2.3 -0.3 -1.3 4.7 3.9 3.9 3.5 2.6 Real (relative producer prices)2 2.2 0.8 2.8 1.0 -0.2 1.1 3.0 3.4 3.7 1.4 -2.4 -3.3 2.2 0.9 0.0 -0.2 0.3 USD/EUR 1.371 1.471 1.393 1.562 1.504 1.317 1.302 1.362 1.431 1.478 1.384 1.273 1.575 1.556 1.555 1.577 1.498 Sources of data: SORS, AP, BS, OECD Main Economic Indicators, calculations IMAD. Notes: 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. ^Producer prices in manufacturing activities 2008 2009 2010 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 11.2 9.2 3.9 8.6 6.8 4.2 5.3 5.1 4.1 4.7 3.8 0.7 2.4 1.7 1.3 2.1 2.2 3.6 5.2 4.2 4.2 4.4 4.0 12.9 11.3 -0.1 10.2 1.1 -3.3 6.1 2.0 -1.8 4.7 -0.4 -0.3 -0.7 -5.5 -0.9 -2.5 1.1 3.0 5.7 5.6 4.3 5.6 7.1 20.7 39.0 -4.7 16.0 10.1 5.3 1.7 4.3 -5.9 9.4 2.3 6.2 -3.5 -20.3 16.1 -8.7 2.0 3.5 4.7 1.4 14.0 -0.8 0.8 10.8 6.7 -1.4 5.7 0.1 -0.5 0.4 -0.4 -1.3 0.1 0.1 -0.6 1.6 1.9 4.6 4.3 6.7 8.3 15.2 10.7 10.1 9.4 8.1 6.2 25.2 2.2 3.2 9.4 6.1 8.1 7.6 5.5 10.3 5.6 2.9 6.7 -10.4 -8.6 12.1 3.5 6.6 4.3 3.3 0.8 3.0 1.6 11.3 14.0 -1.0 4.8 4.4 3.6 4.6 3.5 1.0 5.2 1.6 1.2 0.9 -3.3 2.1 1.1 0.0 3.0 5.1 3.5 3.6 2.0 1.6 11.3 7.3 -1.0 7.2 1.7 -0.6 2.5 0.5 -0.9 3.4 2.9 0.6 1.4 -1.4 1.1 2.9 1.0 2.9 4.6 7.2 5.8 4.5 2.1 10.2 8.0 3.9 6.6 6.1 3.5 3.6 1.5 2.9 2.4 1.6 1.5 0.6 0.4 -0.8 0.6 0.3 2.4 5.2 4.2 4.0 4.1 4.0 10.2 7.1 7.5 5.2 3.9 2.4 0.6 2.9 2.2 1.1 2.0 -4.8 4.4 -1.0 -3.3 0.5 -1.5 1.8 3.2 1.5 1.6 0.5 1.8 10.7 7.5 2.0 5.4 3.9 3.0 3.2 3.4 0.4 1.3 1.4 0.6 -0.2 -0.3 3.2 0.0 2.2 1.8 4.4 3.7 4.2 4.6 4.0 10.3 7.8 5.5 5.4 6.9 1.8 2.5 3.4 2.5 3.4 2.5 0.0 0.0 0.7 -3.6 -1.6 0.0 1.6 1.5 2.3 3.1 2.1 2.9 11.4 1.2 -6.3 8.1 3.8 0.6 1.7 -4.2 -5.4 -1.6 2.0 0.5 -1.7 6.3 -1.8 -5.1 1.0 1.6 1.1 2.5 -0.6 7.6 5.0 6.7 4.5 1.5 5.0 2.9 1.4 0.6 1.3 -0.6 -0.5 1.9 1.4 2.0 4.2 5.3 4.0 1.8 3.3 2.7 3.7 3.9 8.4 4.1 10.3 9.3 1.8 8.8 3.1 4.3 4.7 4.6 2.2 3.3 2.0 1.1 1.3 0.4 0.6 -0.9 1.0 1.7 2.0 1.8 1.5 2.1 1.7 11.2 8.4 8.6 7.1 9.1 5.1 5.5 3.2 1.6 1.4 0.0 -0.1 -0.4 -1.0 -1.8 1.1 -1.2 4.1 4.7 5.1 4.1 3.9 3.8 13.3 12.9 16.0 12.3 15.2 8.8 10.7 11.0 10.0 8.4 5.3 -0.3 2.6 1.1 -2.0 2.4 -1.1 -1.5 -3.0 -2.1 -0.6 -0.5 0.9 7.3 8.0 9.4 9.6 9.3 4.2 7.3 6.6 6.0 5.7 2.9 -1.7 2.6 1.8 0.0 -0.1 0.5 0.5 -0.4 0.2 1.0 1.0 0.7 21.5 21.3 20.5 21.4 25.5 18.9 20.0 26.5 22.2 19.3 16.0 0.4 1.7 2.4 0.8 1.0 -1.6 1.2 -0.6 -2.3 -0.2 -0.4 0.7 9.4 10.7 -3.2 9.1 8.2 6.4 6.3 7.2 6.0 4.0 5.8 0.1 1.1 3.2 -0.5 -0.1 0.5 0.6 1.0 2.1 1.3 0.7 0.9 8.3 9.0 6.3 11.3 2.6 5.3 4.3 0.8 1.0 1.2 0.9 0.8 0.3 -0.4 -0.4 0.6 3.4 2.2 4.1 6.1 3.9 4.7 6.0 -0.1 -1.3 -1.7 -0.4 -0.4 -0.3 -0.1 -0.6 -0.3 0.1 -0.1 0.2 0.9 2.2 2.3 0.9 0.4 -0.3 -1.1 -1.1 -1.9 -2.7 -2.1 1.6 0.3 -0.7 0.0 -0.1 0.5 0.8 -0.2 0.1 0.3 -0.4 0.2 0.9 2.1 3.3 1.5 0.5 -0.1 -1.1 -0.4 -1.4 -2.2 -1.6 -0.6 -0.6 0.8 3.2 2.8 2.8 3.5 2.9 3.2 4.0 4.2 3.1 3.8 3.8 1.6 -1.0 -1.9 -2.1 -3.2 -3.8 -2.9 -3.3 -2.9 1.437 1.332 1.273 1.345 1.324 1.279 1.305 1.319 1.365 1.402 1.409 1.427 1.456 1.482 1.491 1.461 1.427 1.369 1.357 1.341 1.257 1.221 1.277 PRICES 2007 2008 2008 2009 2010 2008 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 6 7 8 9 10 CPI, y-o-y growth rates, % 3.6 5.7 0.9 6.6 6.1 3.3 1.8 0.7 -0.2 1.1 1.4 2.1 7.0 6.9 6.0 5.5 4.9 Food, non-alcoholic beverages 7.8 10.1 0.6 12.0 9.8 4.9 3.2 0.9 -0.7 -1.0 -1.4 0.7 11.6 12.2 10.1 7.2 5.3 Alcoholic beverages, tobacco 6.5 3.2 6.7 5.0 0.7 2.1 3.0 7.2 8.5 7.9 7.1 6.5 5.1 -0.2 0.5 1.8 2.1 Clothing and footwear 2.1 4.4 -0.6 5.2 2.1 5.2 1.8 1.2 -2.2 -3.0 -5.0 -1.9 4.1 0.8 1.7 3.7 6.1 Housing, water, electricity, gas 2.6 9.7 -0.3 11.4 11.5 5.3 1.7 -2.1 -3.5 3.0 8.3 11.3 13.4 13.6 10.4 10.5 9.0 Furnishings, household equipment 4.5 5.8 4.0 5.5 6.5 6.7 6.1 4.5 3.5 1.9 1.3 0.8 5.2 5.9 6.4 7.3 7.0 Medical, pharmaceutical products 1.1 2.9 4.0 1.7 4.9 5.8 8.7 5.3 1.4 0.7 -0.6 0.6 1.9 4.5 5.0 5.1 5.2 Transport 0.3 1.9 -3.0 2.9 4.1 -2.2 -3.7 -4.5 -4.1 0.6 1.2 -0.1 4.4 4.9 3.7 3.7 2.6 Communications 0.3 0.6 -4.1 1.9 0.1 -1.7 -4.3 -4.7 -4.3 -3.2 0.0 1.4 1.5 0.7 0.5 -0.9 -0.9 Recreation and culture 3.6 4.4 3.0 5.0 4.8 3.2 3.0 3.6 2.8 2.5 1.2 0.4 5.3 5.6 4.9 4.0 2.8 Education 1.9 5.2 3.4 5.4 4.8 6.1 5.1 3.0 2.7 2.7 2.0 1.9 4.6 4.6 4.6 5.0 6.0 Catering services 7.3 9.6 4.4 10.0 10.4 8.7 6.3 4.9 4.0 2.7 1.9 1.9 10.1 10.7 10.4 10.0 9.7 Miscellaneous goods & services 3.6 3.9 3.8 4.5 3.8 3.4 3.8 3.3 4.4 3.9 2.3 2.0 4.5 4.0 3.7 3.6 3.4 HCPI 3.8 5.5 0.9 6.4 6.2 3.1 1.7 0.6 -0.2 1.4 1.7 2.4 6.8 6.9 6.0 5.6 4.8 Core inflation (excluding fresh food and eneray) 2.6 4.6 1.9 4.9 4.7 4.0 3.1 2.6 1.2 0.7 0.0 0.4 4.7 5.1 4.7 4.5 4.1 PRODUCER PRICE INDICES, y-o-y growth rates, % Total 4.2 3.8 -1.3 3.7 5.1 3.2 1.1 -1.5 -3.1 -1.8 -1.0 2.3 4.4 4.9 5.5 4.8 4.2 Domestic market 5.5 5.6 -0.4 6.1 6.2 4.2 1.5 -0.4 -1.5 -1.1 0.2 2.0 5.9 6.3 6.7 5.7 5.0 Non-domestic market 3.0 2.2 -2.2 1.5 3.9 2.3 0.8 -2.6 -4.5 -2.5 -2.1 2.6 2.8 3.6 4.3 4.0 3.3 euro area 5.1 2.2 -3.5 1.7 4.2 1.5 -0.6 -4.5 -6.0 -3.0 -2.4 2.5 3.7 4.1 4.8 3.8 3.1 non-euro area -0.5 2.1 0.3 1.0 3.4 3.9 3.5 1.1 -1.7 -1.6 -1.6 2.7 1.1 2.5 3.3 4.3 3.9 Import price indices 4.0 1.3 -3.3 0.3 3.8 1.4 -2.1 -4.6 -4.7 -1.8 4.0 8.8 0.8 3.5 3.3 4.7 3.7 PRICE CONTROL,1 y-o-y growth rates, % Energy prices 0.6 12.4 -12.3 16.9 21.1 -1.2 -12.9 -17.7 -17.3 0.4 16.1 18.8 23.2 24.8 20.0 18.4 14.1 Oil products -0.9 11.7 -12.0 17.4 21.1 -5.7 -16.3 -18.9 -15.9 6.2 21.9 20.3 24.1 25.5 20.0 17.7 12.2 Basic utilities -2.3 0.6 3.6 1.3 -1.3 1.1 1.7 0.9 0.8 10.8 - - 1.3 1.3 -5.7 0.7 0.7 Transport & communications 0.6 -0.4 0.6 0.6 -1.3 -1.3 -1.2 -1.1 2.5 2.5 2.5 2.7 0.6 -1.3 -1.3 -1.3 -1.3 Other controlled prices 2.9 1.8 4.9 1.7 1.7 2.4 2.4 6.8 5.6 4.9 4.9 0.4 1.9 1.1 1.6 2.4 2.4 Direct control - total 3.1 8.6 -6.9 11.7 13.7 -0.2 -7.8 -10.9 -10.9 2.9 14.1 16.1 15.7 16.3 12.2 12.4 9.7 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. Since July 2009, formation of prices for utility services is no longer under government control.. 2008 2009 2010 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 3.1 2.1 1.6 2.1 1.8 1.1 0.7 0.3 -0.6 0.0 -0.1 0.0 1.6 1.8 1.5 1.3 1.4 2.3 2.1 1.9 2.1 2.3 5.6 3.8 3.5 3.1 3.0 2.0 0.6 0.0 -1.3 -0.4 -0.4 -1.2 -0.8 -1.1 -2.4 -1.2 -0.7 -0.1 0.4 1.7 2.8 2.9 2.1 2.0 2.2 2.7 4.0 4.3 8.4 9.0 9.1 8.6 7.7 7.7 8.1 8.0 7.9 7.6 5.9 9.9 5.1 4.5 5.2 8.2 4.6 4.8 2.3 0.6 2.3 0.5 1.9 1.1 -1.3 -1.7 -3.6 -2.7 -2.8 -3.4 -5.9 -5.7 -3.6 -0.9 -2.4 -2.3 -2.1 -1.7 4.8 2.4 0.8 3.0 1.2 0.1 -2.3 -4.0 -4.9 -3.5 -2.2 -1.7 4.5 6.3 7.6 8.4 8.9 10.7 11.6 11.7 12.4 12.3 6.7 6.5 6.5 6.7 5.1 4.7 4.2 4.5 4.0 4.0 2.5 2.1 2.2 1.5 1.8 1.6 0.6 1.0 0.7 0.8 0.5 1.3 5.4 6.7 9.5 9.8 6.9 5.4 5.5 5.1 1.9 1.6 0.7 0.6 1.3 0.3 -0.3 -0.7 -0.7 0.7 0.5 0.5 2.8 4.0 -3.6 -5.4 -5.1 -2.5 -3.6 -3.5 -4.7 -5.2 -5.6 -3.5 -3.1 -2.8 1.9 2.9 2.3 0.5 0.9 0.8 0.4 -1.5 -1.2 -2.0 0.0 -4.3 -3.7 -4.7 -4.6 -5.2 -4.4 -4.4 -4.1 -4.2 -4.6 -3.7 -4.0 -1.9 -0.6 0.2 0.4 1.0 1.5 1.6 -0.3 0.7 3.2 3.6 2.8 2.8 3.4 3.3 3.6 4.1 3.0 2.7 2.7 3.1 2.7 1.7 1.7 1.0 0.8 0.9 0.6 -0.2 -0.6 -0.3 6.1 6.1 6.0 6.3 3.2 3.2 3.0 3.0 3.0 3.0 2.2 2.7 2.6 2.6 2.4 1.8 1.8 1.8 1.9 1.9 1.9 1.9 8.8 7.7 6.5 6.3 6.0 5.1 4.8 4.7 4.4 4.2 3.3 3.1 2.3 2.6 2.0 1.8 2.0 1.9 2.1 1.7 1.3 1.2 3.2 3.4 3.4 3.7 4.2 3.3 3.1 3.5 4.5 4.4 4.3 4.2 4.1 3.6 3.3 2.3 1.3 1.8 2.1 2.0 0.7 0.4 2.9 1.8 1.4 2.1 1.6 1.1 0.5 0.2 -0.6 0.1 0.0 0.2 1.8 2.1 1.8 1.6 1.8 2.7 2.4 2.1 2.3 2.4 3.9 3.9 3.2 2.8 3.1 2.6 2.6 2.6 1.4 1.3 0.9 0.7 1.0 0.3 0.1 -0.1 0.0 0.6 0.4 0.2 0.2 0.5 3.3 2.2 1.9 1.1 0.3 -0.5 -1.6 -2.4 -3.0 -3.3 -2.8 -2.4 -1.9 -1.2 -1.4 -1.2 -0.2 1.0 2.9 3.0 3.4 3.5 4.0 3.5 2.3 1.2 0.8 0.2 -0.7 -0.7 -1.3 -1.7 -1.6 -1.4 -1.1 -0.7 -0.1 0.1 0.5 0.7 2.6 2.6 2.7 2.9 2.7 1.0 1.5 1.0 -0.1 -1.2 -2.5 -4.0 -4.7 -4.9 -4.0 -3.2 -2.6 -1.7 -2.8 -2.5 -0.9 1.3 3.2 3.3 4.2 4.1 1.4 0.1 0.2 -0.3 -1.7 -3.1 -4.1 -6.2 -6.7 -6.4 -4.8 -3.9 -2.8 -2.3 -3.0 -3.1 -1.0 1.3 3.2 3.1 4.5 4.1 5.1 2.7 4.2 3.5 2.9 2.5 0.5 0.2 -0.6 -2.0 -2.4 -1.9 -2.3 -0.6 -2.4 -1.5 -0.8 1.4 3.2 3.6 3.4 4.1 1.6 -1.0 -2.4 -1.3 -2.7 -3.8 -4.8 -5.2 -4.7 -5.0 -4.5 -3.7 -2.1 0.4 3.3 3.2 5.4 8.3 9.4 8.7 7.6 7.9 -4.3 -12.7 -15.0 -8.9 -14.6 -14.5 -18.0 -20.1 -21.5 -16.3 -13.9 -12.6 3.8 13.0 16.9 13.9 17.5 20.1 20.5 15.8 17.4 15.6 -9.4 -18.9 -19.5 -11.2 -17.9 -15.6 -19.4 -21.2 -20.9 -14.8 -11.5 -9.4 10.3 21.9 24.4 18.6 22.8 22.7 22.8 15.6 15.2 13.2 0.8 1.6 1.6 1.7 1.9 1.0 0.7 0.8 0.8 0.8 0.8 0.8 16.3 15.4 - - - - - - - - -1.3 -1.3 -1.3 -1.3 -1.1 -1.1 -1.1 -1.1 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.5 2.7 2.7 2.7 2.7 1.1 1.1 2.4 2.4 2.3 2.4 2.4 6.2 7.1 7.1 7.1 4.9 4.9 4.9 4.9 4.9 4.9 4.9 4.9 1.0 0.1 0.1 0.1 0.1 -2.2 -7.8 -9.4 -5.0 -9.0 -8.6 -11.2 -12.9 -13.7 -10.2 -8.6 -7.6 6.0 11.8 14.6 12.6 15.2 16.7 17.2 14.4 15.5 14.3 BALANCE OF PAYMENTS 2007 2008 2009 2008 2009 2010 2008 Q2 1 Q3 1 Q4 Q1 1 Q2 1 Q3 1 Q4 Q1 1 Q2 7 8 9 10 BALANCE OF PAYMENTS, in EUR m Current account -1,646 -2,489 -526 -544 -698 -757 -304 64 -235 -51 -121 -42 -367 -198 -132 -255 Goods1 -1,666 -2,650 -699 -668 -751 -743 -156 -29 -228 -286 -127 -164 -263 -298 -190 -266 Exports 19,798 20,048 16,167 5,349 5,038 4,577 3,934 4,064 3,950 4,219 4,213 4,720 1,809 1,339 1,891 1,841 Imports 21,464 22,698 16,866 6,017 5,789 5,320 4,090 4,093 4,178 4,505 4,340 4,884 2,071 1,637 2,080 2,107 Services 1,047 1,493 1,114 460 413 304 239 311 296 269 217 305 97 142 174 141 Exports 4,145 5,043 4,301 1,299 1,475 1,219 918 1,049 1,272 1,061 911 1,094 513 486 476 447 Imports 3,098 3,549 3,187 839 1,062 915 679 738 977 793 695 789 417 344 302 306 Income -789 -1,030 -782 -277 -357 -231 -230 -200 -241 -112 -157 -150 -205 -55 -97 -90 Receipts 1,169 1,261 665 315 335 342 131 176 138 220 207 219 108 116 110 109 Expenditure 1,957 2,292 1,447 592 691 573 361 376 378 332 364 369 314 171 207 199 Current transfers -239 -302 -159 -59 -4 -87 -158 -18 -62 79 -53 -34 4 13 -20 -40 Receipts 941 870 957 215 254 238 141 266 176 374 258 213 73 115 66 61 Expenditure 1,180 1,172 1,116 274 257 325 299 283 238 296 312 246 69 102 86 101 Capital and financial account 1,920 2,545 220 763 631 703 -25 -57 129 173 103 299 416 210 6 -117 Capital account -52 -25 -9 7 -4 -26 -4 41 -4 -42 45 2 -5 1 1 5 Financial account 1,972 2,571 230 756 635 729 -20 -98 133 214 58 297 420 209 5 -122 Direct investment -210 381 -539 -123 82 299 3 -415 -46 -81 -39 76 115 56 -90 -29 Domestic abroad -1,317 -949 -121 -439 -248 -132 104 -260 35 1 -120 31 -116 -35 -98 -82 Foreign in Slovenia 1,106 1,329 -419 317 330 431 -100 -155 -81 -82 81 45 231 91 8 53 Portfolio investment -2,255 572 4,625 -1,155 166 1,258 874 1,151 2,293 307 1,102 500 134 -207 239 387 Financial derivatives -15 46 -2 4 5 6 -23 12 12 -2 -22 -35 2 2 2 2 Other investment 4,313 1,551 -4,021 1,949 380 -855 -988 -891 -2,112 -29 -1,045 -193 242 254 -116 -515 Assets -4,741 -427 -273 -185 434 300 746 -161 -1,053 194 278 -578 131 -63 366 -434 Commercial credits -400 -142 417 -170 -9 554 62 166 -37 227 -228 -212 16 146 -171 -43 Loans -1,895 -325 -29 -442 158 -91 40 -91 -23 45 -359 503 254 -377 280 -286 Currency and deposits -2,454 35 -587 387 304 -155 638 -239 -1,004 18 867 -863 -144 170 279 -115 Other assets 7 4 -75 40 -19 -8 7 2 12 -96 -2 -6 5 -2 -22 9 Liabilities 9,054 1,978 -3,747 2,134 -54 -1,156 -1,735 -730 -1,059 -223 -1,323 385 111 317 -482 -80 Commercial credits 499 -73 -459 309 -25 -536 -301 -105 25 -78 98 270 32 -117 59 -66 Loans 3,841 1,869 -2,941 1,472 242 -489 -571 -1,331 -73 -966 -415 -197 112 228 -98 37 Deposits 4,727 190 -318 346 -272 -137 -858 700 -983 822 -1,079 371 -40 206 -438 -51 Other liabilities -13 -7 -29 7 2 6 -5 6 -28 -2 73 -58 6 0 -5 0 International reserves2 140 21 167 80 1 21 114 46 -13 20 62 -50 -73 104 -30 33 Statistical error -273 -56 305 -219 67 54 329 -7 106 -122 17 -257 -49 -11 127 372 EXPORTS AND IMPORTS BY END-USE OF PRODUCTS, in EUR m Export of investment goods 1,936 2,241 1,783 576 598 544 442 461 407 473 404 455 203 152 243 201 Intermediate goods 10,436 10,760 8,090 2,893 2,730 2,385 1,977 1,996 2,025 2,093 2,236 2,546 976 756 998 981 Consumer goods 7,035 6,808 6,144 1,817 1,648 1,590 1,474 1,568 1,482 1,620 1,540 1,685 607 411 629 638 Import of investment goods 3,031 3,441 2,288 928 862 878 583 551 521 633 449 605 294 226 342 289 Intermediate goods 12,875 13,735 9,823 3,668 3,543 3,107 2,381 2,335 2,458 2,649 2,682 3,022 1,291 1,029 1,222 1,309 Consumer goods 5,601 5,870 5,004 1,520 1,475 1,416 1,195 1,262 1,255 1,292 1,263 1,318 520 404 551 544 Sources of data: BS, SORS. Notes: 'exports and imports (F.O.B.) include also the adjustment for exports and imports of goods by ITRS and duty-free shops reports; 2 reserve assets of the BS. 2008 2009 2010 11 1 12 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 1 9 1 10 1 11 1 12 1|2|3|4|5|6|7 -156 -346 -75 -137 -92 4 18 42 -84 -136 -15 -55 87 -83 -27 -131 38 -52 -91 100 57 -180 -297 -48 -37 -71 -67 -7 45 -50 -161 -17 -50 -79 -158 -17 -87 -23 -71 -123 30 2 1,532 1,204 1,214 1,293 1,427 1,304 1,333 1,427 1,401 1,065 1,484 1,499 1,471 1,248 1,231 1,330 1,651 1,474 1,567 1,679 1,606 1,711 1,501 1,262 1,330 1,498 1,371 1,340 1,382 1,451 1,226 1,501 1,549 1,550 1,406 1,248 1,417 1,674 1,545 1,690 1,649 1,604 110 53 92 60 87 103 112 96 59 125 111 114 85 70 74 63 80 88 105 112 82 378 394 307 278 334 344 348 357 436 447 389 367 322 373 293 281 337 348 359 388 457 268 341 215 218 246 241 236 261 376 322 278 253 237 303 219 218 257 259 254 275 375 -74 -67 -71 -82 -76 -56 -77 -67 -96 -66 -79 -63 17 -65 -56 -55 -45 -54 -50 -45 -52 107 126 48 42 41 51 55 69 51 43 44 45 107 69 66 64 77 67 75 76 71 181 193 119 124 118 107 132 137 146 109 123 108 90 134 122 120 122 122 125 121 123 -12 -35 -48 -78 -32 24 -11 -31 2 -35 -30 -55 64 70 -28 -52 26 -15 -22 3 25 87 90 35 45 61 116 80 69 80 53 43 60 148 166 63 83 112 54 81 78 113 99 125 83 124 93 92 90 101 77 87 73 116 83 96 91 135 86 68 103 75 88 291 529 188 -96 -117 15 98 -170 104 -66 92 95 -7 85 62 82 -41 150 20 128 82 41 -72 -7 -2 5 -2 -1 45 -3 -2 1 1 25 -67 -7 -2 55 2 -3 3 -8 251 601 196 -95 -121 18 99 -215 106 -64 91 94 -32 153 69 85 -96 149 24 125 90 93 235 148 -14 -132 -100 -255 -61 -40 27 -34 -17 -89 25 28 -45 -22 0 29 46 50 -10 -40 129 -7 -18 -74 -189 3 26 24 -15 -25 36 -10 -7 -77 -37 -23 24 30 6 103 275 20 -6 -114 -26 -66 -64 -65 3 -18 8 -126 36 35 32 14 23 5 16 45 658 213 410 559 -95 1,005 263 -118 864 -216 1,644 -14 -71 392 1,357 -449 194 606 -203 97 111 2 2 -10 -13 0 4 8 -1 -2 6 8 3 3 -7 -2 -2 -19 -1 -11 -23 -1 -486 145 -349 -713 74 -888 20 -24 -663 90 -1,539 115 114 -258 -1,365 573 -252 -488 268 28 -67 18 717 73 603 70 -152 -730 721 -656 719 -1,116 219 -349 323 158 69 51 1 -637 57 677 131 466 149 -26 -62 70 141 -45 -6 85 -117 -68 -31 326 -4 -40 -184 -35 -91 -86 -5 73 122 -185 206 19 48 -62 -77 -58 72 -37 -8 48 5 -54 29 -333 430 17 56 285 -191 151 98 413 127 -269 -808 838 -592 556 -968 292 -367 93 222 76 569 -401 -550 88 400 5 -22 11 10 -15 -1 -2 5 0 6 6 3 2 -100 -6 5 -1 7 -13 0 -3 -504 -572 -422 -1,316 4 -736 751 -745 -7 -629 -423 -104 462 -581 -1,523 503 -303 -490 904 -30 -744 -182 -288 -299 -33 30 -48 -32 -25 20 -110 116 88 80 -246 -83 67 114 56 129 85 -39 -483 -43 -125 18 -464 -328 349 -1,353 12 -30 -55 -159 32 -839 -40 -18 -356 -276 328 -248 -29 159 -244 5 -1,303 441 -361 434 627 -10 -491 -482 -36 358 500 -1,394 448 -133 -206 455 121 -639 3 3 -3 2 -4 2 -1 5 -30 3 -2 2 -8 4 -6 7 71 -63 -8 12 -37 -17 5 -4 86 31 -5 62 -11 -53 29 12 8 11 1 51 7 4 32 -60 -23 -3 -135 -184 -113 234 209 -19 -115 128 -20 202 -77 -40 -79 -3 -35 49 3 -99 71 -229 -139 185 158 128 152 162 171 141 149 147 110 150 167 154 151 117 120 167 143 155 157 N/A 816 589 644 637 695 646 652 698 722 552 751 782 730 581 658 725 853 804 855 887 N/A 511 441 429 491 555 478 524 567 517 392 572 540 578 502 447 475 617 517 546 623 N/A 279 310 172 161 249 190 187 175 170 154 197 218 208 207 121 148 180 211 218 176 N/A 1,017 782 758 803 820 762 759 814 861 711 886 913 937 799 795 879 1,009 948 1,058 1,016 N/A 441 431 353 389 453 437 416 408 434 381 441 447 433 413 357 390 516 417 449 452 N/A MONETARY INDICATORS AND INTEREST RATES 2007 2008 2009 2008 2009 4 1 5 1 6 1 7 1 8 1 9 1 10 1 11 1 12 1 1 2 SELECTED CLAIMS OF OTHER MFI ON DOMESTIC SECTORS, end of the month, in EUR m Claims of the BS on central government 67 68 160 66 66 65 66 66 67 69 69 68 69 87 Central government (S. 1311) 2,367 2,162 3497 2,123 2,162 2,052 2,030 2,069 2,046 2,058 2,176 2,162 2,704 2,867 Other government (S. 1312, 1313, 1314) 118 212 376 128 129 133 136 143 178 184 181 212 223 229 Households (S. 14, 15) 6,818 7,827 8413 7,235 7,318 7,409 7,521 7,603 7,705 7,857 7,785 7,827 7,831 7,852 Non-financial corporations (S. 11) 18,105 21,149 21682 19,351 19,616 20,064 20,404 20,619 20,872 21,134 21,092 21,149 21,346 21,429 Non-monetary financial institutions (S. 123, 124, 125) 2,305 2,815 2703 2,558 2,568 2,736 2,726 2,729 2,798 2,815 2,845 2,815 2,815 2,814 Monetary financial institutions (S. 121, 122) 2,401 3,666 5301 2,624 2,375 2,386 2,403 2,400 2,737 2,965 2,963 3,666 3,887 3,826 Claims on domestic sectors, TOTAL In domestic currency 26,555 32,113 34730 28,503 28,871 29,380 29,805 30,108 30,888 31,444 31,594 32,113 32,388 32,663 In foreign currency 1,990 2,370 1895 2,276 2,259 2,263 2,228 2,271 2,344 2,512 2,371 2,370 2,372 2,315 Securities, total 3,570 3,346 5348 3,239 3,038 3,137 3,188 3,184 3,104 3,059 3,077 3,346 4,046 4,040 SELECTED OBLIGATIONS OF OTHER MFI ON DOMESTIC SECTORS, end of the month, l n EUR m Deposits in domestic currency, total 20,029 23,129 27967 20,774 20,613 21,144 21,341 21,465 21,992 22,177 22,385 23,129 23,563 24,487 Overniaht 6,887 6,605 7200 6,711 6,841 7,071 6,744 6,703 6,918 6,666 6,577 6,605 6,415 6,421 With agreed maturity -short-term 8,913 10,971 9766 9,734 9,292 9,439 9,936 9,929 10,038 10,530 10,659 10,971 11,246 12,053 With agreed maturity -long-term 2,857 4,157 9703 2,926 3,046 3,170 3,241 3,378 3,519 3,555 3,727 4,157 4,542 4,729 Short-term deposits redeemable at notice 1,372 1,396 1298 1,403 1,434 1,464 1,420 1,455 1,517 1,426 1,422 1,396 1,360 1,284 Deposits in foreign currency, total 559 490 433 529 527 488 491 502 493 537 551 490 504 502 Overniaht 218 215 237 222 225 218 220 228 218 244 247 215 242 230 With agreed maturity -short-term 248 198 123 224 224 196 192 190 196 213 227 198 181 195 With agreed maturity -long-term 56 41 45 45 42 42 43 42 43 44 42 41 42 43 Short-term deposits redeemable at notice 37 36 27 38 36 32 36 42 36 36 35 36 39 34 INTEREST RATES OF MONETARY FINANCIAL INSTITUTIONS, % New deposits in domestic currency Households Overnight deposits 0.36 0.46 0.28 0.43 0.46 0.46 0.48 0.48 0.48 0.51 0.52 0.43 0.48 0.40 Time deposits with maturity of up to one year 3.36 4.30 2.51 4.14 4.20 4.30 4.40 4.39 4.53 4.65 4.56 4.45 4.08 3.40 New loans to households in domestic currency Housing loans, 5-10 year fixed interest rate 5.80 6.77 6.43 6.53 6.53 6.63 6.71 6.95 6.99 7.10 7.17 6.88 7.05 6.63 New loans to non-financial corporations in domestic currency Loan over EUR 1 million, 1-5 year fixed interest rate 5.76 6.62 6.28 6.32 5.47 6.63 6.91 6.53 6.94 6.76 7.24 7.74 6.61 6.35 INTEREST RATES OF THE EUROPEAN CENTRAL BANK, % Main refinancing operation^ 3.8^ 3.8^ 1.2^ 4.0^ 4.0^ 4.0^ 4.2^ 4.2^ 4.2^ 3.7^ 3.2^ 2.5^ 2.0^ 2.00 INTERBANK INTEREST RATES EURIBOR 3-month rates 4.28 4.63 1.23 4.78 4.86 4.94 4.96 4.97 5.02 5.11 4.24 3.29 2.46 1.94 6-month rates 4.35 4.72 1.44 4.80 4.90 5.09 5.15 5.16 5.22 5.18 4.29 3.37 2.54 2.03 LIBOR CHF 3-month rates 2.55 2.58 0.38 2.85 2.78 2.84 2.79 2.75 2.78 3.00 1.97 0.91 0.57 0.51 6-month rates 2.65 2.69 0.50 2.93 2.89 2.98 2.94 2.89 2.92 3.09 2.16 1.08 0.71 0.65 Sources of data: BS, BBA - British Bankers' Association. 2009 2010 3 1 4 1 5 1 6 1 7 1 8 1 9 1 10 1 11 1 12 1|2|3|4|5|6|7|8 103 121 140 142 151 167 166 161 161 160 176 177 140 140 142 141 140 142 3,134 3,288 3,542 3,472 3,456 3,427 3,610 3,625 3,581 3,497 3,334 3,382 2,884 2,897 3,001 3,125 3,130 3,326 233 243 254 251 257 262 281 305 336 376 390 395 390 392 395 401 415 421 7,868 7,910 7,946 7,951 8,055 8,135 8,231 8,295 8,345 8,413 8,452 8,480 8,601 8,647 8,701 8,897 8,917 9,062 21,469 21,509 21,516 21,517 21,557 21,671 21,704 21,688 21,645 21,704 21,792 21,896 21,950 22,062 21,997 22,015 22,020 21,816 2,851 2,869 2,838 2,835 2,838 2,868 2,846 2,846 2,772 2,680 2,684 2,669 2,620 2,606 2,558 2,537 2,516 2,502 3,786 3,829 4,008 4,365 4,382 4,334 4,723 4,563 4,589 5,302 6,141 5,093 5,057 5,555 5,638 6,115 5,459 5,315 32,648 32,790 33,140 33,353 33,601 33,628 34,045 33,922 33,962 34,731 35,678 34,817 34,893 35,430 35,620 36,524 35,990 35,899 2,190 2,172 2,122 2,059 2,017 2,003 1,969 1,939 1,919 1,895 1,904 1,894 1,887 1,859 1,852 1,392 1,355 1,367 4,504 4,686 4,843 4,979 4,925 5,067 5,380 5,460 5,386 5,345 5,211 5,204 4,723 4,871 4,819 5,174 5,112 5,175 24,334 25,649 26,020 26,576 26,206 25,956 26,950 26,860 26,930 27,965 28,953 28,198 27,716 27,949 28,085 27948 27077 27357 6,609 6,610 6,876 7,163 6,862 7,011 7,079 6,940 7,028 7,200 7,949 7,139 7,396 7,351 7,732 7834 7868 8027 11,705 12,951 13,053 12,015 10,560 10,067 10,720 10,487 10,283 9,779 9,722 9,479 8,582 8,347 8,029 8400 8593 8634 4,827 4,876 4,868 6,182 7,600 7,712 7,952 8,190 8,315 9,688 9,928 10,260 10,431 10,894 11,005 11539 10460 10529 1,193 1,212 1,223 1,216 1,184 1,166 1,199 1,243 1,304 1,298 1,354 1,320 1,307 1,357 1,319 175 156 167 491 489 495 492 480 462 462 457 454 433 426 439 436 450 495 708 465 495 233 231 251 249 239 240 244 242 261 238 240 241 250 270 299 512 283 310 177 180 166 170 166 150 144 141 122 123 117 120 110 103 104 130 122 121 42 42 41 39 39 38 43 42 43 45 48 52 54 54 57 64 58 61 39 36 37 34 36 34 31 32 28 27 21 26 22 23 35 2 2 3 0.34 0.28 0.25 0.23 0.23 0.23 0.23 0.23 0.23 0.23 0.22 0.22 0.22 0.22 0.21 0.19 0.19 - 2.82 2.44 2.28 2.40 2.35 2.27 2.14 2.04 1.97 2.00 1.91 1.75 1.69 1.66 1.72 1.74 1.87 5.75 6.75 6.37 6.59 6.74 6.57 6.64 6.74 5.00 6.28 6.11 6.08 5.33 5.80 5.38 5.42 5.12 6.34 6.05 6.10 6.19 6.36 6.20 6.66 6.47 5.94 6.06 6.15 6.31 5.64 5.98 6.03 6.19 5.4o 1.5^ 1.2^ 1.0^ 1.0^ 1.0^ 1.0^ 1.0^ 1.0^ 1.0^ 1.0^ 1.0^ 1.0^ 1.0^ 1.0^ 1.0^ 1.0^ 1.0^ 1.00 1.64 1.42 1.28 1.23 0.98 0.86 0.77 0.74 0.72 0.71 0.68 0.66 0.64 0.64 0.69 0.73 0.85 0.90 1.78 1.61 1.48 1.44 1.21 1.12 1.04 1.02 0.99 1.00 0.98 0.97 0.95 0.96 0.98 1.01 1.10 1.15 0.44 0.40 0.40 0.40 0.37 0.34 0.30 0.27 0.25 0.25 0.25 0.25 0.25 0.24 0.19 0.10 - 0.58 0.54 0.54 0.52 0.49 0.45 0.41 0.39 0.36 0.35 0.34 0.33 0.33 0.33 0.28 0.20 - - PUBLIC FINANCE 2007 2008 2009 2008 2009 2010 2008 Q2 1 Q3 1 Q4 Q1 1 Q2 1 Q3 1 Q4 Q^ Q2 7 1 8 1 9 1 10 CONSOLIDATED BALANCE OF PUBLIC FINANCING (GFS-IMF methodology), current prices, EUR m GENERAL GOVERNMENT REVENUES TOTAL REVENUES 14,006.1 15,339.2 14,408.0 4,005.7 3,857.5 4,106.6 3,283.0 3,542.8 3,558.8 4,023.5 3,310.2 3,476.9 1,342.2 1,226.0 1,289.3 1,310.0 Current revenues 13,467.2 14,792.3 13,639.5 3,881.0 3,733.8 3,903.4 3,204.0 3,322.8 3,470.3 3,642.3 3,157.8 3,367.7 1,306.1 1,164.7 1,263.0 1,295.2 Tax revenues 12,757.9 13,937.4 12,955.4 3,702.0 3,472.0 3,653.3 3,058.9 3,164.5 3,279.0 3,453.0 2,983.4 3,189.2 1,253.4 1,066.2 1,152.4 1,234.1 Taxes on income and profit 2,917.7 3,442.2 2,805.1 1,106.5 806.5 834.7 707.3 617.5 735.5 744.8 635.5 594.4 297.9 256.5 252.1 261.1 Social security contributions 4,598.0 5,095.0 5,161.3 1,254.2 1,272.9 1,364.8 1,285.3 1,280.9 1,260.6 1,334.5 1,274.4 1,303.8 425.8 414.8 432.3 435.0 Taxes on payroll and workforce 418.1 258.0 28.5 62.2 63.5 72.9 7.4 7.2 6.2 7.7 6.3 7.2 21.3 20.4 21.8 22.1 Taxes on property 206.4 214.9 207.0 62.6 69.6 55.2 20.6 51.5 74.6 60.2 24.1 58.9 23.0 26.5 20.0 16.3 Domestic taxes on goods and services 4,498.6 4,805.3 4,660.2 1,181.7 1,227.8 1,296.4 1,015.4 1,177.5 1,184.2 1,283.1 1,023.9 1,199.2 475.3 336.2 416.3 490.6 Taxes on international trade & transactions 117.1 120.1 90.5 33.7 31.0 29.8 22.5 29.2 17.2 21.7 18.7 24.7 9.8 11.5 9.7 10.2 Other taxes 2.1 1.8 2.9 1.0 0.7 -0.6 0.5 0.7 0.7 1.0 0.5 1.0 0.3 0.2 0.2 -1.2 Non-tax revenues 709.2 854.9 684.1 179.0 261.8 250.1 145.1 158.4 191.3 189.3 174.4 178.5 52.7 98.5 110.6 61.1 Capital revenues 136.6 117.3 106.5 26.9 28.8 33.6 14.1 29.7 19.3 43.5 9.8 17.8 12.9 6.8 9.0 6.1 Grants 11.9 10.4 11.1 2.1 3.1 3.1 2.9 1.7 1.9 4.7 2.9 2.2 1.6 0.3 1.2 0.6 Transferred revenues 42.5 53.9 54.3 0.9 0.6 51.3 0.2 1.5 1.1 51.5 0.5 2.3 0.1 0.5 0.0 0.4 Receipts from the EU budget 348.0 365.4 596.5 94.8 91.3 115.3 61.8 186.9 66.2 281.5 139.2 86.9 21.5 53.7 16.1 7.7 GENERAL GOVERNMENT EXPENDITURES TOTAL EXPENDITURES 13,915.5 15,441.7 16,368.2 3,792.9 3,628.8 4,631.4 3,877.1 4,064.6 3,767.1 4,659.5 4,035.2 4,121.8 1,139.6 1,179.6 1,309.7 1,259.5 Current expenditures 5,950.9 6,557.5 6,797.3 1,581.7 1,513.7 1,886.2 1,768.8 1,682.7 1,578.1 1,771.3 1,795.6 1,756.5 507.2 486.1 520.4 535.2 Wages, salaries and other personnel expenditures 3,276.9 3,578.9 3,912.3 906.8 892.5 959.8 965.0 1,005.6 955.4 985.9 956.6 1,012.9 292.5 292.5 307.6 292.9 Expenditures on goods and services 2,212.2 2,527.5 2,506.8 589.3 586.1 829.0 547.1 618.0 603.9 741.4 557.0 623.7 204.0 185.7 196.5 207.5 Interest payments 357.0 335.2 335.9 69.8 12.9 31.5 246.7 48.4 12.0 29.0 272.6 110.0 4.9 2.2 5.7 22.7 Reserves 104.8 116.0 42.3 15.8 22.2 65.9 10.0 10.9 6.8 14.9 9.4 9.9 5.9 5.7 10.6 12.0 Current transfers 6,143.9 6,742.2 7,340.3 1,856.8 1,567.3 1,828.2 1,748.2 1,936.1 1,736.9 1,918.2 1,849.0 1,995.1 513.9 535.3 518.1 528.4 Subsidies 423.4 476.5 597.9 243.0 57.7 115.3 165.0 126.9 86.5 219.4 160.7 122.8 16.6 19.4 21.7 27.7 Current transfers to individuals and households 5,093.3 5,619.2 6,024.1 1,448.9 1,344.8 1,522.0 1,436.2 1,614.8 1,475.9 1,497.6 1,529.0 1,671.1 442.0 464.4 438.4 448.8 Current transfers to non-profit institutions, other current domestic transfers 595.3 598.3 679.5 151.2 153.2 175.2 140.0 178.5 164.5 195.1 150.6 188.6 54.0 48.4 50.7 51.4 Current transfers abroad 32.0 48.2 38.9 13.6 11.6 15.7 7.0 15.9 9.9 6.1 8.7 12.6 1.3 3.0 7.3 0.5 Capital expenditures 1,130.5 1,255.5 1,293.3 215.9 350.0 540.6 175.3 237.2 297.5 584.1 192.8 212.4 77.7 98.2 174.1 94.5 Capital transfers 334.3 458.6 495.2 62.3 130.8 234.9 35.9 112.9 86.0 259.9 47.2 90.0 21.8 38.0 70.9 53.0 Payments to the EU budget 355.9 427.9 439.3 76.2 67.0 141.5 148.9 95.6 68.7 126.1 150.6 67.8 18.9 21.9 26.2 48.4 SURPLUS / DEFICIT 90.6 -102.5 -1,961.4 - - - - - - - - - - - - Source of data: MF Bulletin. Note: in line with the changed methodology of the International Monetary Fund of 2001, social security contributions paid by the state are not consolidated. Data prior to 2007 are recalculated on the basis of the irrevocable SIT/EUR exchange rate = 239.64. 2008 2009 2010 11 1 12 1 1 2 3 1 4 1 5 1 6 1 7 1 8 1 9 1 10 1 11 1 12 1 1 2 1 3 1 4 1 5 1 6 1,305.0 1,491.6 1,123.2 1,067.7 1,092.1 1,199.9 1,102.2 1,240.7 1,285.0 1,182.6 1,091.2 1,241.3 1,364.0 1,418.1 1,076.9 1,164.2 1,069.1 1,083.1 1,146.4 1,247.4 1,184.7 1,423.5 1,112.4 1,029.2 1,062.4 1,124.2 1,047.1 1,151.5 1,240.6 1,157.6 1,072.2 1,218.5 1,170.6 1,253.2 1,048.1 1,116.0 993.6 1,063.0 1,113.2 1,191.5 1,126.5 1,292.7 1,068.5 980.1 1,010.3 1,076.2 996.5 1,091.7 1,194.2 1,087.7 997.1 1,164.1 1,113.3 1,175.5 994.1 1,053.8 935.4 1,000.9 1,057.0 1,131.4 261.4 312.2 249.4 239.9 218.1 195.9 229.5 192.1 291.4 233.6 210.4 234.2 232.4 278.2 224.3 219.9 191.3 108.0 210.0 276.4 434.9 494.9 433.4 423.7 428.1 433.1 423.8 423.9 424.5 417.3 418.8 428.7 426.3 479.5 424.0 414.6 435.7 437.4 431.5 434.8 22.7 28.1 3.2 2.0 2.3 2.4 2.3 2.4 2.6 1.7 1.9 2.4 2.5 2.9 2.1 2.0 2.2 2.5 2.2 2.5 26.6 12.3 5.3 7.9 7.4 7.9 15.8 27.9 22.6 34.6 17.4 17.1 30.4 12.7 6.7 8.6 8.8 9.7 31.2 18.0 371.0 434.9 370.7 298.5 346.2 424.3 316.7 436.5 445.4 395.4 343.5 474.0 413.3 395.8 331.1 401.7 291.0 434.8 373.4 391.1 9.7 9.9 6.3 8.1 8.1 12.4 8.2 8.6 7.4 5.1 4.7 7.4 8.1 6.1 5.7 6.9 6.1 8.3 8.4 8.1 0.2 0.4 0.1 0.1 0.2 0.2 0.2 0.3 0.2 0.1 0.4 0.3 0.3 0.3 0.1 0.1 0.3 0.2 0.3 0.5 58.1 130.9 43.8 49.1 52.2 48.0 50.6 59.8 46.4 69.8 75.1 54.3 57.3 77.7 54.0 62.2 58.2 62.2 56.2 60.1 6.2 21.2 2.8 5.9 5.3 3.9 15.5 10.4 8.2 6.4 4.7 6.8 9.2 27.5 2.3 2.7 4.8 7.3 5.3 5.2 1.0 1.6 0.2 0.7 1.9 0.8 0.2 0.8 0.9 0.2 0.8 1.0 1.0 2.7 0.2 0.2 2.5 0.8 1.0 0.3 49.5 1.4 0.2 0.0 0.1 0.4 0.1 1.0 0.6 0.1 0.4 0.5 49.3 1.7 0.1 0.2 0.3 0.9 0.6 0.8 63.6 43.9 7.5 31.9 22.4 70.6 39.3 77.0 34.7 18.4 13.1 14.5 133.9 133.1 26.3 45.0 67.9 11.1 26.3 49.5 1,452.7 1,919.2 1,119.8 1,408.5 1,348.8 1,255.5 1,478.1 1,330.9 1,249.6 1,264.6 1,252.9 1,402.4 1,443.7 1,813.4 1,307.1 1,372.2 1,355.9 1,322.8 1,464.3 1,334.7 562.4 788.7 502.2 619.0 647.6 569.3 580.8 532.6 539.0 535.4 503.7 557.2 542.0 672.1 520.1 631.7 643.8 614.0 594.2 548.2 306.4 360.5 305.3 333.1 326.6 312.7 374.0 318.9 325.6 318.1 311.7 325.4 323.6 336.9 316.7 315.2 324.7 314.0 377.3 321.6 241.4 380.1 172.0 179.1 196.0 212.7 202.2 203.1 207.1 213.2 183.6 206.1 213.8 321.5 170.8 179.3 206.9 193.4 211.5 218.7 2.0 6.8 21.4 103.1 122.3 41.7 1.9 4.8 4.4 1.7 6.0 21.6 1.7 5.8 28.7 134.5 109.4 104.0 1.5 4.6 12.5 41.3 3.5 3.7 2.8 2.3 2.7 5.9 1.9 2.4 2.4 4.2 2.9 7.8 3.9 2.7 2.8 2.7 3.9 3.3 680.2 619.6 515.3 638.3 594.5 571.1 761.3 603.8 583.7 570.0 583.1 591.2 652.6 674.4 651.3 578.4 619.3 612.0 753.2 629.9 18.5 69.1 9.1 110.6 45.3 31.3 54.7 40.9 27.3 22.6 36.6 38.4 97.7 83.4 111.1 22.6 27.0 39.7 42.2 40.9 600.7 472.5 463.1 480.6 492.5 487.2 643.7 483.9 492.1 496.7 487.0 491.7 497.7 508.3 495.1 506.0 527.9 510.2 647.4 513.6 50.3 73.5 40.9 46.4 52.7 51.0 56.3 71.2 62.1 49.6 52.9 59.0 55.7 80.3 42.5 48.3 59.8 60.2 60.3 68.0 10.7 4.5 2.2 0.7 4.1 1.5 6.6 7.8 2.2 1.1 6.7 2.2 1.5 2.4 2.6 1.6 4.5 1.9 3.2 7.5 96.1 349.9 57.4 60.5 57.4 65.6 84.1 87.4 87.5 101.9 108.1 119.3 147.4 317.3 73.6 60.9 58.3 58.5 67.2 86.7 81.1 100.9 12.8 6.3 16.8 17.1 27.8 68.0 22.7 28.1 35.1 82.3 68.2 109.4 18.8 14.1 14.3 18.6 19.5 51.9 32.9 60.1 32.1 84.4 32.4 32.4 24.1 39.1 16.7 29.1 22.8 52.4 33.4 40.3 43.3 87.0 20.3 19.6 30.2 17.9 - - - - - - - - - - - - - - - - - - - - Acronyms Acronyms in the text AJPES - Agency of the Republic of Slovenia for Public Legal Records and Related Services, BCI - Business Climate Indicator, GDP - Gross Domestic Product, BS - Bank of Slovenia, IAADP - Internal Administrative Affairs Directorate, ECB - European Central Bank, EC - European Commission, ELES - Electro Slovenia, ESI - Economic Sentiment Indicator, HICP - Harmonized Index of Consumer Prices, MF - Ministry of Finance, MI - Ministry of the Interior, NFI - Non-monetary Financial Institutions, OECD - Organization for Economic Cooperation and Development, PMI - Purchasing Managers Indice, RS - RS - Republic of Slovenia, SCA - Standard Classification of Activities, SITC - Standard International Trade Classification, SORS - Statistical Office of the Republic of Slovenia, PPA - Public Payments Administration of the Republic of Slovenia, IMAD - Institute of Macroeconomic Analysis and Development, WEF - World Economic Forum, ZEW - Centre for European Economic Research, ESS - Employment Service of Slovenia Acronyms of Standard Classification of Activities (SCA) A-Agriculture, forestry and fishing, B-Mining and quarrying, C-Manufacturing, 10-Manufacture of food products, 11-Manufacture of beverages, 12-Manufacture of tobacco products, 13-Manufacture of textiles, 14-Manufacture of wearing apparel, 15-Manufacture of leather and related products, 16- Manufacture of wood and of products of wood and cork, except furniture, manufacture of articles of straw and plaiting materials, 17-Manufacture of paper and paper products, 18-Printing and reproduction of recorded media, 19 - Manufacture of coke and refined petroleum products, 20-Manufacture of chemicals and chemical products, 21-Manufacture of basic pharmaceutical products and pharmaceutical preparations, 22-Manufacture of rubber and plastic products, 23- Manufacture of other non-metallic mineral products, 24-Manufacture of basic metals, 25-Manufacture of fabricated metal products, except machinery and equipment, 26-Manufacture of computer, electronic and optical products, 27-Manufacture of electrical equipment, 28-Manufacture of machinery and equipment n.e.c., 29- Manufacture of motor vehicles, trailers and semi-trailers, 30-Manufacture of other transport equipment, 31-Manufacture of furniture, 32-Other manufacturing, 33-Repair and installation of machinery and equipment, D-Electricity,gas,steam and air conditioning supply,E-Water supplysewerage, waste management and remediationactivities, F-Construction, G-Wholesale and retail trade, repair of motor vehicles and motorcycles, H-Transportation and storage, I-Accommodation and food service activities, J- Information and communication, K- Financial and insurance activities, L-Real estate activities, M-Professional, scientific and technical activities, N-Administrative and support service activities, O-Public administration and defence, compulsory social security, P-Education, Q-Human health and social work activities, R-Arts, entertainment and recreation, S-Other service activities, T-Activities of households as employers, undifferentiated goods - and services - producing activities of households for own use, U-Activities of extraterritorial organizations and bodies. Acronyms of Countries AT-Austria, BA-Bosnia and Herzegovina, BE-Belgium, BG-Bulgaria, BY-Belarus, CH-Switzerland, HR-Croatia, CZ-Czech Republic, CY-Cyprus, DE-Germany, DK-Denmark, ES-Spain, EE-Estonia, GR-Greece, FR-France, FI-Finland, HU-Hungary, IT-Italy, IL-Israel, IE-Ireland, JP-Japan, LU-Luxembourg, LT-Lithuania, LV-Latvia, MT-Malta, NL-Netherlands, NO-Norway, PL-Poland, PT-Portugal, RO-Romania, RS-Republic of Serbia, RU-Russia, SE-Sweden, SI-Slovenia, SK-Slovakia, TR-Turkey, UA-Ukraine, UK-United Kingdom, US-United States of America.