Slovenia the 5th Most Attractive Destination in SEE for German Investors

By , 09 May 2019, 12:07 PM Business
Slovenia the 5th Most Attractive Destination in SEE for German Investors JL Flanner

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STA, 8 May 219 - Slovenia has remained the fifth most attractive destination for German investors among 15 countries of Central and Eastern Europe (CEE), while 80% of German investors would reinvest in the country, which is 16 percentage points less than last year, the latest survey by the Slovenian-German Chamber of Commerce has shown.

Chamber president Gertrud Rantzen said at Wednesday's presentation of the survey that CEE was one of the most important economic regions for Germany, where the country's companies found a lot of partners and investment destinations.

Rantzen noted that Slovenia had kept its ranking in terms of attractiveness for German investments, but that it must not rest on laurels. Slovenia is trailing only the Czech Republic, Poland, Slovakia and Estonia in the region.

"The other countries are not sleeping, some of them have made strong progress and them overtaking Slovenia is only a matter of time," she added.

Slovenia's biggest shortcomings have remained the same - tax burden, tax system and authorities, high labour costs and rigid labour legislation. The situation on the labour market is also deteriorating, as the available labour force is shrinking.

The survey shows that despite the shortcomings of the Slovenian business environment, 80% of German investors would pick the country again as a location for their investments, which is however a drop compared to last year (96%).

Rantzen thus called for better training of employees, a migration policy which would attract foreign experts, and the promotion of apprenticeship. She again called on the government to introduce a cap on social security contributions.

The chamber has also noticed progress in Slovenia in certain fields, with the economic, political and social stability improving.

Investors have assessed the country's economic policy as more predictable, legal security has also improved, and Slovenia is also standing out in terms of infrastructure in the positive sense, Rentzen added.

Slovenia's score in transparency of public procurement and quality of academic education has also improved, and the country decisively leads the 15 countries as the top destination for research and development.

Slovenia has been the fastest growing economy in the region since 2016, with 68% of the surveyed German companies assessing the current economic situation in the country as good, and 28% as satisfactory.

Only 17% of the respondents expect that Slovenia's exports will increase next year, and 62% that they will stay level. "Certain sectors are stagnating, automotive suppliers in particular," said Rentzen.

One-fifth of the surveyed companies want to increase their investments in Slovenia, 52% will keep their investment plans for 2019 as they are. Total German investments in Slovenia are expected to stand at EUR 557 million by 2022.

A majority of the planned investments will go for digitalisation and expansion of production. There will also be more investments in education and training of workforce and the development of products, the survey shows.

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