Republic of Slovenia: Staff Report for the 2009 Article IV Consultation—Informational Annex

This 2009 Article IV Consultation highlights that inflation and the current account deficit in Slovenia are expected to moderate. The main downward risks to growth are lower-than-projected growth in Europe, and a credit crunch in the event that foreign financing of domestic banks dries up. In the medium term, the main challenge is that the economy needs to emerge from the global crisis on a sustainable growth path. Executive Directors have commended the authorities for their swift and decisive policy responses to slower growth and financial sector strains.

Abstract

This 2009 Article IV Consultation highlights that inflation and the current account deficit in Slovenia are expected to moderate. The main downward risks to growth are lower-than-projected growth in Europe, and a credit crunch in the event that foreign financing of domestic banks dries up. In the medium term, the main challenge is that the economy needs to emerge from the global crisis on a sustainable growth path. Executive Directors have commended the authorities for their swift and decisive policy responses to slower growth and financial sector strains.

ANNEX I: SLOVENIA: FUND RELATIONS

(As of March 27, 2009)

I. Membership Status: Joined: 12/14/1992; Article VIII status as from September 1, 1995.

II. General Resources Account

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III. SDR Department

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IV. Projected Payments to Fund1 (SDR Million; based on existing use of resources and present holdings of SDRs):

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V. Exchange Rate Arrangement

Slovenia adopted the euro on January 1, 2007, which floats freely and independently against other currencies. Slovenia has accepted the obligations of Article VIII and maintains an exchange system that is free of restrictions on the making of payments and transfers for current international transactions.

VI. 2009 Article IV Consultation

Slovenia is on the standard 12-month Article IV consultation cycle. The 2009 mission visited Ljubljana during March 2–11, 2009 and held discussions with the Minister of Finance, Governor of the Bank of Slovenia, and other key economic ministers, government officials and representatives of the Parliament, financial sector, labor, business and media. Ms. Maver (Advisor to the Executive Director) attended some of the meetings.

The mission comprised Mr. A. Spilimbergo (Head, RES), Ms. F. Jaumotte and Mr. Y. Xiao (all EUR).

The mission held a press conference on the concluding statement. The authorities have agreed to the publication of the staff report.

VII. FSAP Participation and ROSCs

An FSAP mission took place during November 6–20, 2000. A FSSA report was prepared on April 24, 2001 and published on September 18, 2001 (Country Report No. 01/161).

An FSAP Update mission visited Ljubljana during November 10–21, 2003.

An FSSA report (Country Report No. 04/137) was issued on April 26, 2004.

The fiscal transparency module of the fiscal ROSC was published in June 2002.

VIII. Technical Assistance

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ANNEX II: SLOVENIA: STATISTICAL ISSUES

Data provision is adequate for surveillance purposes.

Special Data Dissemination Standard: Slovenia has subscribed to the Special Data Dissemination Standard (SDDS), meets SDDS specifications, and its metadata are posted on the Fund's Dissemination Standards Bulletin Board on the Internet. http://dsbb.imf.org/Applications/web/sddscountrycategorylist/?strcode=SVN

Real Sector Statistics: The Statistical Office of the Republic of Slovenia (SORS) follows the European System of Accounts 1995 (ESA95). Quarterly GDP estimates by industry and expenditure categories are compiled in both current and constant prices, and are published within 80 days after the reference quarter. In September 2005, the SORS changed the base year for compiling constant prices GDP from 2000 to the previous year's prices and started using the chain-link index methodology.

The SORS compiles the Harmonized Index of Consumer Prices (HICP) for monitoring compliance with the Maastricht inflation criterion. However, price collection is restricted to four cities and their surrounding rural areas. The weights are based on the three-year average of expenditure data for consumer goods from continuous Household Budget Surveys for 2002, 2003, and 2004. It also compiles a retail price index (RPI), which differs from the consumer price index in weights only.

Government Finance Statistics: Slovenian fiscal statistics are timely and of a high quality. The ministry of finance publishes a comprehensive monthly Bulletin of Government Finance, which presents monthly data on the operations of the “state budget” (Budgetary Central Government), local governments, social security (Pension and Health funds), and the consolidated general government. The coverage of general government excludes the operations of extra budgetary funds and own revenues of general government agencies (zavods). However, these operations are small in size. Monthly fiscal indicators are reported for publication in IFS on a timely basis and annual statistics covering general government operations, including the operations of the extra budgetary funds are reported for publication in the Government Finance Statistic Yearbook (GFS Yearbook).

The data published in the Bulletin of Government Finance are on a cash basis and broadly use the analytical framework and classification system of the IMF's 1986 government finance statistics methodology. The data reported for publication in the GFS Yearbook are also on a cash basis but are recast in the analytical framework and classifications of the Manual on Government Finance Statistics 2001 (GFSM 2001).

The Slovenian authorities wish to adopt the GFSM 2001 methodology, which could then be used as a building block for the compilation of the ESA 95-based data jointly by the Ministry of Finance and the SORS for reporting to the European Commission. To assist the Ministry of Finance resolve several classification issues and develop a migration path, a STA technical assistance mission visited Ljubljana in April 2006. Pending the approval of the revision of the law on public finance, Slovenia plans the introduction of a new charts for all public entities based on GFSM 2001. Nevertheless, accrual principles will not yet be introduced for preparation, execution, and accounting of the central, local, and social security fund's budgets.

Money and Banking Statistics: Monetary statistics are timely and of good quality.

Balance of Payments Statistics: Balance of payments data are comprehensive and of high quality. The data have been published in the Balance of Payments Statistics Yearbook since 1993 (with estimates of the international investment position published since 1994). In 2002, the Bank of Slovenia revised the balance of payments statistics going back to 1994; the most significant revisions were related to the income component of the current account and to the other investment component of the financial account.

External Debt Statistics: External debt statistics were revised and brought in line with the SDDS in August 2003. The main change comprised the inclusion of trade credits in the debt data.

Slovenia: Table of Common Indicators Required for Surveillance

As of March 28, 2009

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Includes reserve assets pledged or otherwise encumbered as well as net derivative positions.

Both market-based and officially-determined, including discount rates, money market rates, rates on treasury bills, notes and bonds.

Foreign, domestic bank, and domestic nonbank financing.

The general government consists of the central government (budgetary funds, extra budgetary funds, and social security funds) and state and local governments.

Including currency and maturity composition.

Daily (D), Weekly (W), Monthly (M), Quarterly (Q), Annually (A); Irregular (I); Not Available (NA).

1

When a member has overdue financial obligations outstanding for more than three months, the amount of such arrears will be shown in this section.