Economy of Slovenia

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Economy of Slovenia
Ljubljana 070.JPG
Rank 82nd (nominal) / 87th (PPP)
Currency € (EUR)
1 January – 31 December
Statistics
GDP

Decrease$57.4 billion PPP

[1]
GDP growth
Decrease-2.6% (Real, 2013 est.)
GDP per capita
Decrease$27,400 (PPP, 2013 est.)
Labour force
Decrease905,000 (2014 est.)
Labour force by occupation
agriculture: 2.2%,
industry: 35%,
services: 62.8%,
(2009 est.)
Unemployment Increase13.7% (2014 est.)[1]
Main industries
ferrous metallurgy and aluminum products, lead and zinc smelting; electronics (including military electronics), trucks, automobiles, electric power equipment, wood products, textiles, chemicals, machine tools [1]
35th[2]
External
Exports Decrease$28.42 billion (2012 est.)[1]
Export goods
manufactured goods, machinery and transport equipment, chemicals, food [1]
Main export partners
 Germany 20.0%
 Italy 12.0%
 Austria 7.9%
 Croatia 6.2%
 France 4.8%
 Russia 4.6% (2012 est.)[3]
Imports Decrease$29.83 billion (2012 est.)[1]
Import goods
machinery and transport equipment, manufactured goods, chemicals, fuels and lubricants, food
Main import partners
 Italy 16.3%
 Germany 16.2%
 Austria 10.4%
 Croatia 4.8%
 Hungary 4.0% (2012 est.)[4]
FDI stock
Increase17.91 billion (31 December 2012 est.)[1]
Public finances
Increase58.8% of GDP (2013 est.)
Revenues Decrease$20.5 billion (2012 est.)[1]
Expenses Decrease$22.59 billion (2012 est.)[1]
Foreign reserves
Increase$1.154 billion (31 December 2012 est.)[1]
Main data source: CIA World Fact Book
All values, unless otherwise stated, are in US dollars.
GNI per capita:
  Slovenia ($23,520)
  Higher GNI per capita compared to Slovenia
  Lower GNI per capita compared to Slovenia

Slovenia today is a developed country that enjoys prosperity and stability as well as a GDP per capita at 88% of the EU27 average.[9] It was the first new member of the European Union to adopt the euro as a currency in January 2007 and it has been a member of the Organisation for Economic Co-operation and Development since 2010.[10]

Slovenia has a highly educated workforce, well-developed infrastructure, and is situated at a major transport crossroad.[10] On the other hand, the level of foreign direct investment is one of the lowest and the Slovenian economy has been severely hurt by the European economic crisis, which started in late 2000s.[10] Almost two thirds of the working population are employed in services.[1]

History[edit]

Although it comprised only about one-eleventh of Yugoslavia's total population, it was the most productive of the Yugoslav republics, accounting for one-fifth of its GDP and one-third of its exports.[11] It thus gained independence in 1991 with an already relatively prosperous economy and strong market ties to the West.

Since that time it has vigorously pursued diversification of its trade with the West and integration into Western and transatlantic institutions. Slovenia is a founding member of the World Trade Organization, joined CEFTA in 1996, and joined the European Union on 1 May 2004. In June 2004 it joined the European Exchange Rate Mechanism. The euro was introduced at the beginning of 2007 and circulated alongside the tolar until 14 January 2007. Slovenia also participates in SECI (Southeast European Cooperation Initiative), as well as in the Central European Initiative, the Royaumont Process, and the Black Sea Economic Council.

In the late 2000s economic crisis, the Slovenian economy suffered a severe setback. In 2009 the Slovenian GDP per capita shrunk by −7.9 %, which was the biggest fall in the European Union after the Baltic countries and Finland.[citation needed] After a slow recovery from the 2009 recession thanks to exports,[12] the economy of Slovenia again slid into recession in the last quarter of 2011.[13] This has been attributed to the fall in domestic consumption and the slowdown in growth of exports.[13] Slovenia mainly exports to countries of the eurozone.[10] The reasons for the decrease in domestic consumption have been multiple: fiscal austerity, the freeze on budget expenditure in the final months of 2011,[14] a failure in the efforts to implement economic reforms, inappropriate financing, and the decrease in exports.[15] In addition the construction industry was severely hit in 2010 and 2011.[13]

Trade[edit]

Slovenia's trade is orientated towards other EU countries, mainly Germany, Austria, Italy, and France. This is the result of a wholesale reorientation of trade toward the West and the growing markets of central and eastern Europe in the face of the collapse of its Yugoslav markets. Slovenia's economy is highly dependent on foreign trade. Trade equals about 120% of GDP (exports and imports combined).[clarification needed] About two-thirds of Slovenia's trade is with other EU members.

This high level of openness makes it extremely sensitive to economic conditions in its main trading partners and changes in its international price competitiveness. However, despite the economic slowdown in Europe in 2001-03, Slovenia maintained a 3% GDP growth. Keeping labour costs in line with productivity is thus a key challenge for Slovenia's economic well-being, and Slovenian firms have responded by specializing in mid- to high-tech manufacturing. Industry and construction comprise about one quarter of GDP. As in most industrial economies, services make up an increasing share of output (57.1 percent), notably in financial services.

Economic performance[edit]

The traditional primary industries of agriculture, forestry, and fishing comprise a comparatively low 2.5 percent of GDP and engage only 6 percent of the population. The average farm is only 5.5 hectares. Part of Slovenia lies in the Alpe-Adria bioregion, which is currently involved in a major initiative in organic farming. Between 1998 and 2003, the organic sector grew from less than 0.1% of Slovenian agriculture to roughly the European Union average of 3.3%.[16]

Public finances have shown a deficit in recent years. This averaged around $650 million per annum between 1999 and 2007, however this amounted to less than 23 percent of GDP.[17] There was a slight surplus in 2008 with revenues totalling $23.16 billion and expenditures $22.93 billion.[18] Government expenditure equalled 38 percent of GDP.[citation needed] As of January 2011, the total national debt of Slovenia was unknown. The Statistical Office of the Republic of Slovenia (SURS) reported it to be (not counting state-guaranteed loans) 19.5 billion euros or 54.2% of GDP at the end of September 2010. According to the data provided by the Slovenian Ministry of Finance in January 2011, it was just below 15 billion euros or 41,6% of the 2009 GDP. However, the Slovenian financial newspaper Finance calculated in January 2011 that it is actually 22.4 billion euros or almost 63% of GDP, surpassing the limit of 60% allowed by the European Union.[19][20] On 12 January 2011, the Slovenian Court of Audit rejected the data reported by the ministry as incorrect and demanded the dismissal of the finance minister Franc Križanič.[21]

Slovenia's traditional anti-inflation policy relied heavily on capital inflow restrictions. Its privatization process favoured insider purchasers and prescribed long lag time on share trading, complicated by a cultural wariness of being "bought up" by foreigners. As such, Slovenia has had a number of impediments to foreign participation in its economy. Slovenia has garnered some notable foreign investments, including the investment of $125 million by Goodyear in 1997. At the end of 2008 there was around $11.5 billion of foreign capital in Slovenia. Slovenians had invested $7.5 billion abroad. As of 31 December 2007, the value of shares listed on the Ljubljana Stock Exchange was $29 billion.

Investments from neighboring Croatia have begun in Slovenia. On 1 July 2010, Droga Kolinska was purchased by Atlantic Group of Croatia for 382 million euros. Croatia's Agrocor has intentions of buying Mercator, however since the middle of 2013 and up until now the purchase was unsuccessful. Due to Croatia's decreasing economic health, further investments are not likely.[citation needed]

See also[edit]

References[edit]

  1. ^ a b c d e f g h i j k "Slovenia". "The World Factbook". Central Intelligence Agency, United States. 15 May 2013. Economy. 
  2. ^ "Ease of Doing Business in Slovenia". World Bank. Retrieved 22 October 2012. 
  3. ^ "Exports Partners of Slovenia". CIA World Factbook. 2012. Retrieved 2013-07-24. 
  4. ^ "Import Partners of Slovenia". CIA World Factbook. 2012. Retrieved 2013-07-24. 
  5. ^ "Sovereigns rating list". Standard & Poor's. Retrieved 15 March 2011. 
  6. ^ "Slovenia's Ratings Lowered To 'A+/A-1'; Outlook Negative". Standard & Poor's Financial Services LLC. 13 January 2012. 
  7. ^ Livesey, Ben; Eddings, Cordell (21 February 2012). "Italy, Spain Ratings Cut by Moody’s as U.K. Ranking at Risk". Bloomberg. 
  8. ^ "Fitch Ratings confirmed the euro area, Spain’s AAA rating in six countries". Forex News. 29 January 2012. 
  9. ^ "GDP per capita in PPS - GDP per capita in Purchasing Power Standards (PPS) (EU-27 = 100)". Eurostat. Retrieved 23 November 2009. 
  10. ^ a b c d "Osnovni gospodarski podatki o Sloveniji" [Basic Economic Data about Slovenia] (in Slovene). Embassy of the Republic of Slovenia Vienna. Retrieved 15 March 2012. 
  11. ^ "Background Note: Slovenia". Retrieved 4 May 2009. 
  12. ^ "Slovenia Country Assessment". European Bank for Reconstruction and Development. Retrieved 16 February 2012. 
  13. ^ a b c "Double Dip Recession is the 'Slovenian' Reality". The Slovenia Times. 13 March 2012. 
  14. ^ Cerni, Boris (29 February 2012). "Slovenia’s Economy Falls Into a Recession as Exports Weaken". Bloomberg. 
  15. ^ "Zdrs v recesijo so ekonomisti pričakovali" [The Slid into Recession Was Expected by Economists]. MMC RTV Slovenija (in Slovene) (RTV Slovenija). 29 February 2012. ISSN 1581-372X. 
  16. ^ Food First/Institute for Food and Development Policy | For Land, Liberty, Jobs and Justice
  17. ^ The Economist
  18. ^ https://www.cia.gov/library/publications/the-world-factbook/geos/si.html#Govt
  19. ^ Lipnik, Karel; Monika Weiss (14 January 2011). "Kolikšen je dejansko državni dolg Slovenije?". Finance (Časnik Finance). 
  20. ^ "SURS: Vsi dolgovi države znašajo 22,43 milijarde evrov" [SURS: All the Debts of Slovenia Sum to 22.43 Billion Euros] (in Slovene). MMC RTV Slovenia. 14 January 2011. 
  21. ^ "Auditing Body Demands Dismissal of Finance Minister". Slovenian Press Agency. 12 January 2011.