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Measures Taken in Response to Global Financial and Economic Turmoil in Slovenia

Global financial and economic crisis has been influencing Slovenian economy markedly from late 2008 on. In the 4th quarter of 2008, GDP decreased by 0.8 percent compared to the 4th quarter of 2007. This is the first decrease of GDP after the 2nd quarter of 1993.

For 2009, further deterioration of economic activity is foreseen. Taking into account the recent data on real sector activity and decrease of GDP in the fourth quarter 2008, all the recent macroeconomic forecasts foresee negative economic growth in the year 2009. Among them the IMAD  growth projection is even -4%. IMF Article IV Mission (March 11, 2009 ) expects output to decline in 2009 by at least 1 percent. The risks are on the downside. All institutions forecast a gradual recovery of economic activity, but economic growth is expected to stay substantially below the long-term average. Most institutions forecast that the current-account deficit will decline this year and increase again in 2010.

Nevertheless, in the year 2010 Slovenia shall have somewhat lower deficit than its record level of -5.5% GDP in 2008. All institutions reduced inflation projections for the year 2009 and expect a gradual pick-up next year, but the inflation rate shall remain at a relatively low level. Needless to mention that uncertainties regarding future developments are extremely high.

The Slovenian government began addressing the crisis at its relatively early stage. A series of measures primarily aimed at the financial and business sector have been adopted, the first "initial" package in November and December 2008 and the second package in February 2009.

Due to extreme uncertainty in the external economic environment, the recovery measures in the Republic of Slovenia have been drafted on the basis of comparative experiences with recovery programmes of other EU Member States, in particular those of our most important foreign trade partners. The measures are also in line with the European Commission's recommendation for economic recovery, in the context of which the Members States took measures for helping banks and financial institutions and other measures aimed at boosting economic activities.

Due to further economic deterioration the Government is planning to prepare a 3rd package of measures which will include also plans for medium and long term structural reforms (refocusing of budget expenditure towards a goal oriented budget, modernisation of the pension system, changes in the social expenditure, etc.)

Ministerial Crisis Team

The crisis team drawing up measures to mitigate the financial and economic crisis consists of:

  • Mitja Gaspari, M.A., Minister for Development and European Affairs, Head of the Crisis Team
  • Dr Franci Križanič, Minister of Finance
  • Darja Radić, Mcs, Minister of the Economy
  • Dr Ivan Svetlik, Minister of Labour, Family and Social Affairs
  • Gregor Golobič, Minister of Higher Education, Science and Technology