This Article IV Consultation highlights that the continued structural reforms are key to ensure long-term prosperity, while strengthening the economy’s resilience to shocks. Effective implementation of the recently enacted reforms of vocational training, apprenticeship, and adult education would help address skill shortages, support employment of younger and older people, and boost productivity growth. Macro-financial legacy issues remain in bank and corporate balance sheets, including small and medium enterprises’ nonperforming loans. Structural challenges persist with low productivity growth, skills shortages, high tax wedge, heavy regulatory system, and extensive presence of state-owned enterprises. Policies should focus on fiscal and structural reforms to rebuild fiscal buffers and increase productivity. Slovenia’s external position in 2018 is assessed as substantially stronger than suggested by fundamentals and desirable policies; however the current account is expected to revert toward its norm in the medium term. Continued structural reforms are key to ensure long-term prosperity, while strengthening the economy’s resilience to shocks. Effective implementation of the recently enacted reforms of vocational training, apprenticeship, and adult education would help address skill shortages, support employment of younger and older people, and boost productivity growth.
This paper examines the factors and constraints that affect recent and potential growth in Croatia, as well as policies that can influence it. On current productivity trends, it estimates Croatia's potential growth rate at 4-4½ percent, a result reasonably robust to different methodologies. To sustain growth at a higher rate in line with the authorities' aspirations, the analysis highlights the critical need to improve the business environment through further measures to reduce the administrative burden, legal uncertainties, and corruption. It also emphasizes the importance of attracting more greenfield foreign direct investment, and reforms to reduce the role of the state in the economy through fiscal consolidation and faster privatization.
Slovenia is set to become the first among the new European Union member states to adopt the euro. Executive Directors emphasized the need to implement policies that increase productivity, create an efficient business environment and a flexible labor market, and improve sustainability of public finances in the face of population aging. Labor participation is also relatively low among the older and younger working-age population. To deal with these challenges, the authorities should speed up efforts to raise labor utilization by lowering marginal tax rates, improving the target of social benefits and reducing incentives for early retirement.
This paper provides a background on the key policy challenges for Slovenia in the euro zone. Then, it assesses the discretionary scope to adjust spending and proposes initial steps to enhance budget flexibility so that fiscal adjustment can be targeted on relatively inefficient spending. This study also discusses the long-term fiscal sustainability position of Slovenia using a generational accounting framework. A simulation of retirement incentives suggests that the pension system will encourage individuals to retire earlier than the statutory full pensionable age. These incentives are stronger for low-income earners.
In recent years, the IMF has released a growing number of reports and other documents covering economic and financial developments and trends in member countries. Each report, prepared by a staff team after discussions with government officials, is published at the option of the member country.
Mr. Guorong Jiang, Mr. Peter Doyle, and Louis Kuijs
The paper discusses factors likely to shape the nature and pace of economic growth of five Central European transition countries now engaged in accession to the European Union. It is organized around the standard growth accounting framework. The paper reviews the growth of these countries since 1990 and draws lessons from the growth experiences of other regions since the 1950s, shedding light on long-term growth prospects for these countries. It discusses a set of growth calculations and highlights the key uncertainties in them.
International Monetary Fund. External Relations Dept.
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This paper reviews economic developments in the Republic of Slovenia during 1990–97. Output began to recover in 1993, and by 1996, Slovenia’s GDP was back to its pre-independence level. Domestic demand was the main driving force, while the growth of exports fluctuated in line with the business cycle in Western Europe and changes in competitiveness. A strong external contribution brought the GDP growth rate to a peak of 5.3 percent in 1994 but it subsequently slowed, reaching 3.1 percent in 1996. GDP growth picked up again in 1997.