Hot topics

Slovenia Business Week no. 13: CCIS: Positive 2005 Economic Trends, Downbeat 2006 Forecasts

Slovenian companies entered 2006 with mixed feelings, as they are rather cautious in their plans and uncertain about the government-sponsored reforms in the field of tax and labour legislation

Slovenian companies entered 2006 with mixed feelings, as they are rather cautious in their plans and uncertain about the government-sponsored reforms in the field of tax and labour legislation, according to the Chamber of Commerce and Industry (CCIS).

Business sentiment will be especially unfavourable in the first half of this year, suggest the results of a survey conducted by the CCIS. The worst results are expected in trade, while there is more optimism in industry.

The 2006-2009 social agreement talks are already underway, however, they are moving ahead very slowly, with the issue of wage policy still unresolved, analysts of the CCIS Economic Outlook and Policy Services have said.

This year's main focus will be on the euro changeover. Although Slovenia, with a 2.5% average inflation and stable prices, meets macroeconomic criteria for the euro adoption, analysts feel it will be of key importance to maintain the achieved macroeconomic balance.

In their view, 2005 economic growth forecasts for Slovenia are good, but not excellent. Annual economic growth of 3.7% in the third quarter of 2005 points to a possible 4% growth for the entire year, with international trade still the main motor of the Slovenian economy.

Meanwhile, last year's investment activity did not meet expectations, especially in equipment, which could enable faster increase of added value and enhance competition on global markets. However, the financing is not the only problem - there is also a lack of good projects, the analysts said.

The CCIS moreover said that wages in 2005 mainly increased due to changes in tax legislation, as net wages rose faster than labour expenses. In real terms, gross wages went up 2.2% last year.

The situation on the labour market is worsening, as the unemployment rate at the end of 2005 already topped the rate in 2004. According to the analysts, the share of unemployed persons with higher education has also been on the increase.

Source: Slovene Press Agency STA

Author: STA