Business

08 Jun 2020, 11:58 AM

STA, 8 June 2020 - Slovenia's central bank forecasts that Slovenia's economy will contract by 6.5% this year before it bounces back to 4.9% growth in 2021 and 3.6% in 2022. This is however the baseline forecast, there are also two alternative scenarios that factor in the gravity of the coronavirus crisis.

Under the positive scenario, the economy would contract by just 4% this year and expand by over 7% in the next two years; under the negative scenario the economy would contract by 10% this year, followed by stagnation in 2021 and a slow recovery in 2022.

Vice-governor Jožef Bradeško said the baseline scenarios accounted for less stringent lockdown measures and assumed the crisis will last through the first half of next year, when a medical solution is expected.

Under this scenario, "the positive effects outweigh the negative effects of harsher restrictive measures and the relatively high share of tourism," he said.

The baseline scenario assumes that private consumption will contract by 6.6% this year, which will be partially offset by a 3.5% increase in public spending.

Private consumption is expected to pick up next year, but government spending is projected to climb down.

Banka Slovenije's head analyst Arjana Brezigar Masten said domestic fiscal policy measures were an important component of the forecast since they offset the decline in private spending.

Absent stimulus measures, GDP would decline by a further three percentage points, she said.

Investments are expected to contract sharply this year, by 14.4%. Exports of goods and services are to decline by nearly 12.6% and imports by 13.6%.

A robust recovery of exports and imports is projected for 2021 and 2022, but it is thought domestic spending will be the main engine of growth going forward.

Employment is forecast to contract by almost 2%, which will lead to an increase in the average survey unemployment rate to 6% from 4.5% last year.

Inflation is expected to drop to zero this year before rising to over 1% in the next two years.

Consumer prices will be held down by low oil prices, which will offset the projected increase in food prices. Additionally, prices will be weighed down by poorer demand and external deflation pressure.

During the forecast period Slovenia will initially see a deterioration of public finances, with the general government deficit expected to exceed 8% of GDP this year.

The central bank believes the fiscal position will improve given that the shock will be only temporary, but general government debt will remain relatively high.

Central bank analysts estimate the existing stimulus measures at 5% of GDP.

05 Jun 2020, 14:25 PM

RTV Slovenia, the national broadcaster, reports that Rogaška Crystal, Fraport (Ljubljana International Airport) and Hoedlmayr Logistics (based in Logatec) have all announced layoffs which will occur in the near future.

Rogaška Crystal (Steklarna Rogaška), which was facing a lack of orders even before the crisis and mostly relies on exports to the United States, where the industry has been hit severely by the recent events of social unrest, first announced that 200 workers would lose their jobs, but managed to reduce the number to 138 layoffs. Eighty-one of its workers will lose their jobs by the end of this week, and 56 will have to leave the company in September.

Job losses have also been announced in Fraport (Ljubljana International Airport), which is expected to lay off 120 people, which amounts to around a quarter of all of the airport’s employees, according to unofficial information.

Since cars sales almost completely halted during the lockdown, Hoedlmayr Logistics, a car transportation company, also announced plans to lay off 113 of their 166 employees. Most of these are foreign workers, with just 22 Slovenian citizens.

Already in April Hisense, the Chinese owner of Gorenje, a major European manufacturer of home appliances with its main production facility located in Velenje, announced that about 1,000 of its staff would lose their jobs. Later on in May, Revoz, the Renault subsidiary located in Novo mesto, also announced layoffs for 400 of its workers.

Data from the Employment Service of Slovenia suggest that about 13,000 people lost their jobs during coronavirus shutdown, with the number of people currently looking for employment standing at about 90,000.

The lowest number of registered unemployed in Slovenia since 2004 was 59,303 job seekers in September 2008, and the highest 129,843 job seekers in January 2014, according to the Statistics Office database.

05 Jun 2020, 08:39 AM

STA, 4 June 2020 - The National Bureau of Investigation (NBI) is conducting house searches in the Kranj and Ljubljana areas over suspicion of abuse of office or rights in business, with the news portal 24ur reporting that these are related to the bankruptcy of the air carrier Adria Airways.

The website of the commercial broadcaster POP TV noted on Thursday that, as Adria Airways was about to go bust in late 2019, there were suspicions of wrongdoings and lack of transparency in the company's management and operations.

It was reported by the newspaper Delo in February that the police were investigating suspicion of abuse of office and business fraud, adding that some 5,000 US dollars had also gone missing from the company's safe.

According to 24ur, official Adria Airways receiver Janez Pustatičnik has confirmed that the house searches are being carried out at the company's headquarters.

The General Police Administration told the STA today that NBI investigators were visiting residential, commercial and other premises in the areas of Kranj and Ljubljana in the ownership of one legal entity and two individuals.

Two house searches are still under way and one has been concluded. Pre-trial investigation is being conducted against two foreign individuals.

Already in March, Pustatičnik hired an audit firm to analyse the company's documentation looking for evidence of potential misdeeds by the company's previous owners and management.

He said at the time that focus would be on collecting evidence of potential liability of the former management and detecting "avoidable actions" that may have resulted in asset stripping.

The spotlight will be on the German turnaround fund 4K Invest, which bought the company from the state in 2016 and oversaw a series of business decisions that led to the company's bankruptcy.

According to 24ur, the suspicious dealings include transactions to tax havens worth millions of euros, and conducting business through Malta.

An investigative portal has reported, however, that the group of companies around 4K Invest has been liquidated, with all traces of their transactions, many to tax havens, erased from the public domain.

All our stories on Adria Airways

03 Jun 2020, 13:36 PM

STA, 3 June 2020 - The Administrative Court has upheld the decision of the Slovenian Environment Agency (ARSO) that an environmental impact assessment is needed before any permits can be issued for hydraulic fracturing planned by British company Ascent Resources at the Petišovci gas field in the north-east of Slovenia.

The London-based oil and gas exploration company, which is operating in Slovenia with its partner Geoenergo, announced the ruling on Tuesday.

It added that it is "in the process of beginning preparations for submission of an environmental impact assessment, alongside the stimulation and field development planning which was initiated recently".

ARSO said in March last year that the plans for hydraulic fracturing required an environmental impact assessment and this was confirmed in June last year by the Environment Ministry. Geoenergo therefore turned to the Administrative Court, which has upheld the decision.

"The court decision, along with earlier action by the state, will constitute important evidence to support the claim the company intends to bring against Slovenia under the Energy Charter Treaty," Ascent Resources added on Tuesday in a reference to plans to demand EUR 50 million in damages from Slovenia for delays in the development of the gas field.

Geoenergo, which is co-owned by the Slovenian state-controlled energy companies Petrol and Nafta Lendava and has been striving for the project together with Ascent Resources since May 2017, expressed on Wednesday regret over the court's decision.

It assessed that "an environmental impact assessment is not necessary for the planned intervention, one that has already been executed in past on several occasions in line with Slovenian legislation".

Geoenergo, which spoke of a key project "for the development of north-east Slovenia that would provide greater energy independence for Slovenia", added that the ruling would have negative consequences for "what are already unreasonably protracted administrative procedure that prevent the preservation of the existing production of gas".

Meanwhile, Ascent Resources announced for its investors last week that it would hold on to plans for the re-stimulation of its producing wells in Petišovci. It expects to obtain the necessary permits by the end of the year.

Ascent Resources moreover wrote that it has "observed the recent changes introduced by the new Slovenian government and increasingly confident position on the likelihood of the project receiving the permits required for further stimulation".

All our stories on Ascent Resources and Slovenia

01 Jun 2020, 10:18 AM

STA, 31 May 2020 - Ultralight aircraft made by the Ajdovščina-based Pipistrel have joined the US Special Operations Command's (SOCOM) fleet as low-cost, high-endurance unmanned aerial vehicles, in what is seen as a major step for the Slovenian company.

The news was revealed by SOCOM last week after seven years of classified collaboration and confirmed by Pipistrel, which said its specially prepared airframes are being used with "sensors to collect full-motion video and signals intelligence".

The company said its surveillance platform can be fitted with a multitude of sensors, with endurance ranging from 8 to more than 30 hours at low, medium and high altitudes, all at a fraction of the cost of conventional solutions.

"It is interesting that the American army and the military aviation industry are the largest exporters of aircraft in the world, but then they come to the small Slovenia and even smaller Ajdovščina for such special aircraft because they cannot make such good ones at such a price themselves," Pipistrel founded and CEO Ivo Boscarol told the STA.

Boscarol acknowledges that the deliveries are part of large, multi-million deals, but said the amounts were subject to trade secrecy.

He expects that interest in this segment of the company's production will grow now that the deliveries have been confirmed.

"In recent days we've received concrete inquiries from the United Arab Emirates and Saudi Arabia for similar aircraft. Working for the US military means working to the highest standards and if they accept you, the product is good and recognized anywhere in the world, be it a friend or foe of the US."

Read more about Pipistrel electric aircraft

29 May 2020, 18:07 PM

STA, 29 May 2020 - The total value of real estate transactions in Slovenia reached a record level last year, estimated at EUR 2.7 billion, as prices continued to grow, albeit at a slower pace than in 2018, shows a report from the Surveying and Mapping Authority (GURS).

GURS, which notes that the record amount should be attributed to several sell-and-lease-back contracts for shopping centres, says in the report that real estate prices exceeded the previous peak in 2008.

According to preliminary data, around 35,500 transactions were recorded last year with their total value approaching EUR 2.7 billion. It is expected that the final number will exceed 36,000 and their total value to stand at EUR 2.7 billion.

This will be the highest annual amount since real estate transactions started to be systematically recorded in 2007.

"Compared to 2015, the number of transactions with real estate was up by more than 20%, while their total value increased by almost 60%," shows the 2019 report.

The record value is attributed to a steep rise in the value of transactions with commercial real estate, which exceeded half a billion euro. Its share in the total value, which usually stands around 10%, was up to more than 20%.

The value of transactions involving residential real estate was up by 10% compared to 2018 to EUR 1.59 billion, of which transactions with apartments amounted to EUR 951 million. The number of transactions was up by 1% to around 10,750.

The number of transactions with second-hand apartments was up by 1.5% to 10,160, while the number of new apartments sold was down by a third to 600. This is well below the annual average for the 2015-2017 period of more than 1,000.

"The number of new apartments which entered the market in 2019 was not even close to sufficient, and a majority of new apartments which will satisfy the demand is expected to built by the end of 2021," the report adds.

Growth of the prices of second-hand apartments slowed down last year, with the average price per square metre standing at EUR 1,850, which is nevertheless 5% more than in 2018, and 28% more than in 2015, when the trend reversed.

In Ljubljana, where the prices of apartments were the highest for the last three years, exceeding the previous peak in 2018, the average price of a square metre in a second-hand apartment was EUR 2,800, up 1% year-on-year.

The average price of a house was EUR 128,000, or 3% less than in 2018 and 19% more than in 2015. Considering the features of houses sold, GURS has estimated that their prices at the national level have increased by 15-20% since 2015.

GURS notes that this year, the real estate market will be significantly affected by the coronavirus epidemic, during which "transaction stopped and it is clear that the 2019 trends are history."

27 May 2020, 12:22 PM

At least 500 cultural workers – with the organisers claiming up to 1,000 – gathered in front of the Museum of Contemporary Arts and Ethnographic Museum in Ljubljana this Tuesday to protest against the alleged lack of responsiveness on the part of the Ministry of Culture amid the coronavirus lockdown. Specifically, they protested the end of support for the sector, and the lack of a comprehensive strategy to preserve and promote Slovenian culture, as many other European countries have.

The protesters expressed their dissatisfaction with the Ministry's work by marching in front of its headquarters, where they covered the Ministry's large windows with printed appeals of cultural organisations and individuals.

Related: Cultural Workers Critical of Govt Covid Support

Cultural workers are suffering from the shutdown of all private venues, and thus a loss income from cinemas, concert halls, theatres and so on, as well as the ending of coronavirus aid for the self-employed, while those who usually receive support from the state – publishers, performers and the like – are also under increasing financial pressure.

Some 100,000 people work in the sector, and the organisers of the protest highlighted the fact that the nation’s culture has a significant multiplier effect on the economy, as well as playing a role in diplomacy and soft power.

27 May 2020, 11:51 AM

A reminder that the deadline for the basic income and exemption from contributions is approaching, with June 1st 2020 being the last date self-employed residents whose 2020 income will fall – or is expected to fall – at least 10% compared to 2019 can submit a statement on e-Davki.

Details on how to claim the “corona aid” can be found here.

The next and the final basic income transfer will be on June 10, 2020.

26 May 2020, 20:40 PM

The Financial Administration of the Republic of Slovenia (FURS) reminds taxpayers that the deadline for filling their 2019 tax report is fast approaching.

Due to COVID 19 pandemic, the deadline was extended from March 31st to May 31st this year.

However, since May 31st 2020 is on Sunday, the last day to submit tax reports is in fact June 1st.

Furthermore, taxpayers are required to pay their tax obligations within a 30 day deadline from the submission of their tax return. If they submit their tax return on June 1st, then any eventual tax liabilities must be paid by July 1st at the latest.

26 May 2020, 14:05 PM

STA, 25 May 2020 - The government is not supporting a legislative motion proposing to keep shops closed on Sundays and work-free days even after the end of the coronavirus epidemic. The opposition Left-sponsored bill is currently not appropriate to be discussed in parliament due to the economic fallout of the Covid-19 crisis, said the government on Monday.

Given the economic ramifications of the epidemic, including those affecting commercial activity which accounts for more than 30% of all the revenue of Slovenia's economy, the proposal does not enjoy the government support.

Moreover, the government thinks that social dialogue is the most appropriate way of tackling such issues, said the government's communication office after today's correspondence session.

The bill is so important that it should be also discussed at a session of the Economic and Social Council's, believes the government.

After the Left made the proposal in late April, the party expressed the hope that the bill could be passed by summer considering support expressed from both sides of the political aisle and part of the public.

The Left drafted amendments to the trade act in response to a call by the Trade Union of Shop Assistants in its Labour Day message to keep stores closed on Sundays and public holidays beyond the epidemic with some exceptions.

When the party presented the proposal, ahead of the May Day holidays, Prime Minister Janez Janša expressed support for the idea on Twitter.

Meanwhile, the management of the Slovenian Chamber of Commerce (TZS) strongly opposed the proposal
last week, saying that consumption should be encouraged in such extreme circumstances to boost the economy and measures to preserve jobs should be adopted.

26 May 2020, 14:01 PM

STA, 25 May 2020 - The NLB bank will carry on with optimising its business network by closing ten offices across Slovenia on 15 June. The Mislinja municipality in northern Slovenia, one of the places that will experience the closure first-hand, has protested against the step.

The bank has been citing changed clients' habits and the rise of online and mobile banking as reasons for closing physical offices. During the coronavirus epidemic, digital banking services became even more popular.

NLB believes that such habits will have a long-term impact on bank visits, with people being less likely to frequent the actual offices.

The bank has already started notifying the clients as well as local communities of the step, NLB has told the STA, adding that other offices will step in if needed or a team of mobile bankers will conduct home visits.

Moreover, a NLB mobile office will keep paying visits across the country until the end of the year. The bank also highlighted that its ATMs will remain in places where the offices will be shut down.

The Mislinja community is strongly opposing the closure since the NLB office is the only bank office in the municipality. The locals are up in arms, Mislinja Mayor Bojan Borovnik told the STA, pointing out that the elderly required the vicinity of the office in particular.

Borovnik hopes that the bank's decision is not final. He is also looking into the possibility of another bank opening up an office there.

The Mislinja office was temporarily closed during the epidemic. The bank recently notified the municipality of its permanent closure.

The Koroška regional council has addressed a letter to the bank, protesting over the move and urging NLB not only to keep the office open but also to reopen a couple of offices in northern Slovenia.

Meanwhile, today the bank reopened twelve offices across Slovenia in the wake of a major easing of coronavirus restrictions.

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