STA, 24 September 2020 - IMAD, the government's macroeconomic forecaster, has upgraded its GDP projections for this year. Instead of a 7.6% contraction at the annual level predicted in the summer, it now expects the economy to shrink by 6.7%. However, it warns that uncertainty remains high.

Economic activity is expected to reach pre-pandemic levels by 2022, but only assuming that there is not a new lockdown affecting certain activities, IMAD said in its autumn forecast, released yesterday.

"Were that to happen this year, the contraction would accelerate by two percentage points, while bankruptcies and higher unemployment would slow down the recovery in the coming years," IMAD director Maja Bednaš wrote.

The upgrade is underpinned by more favourable forecasts in Slovenia's main trading partners, the adoption of the EU recovery deal, and an improvement of confidence indicators from May to July.

Economic activity has already picked up, but IMAD warns it will be uneven across industries.

Exports and imports are expected to contract at double-digit rates this year before recovering at a rate just below 10% in 2021 and slightly under 7% in 2022.

Private spending is expected to contract by 6.6% this year and grow by 4.7% in 2021 and 3% in 2022.

The unemployment rate, projected to hit 9.1% this year, is expected to increase slightly in 2021 before declining to 8.5% in 2022.

Gross wages are projected to grow across the entire three-year period.

And while emphasising that the uncertainty remains high, IMAD said that the recovery could accelerate beyond current predictions in the event a vaccine is put to broad use or the novel coronavirus is sustainably contained in another way.

IMAD assumes that stimulus measures in Slovenia "significantly cushioned" the consequences of the pandemic. Without them, the contraction would have been three percentage points deeper.

The Slovenian economy is forecast to grow by 5.1% next year and by 3.7% in 2022, as all components of GDP are expected to recover, while government spending eases.

Investments, exports, imports and private consumption are projected to return to pre-crisis levels in 2022.

The government was informed about the forecast at Wednesday's session and will include the projections in its budget plans for the next two years.

STA, 24 September 2020 - Mercator Group sales revenue increased by 4.4% in the first half of 2020 compared to the same period last year, to reach EUR 1.06 billion. Due to the revaluation of property and impairments of other assets, and the effects of Covid-19, the group posted a loss of EUR 69.2 million in the January-June period.

These factors excluded, the group would record a profit of EUR 86,000, reads a press release published on Thursday.

Consistently with the international accounting standards, revaluation of property on the one hand resulted in an increase of equity of EUR 23.3 million, while on the other hand it had a negative effect of EUR 69 million on the group's operating profit.

Despite the property revaluation, Mercator Group remains one of the largest property owners in Slovenia and the region with the total value of its land, buildings, and investment property amounting to EUR 1 billion.

"Despite the explicitly negative effects of the epidemic, Mercator Group succeeded in sustaining the positive trends especially in its core activity - fast-moving consumer goods retail," the group said.

Profit before tax, depreciation and amortisation (EBITDA) was up by 1.7% year on year to EUR 83.4 million, which the group says was achieved by "strictly executing the value creation plan initiatives" to offset all negative effects on its regular operations and performance.

Among the latter, the group listed higher labour costs due to the increase of minimum wage in Slovenia, payment of bonuses or allowances for employees working in extraordinary circumstances during the epidemic, as well as an increase in other costs resulting from epidemic-related restrictions and lockdowns in respective markets.

The company Poslovni Sistem Mercator, Mercator Group's largest company, saw its core activity sales revenue increase by 8.2% compared to the same period last year, while its total sales revenue rose by 4.8% to EUR 616.2 million.

The group recorded the biggest rise in revenue in the first half of the year in Bosnia and Herzegovina (by 7.8%). In Serbia, revenue was up by 5.1%, while in Montenegro it was down by 1%.

In Croatia, where Mercator is active only in the real estate business, which was strongly affected by the epidemic, revenue dropped by 14.5%.

Tomislav Čizmić, president of Mercator's management board, said that the success in the core activity was the result of a "timely, responsible, systematic and comprehensive preparation for the crisis".

He also stressed that the European Commission's giving the Croatian group Fortenova a concentration approval for Mercator earlier this week was an "extremely important step" towards the transfer of the Slovenian retailer from insolvent Agrokor to its successor Fortenova.

"The strong owner will enable Mercator's further growth and development and support Mercator's strategic projects, including a EUR 130 million investment in a new logistics centre in Ljubljana," he said.

STA, 23 September 2020 - The prices of residential properties in Slovenia in the second quarter of 2020 were up 1.9% compared to the first quarter, and 5.2% higher than in the same period last year, the Statistics Office said. But transactions were significantly lower, with the total value of all real estate sold being the lowest since the first quarter of 2015.

The prices of new apartments and houses were up by 7.1% compared to the previous quarter.

After dropping by 0.3% in the first quarter, the prices of new apartments jumped by 7.5% in the second. New houses were also 2.6% costlier than in the first quarter.

The prices of used homes rose by 1.4% in quarterly comparison. This means 1.6% higher prices for used apartments, and 1% for houses.

Family properties were on average 5.2% costlier in the second quarter of this year than in the second quarter of 2019. Up the most were the prices of new family houses (by 23.6%) and used apartments outside Ljubljana (by 7.8%). Meanwhile, a notable drop was recorded in the prices of used apartments in Maribor (by 1.2%).

The total value of all residential real estate sold in the second quarter reached EUR 229 million, which is some EUR 60 million less than in the first quarter.

This is also the lowest total value of all residential real estate sold since the first quarter of 2015, when sales stood at EUR 207.

The Statistics Office partly attributes the drop in transactions to the Covid-19 epidemic, which virtually stopped all activity on the Slovenian real estate market.

A total of 2,161 units of used residential real estate were sold in the second quarter, in the total value of EUR 220 million, which is almost half of the figure recorded in the same period last year.

Only 55 pieces of new residential real estate worth EUR 10 million in total were sold in the second quarter, while in the first 76 were sold worth EUR 14 million.

More data on house prices in Slovenia

STA, 21 September 2020 - The Economic Development and Technology Ministry presented on Monday a draft of industrial strategy for 2021-2030, which looks to create the conditions for restructuring Slovenia's industrial sector into an industry of knowledge and innovativeness for new and better jobs.

Presenting the document at a conference in Brdo pri Kranju, State Secretary Simon Zajc said that it featured well thought-through and effective measures which would provide the industry with additional development momentum.

The basic purpose is to set up guidelines for industrial development, which would serve as basis for support measures, he said, adding that one of the key tasks should be connecting value chains, companies of various sizes and knowledge institutions with other stakeholders.

The government wants to create conditions for a knowledge- and innovativeness-based industry to secure new and better jobs. "We want to realise the vision of Slovenia's industrial development as green, creative and smart."

The principal indicator of the Slovenian industrial strategy is labour productivity, which the ministry wants to reach EUR 66,000 in added value per employee by 2030. The intermediate goal for 2025 has been set at EUR 60,000.

What is key for green development is resource productivity, with the goal being to create as much added value as possible with the expenditure of raw materials and other resources, the document says.

The innovation indicator is key when it comes to creative development, and the Digital Economy and Society Index (DESI), which measures progress of EU member states in digital competitiveness, is the main indicator for smart development.

From the aspect of green development, transition to circular economy, decarbonisation of the energy-intensive industry, sustainable mobility and industry based on wood and other natural materials are of key importance.

As for creative development, the strategy wants to create a favourable environment for innovation, including support for nanotechnology innovation.

In smart development, Zajc pointed to digitalisation and support for the entire cycle of research and development, saying that particular attention would be paid to internationalisation.

The strategy will be in public consultation until 16 October.

STA, 16 September 2020 - Sweeping tax cuts and simplification of administrative procedures are at the core of a deregulation plan proposed by the strategic council for debureaucratization, a government advisory body. Ivan Simič, the chair of the council, says lower taxes would lead to higher budget revenue.

"We've made sure the revenue shortfall is as low as possible, but with some adjustments we would in fact secure higher revenue," Simič told the press on Wednesday.

There are almost thirty proposals concerning taxes, including an annual cap on social security contributions for those with a monthly salary of EUR 6,000 or more, which Simič said garnered the most interest when it was presented to coalition partners on Tuesday.

The group also proposes lower capital gains and rental income tax (25% instead of 27.5%), an increase in the general tax credit to EUR 4,000 from EUR 3,500, and the abolition of a tax on luxury vehicles.

A new 10% tax rate has been proposed for income in excess of EUR 1 million. Simič said the new tax bracket would be an attractive proposition for Slovenian professional athletes and foreign athletes who may thus pick Slovenia as their tax domicile.

Similarly, the group proposes a "golden visa" for foreigners who would invest a certain amount of money in Slovenia; the current proposal is an investment in excess of EUR 1 million.

On the other end of the ledger, some sole proprietors would pay higher contributions and taxes, and all interest would be taxed as capital gains; at present only interest in excess of EUR 1,000 is subject to capital gains tax.

It has also been proposed that all employees be entitled to commuting costs at a rate of 10 cents per kilometre. At present the cost of the cheapest public transportation option is recognised.

According to the group, the vast majority of employees would thus get higher commuting costs, except those who live in major cities.

In what is potentially a major boon for sports clubs and charities, the group proposes that companies be allowed to donate up to 20% of their income, up from 0.5% at the present.

There are many other proposals concerning the simplification of reporting and registration procedures for companies and individuals, in particular when it comes to using data that state institutions can access but currently demand that individuals or companies provide themselves.

"We produce the company registration number and all documents are in one place. We also wish to ensure the management of data on all corporate entities in one registry," Simič said.

Another major set of measures concerns simplifications in the issuing of building and environmental permits.

The opposition Left said that the proposals leaned towards "new tax breaks for the rich", and that instead, the government should secure new tax revenue which would not burden the weakest ones, but property of rich people and corporate income.

The party said in a press release that the government of Janez Janša was apparently taking a direction which would "additionally exhaust the state budget and weaken the public welfare and development infrastructure in the long run."

Instead of taking care for the 90,000 unemployed, the council is worried about owners of luxury cars and a handful of millionaires. "The taxation rate for the rich would be significantly lower than those for the poorest ones."

The proposed increase in the general tax credit to EUR 4,000 would be mostly beneficial to taxpayers with the highest income, and not beneficial at all to the poorest taxpayers, the party added.

"Instead of providing the young and other socially disadvantaged persons with decent and affordable apartments, they will again take care of property owners who make money by leasing their property."

The Left is also critical of the proposed annual cap on social security contributions, as a way to make "concessions to the rich at the expense of the public health and pension purses, at the time when revenue losses are drastic."

One of the rare proposals that go in the right direction, according to the Left, is 20% taxation of income gained with trading in cryptocurrencies.

STA, 13 September 2020 - The Covid-19 epidemic has greatly affected small businesses. The biggest changes, according to respondents in a survey by Mastercard, were in orders. Many also face liquidity problems, payment delays, difficulties in supplying materials, and changing customer expectations regarding prices.

As many as seven out of ten small businesses said that they face liquidity problems as a result of the Covid-19 epidemic at least occasionally, and 36% of them were already looking for credit options to overcome their problems.

When asked about how they plan to overcome liquidity problems, the opinions were divided - 23% would opt for a loan, 27% for a credit card limit, and half of the respondents are still undecided.

When asked about changes and adjustments to their operations, two-thirds of respondents said they had bought masks, disinfectants and other protective equipment, and just under a third had obtained financial assistance from the state.

Many also sought the advice of their peers and others in the industry, and almost a fifth attended online seminars and trainings, according to a survey of 459 members of the Chamber of Trade Craft and Small Business of Slovenia, conducted by Mediana in August.

Thirteen percent of the respondents decided to establish new or supplement existing sales channels, and only 7% said they had added new payment options.

The study has shown that more and more customers demand the option to pay by card. As many as one-fifth of the respondents said that customers had called in advance and enquired about the possibility of paying by card, and three out of ten customers actually refused the service because it was not possible.

24 September 2020 - A cornerstone-laying ceremony was held today in front of the Supernova Ljubljana Rudnik shopping centre, marking the beginning of a new phase of development – the phase of expansion and complete modernisation of the existing centre. At the same time, the construction of a joint parking garage also began in cooperation with E. Leclerc.

The ceremonial event marking the beginning of construction was, among others, attended by Deputy Prime Minister of the Republic of Slovenia and Minister of Economic Development and Technology Zdravko Počivalšek, Mayor of Ljubljana Zoran Janković, founder of the Supernova group Dr. Frank Philipp Albert, founder of the MTK Group, a partner company of the Supernova Group, Tilmar Hansen and the Ambassador of France to Slovenia, Florence Ferrari.

In the opening speech, Dr. Frank Philipp Albert said that by expanding the existing shopping centre and building the new parking garage they want to become the most modern shopping area in Slovenia together with E. Leclerc:

After years of coordinating with our neighbour E. Leclerc, we finally joined forces and came together. We are in the process of building the largest parking garage in Slovenia, which will offer to its visitors more than 1,800 parking spaces. And after the completion of works on the parking garage, we are planning to start the renovation of the centre. When all the works will be completed, Supernova will become number one in terms of number of stores. We will have the most modern cinema in Slovenia, many restaurants and new retail brands. Regarding our investment, we received support by both the city and state authorities. The total investment in the expansion will amount to 70 million euros. I would also like to thank the Slovenian Railways, which will open a new railway station nearby for an even better connection.

Deputy Prime Minister of the Republic of Slovenia and the Minister of Economic Development and Technology Zdravko Počivalšek welcomed the large investment:

I am glad that the investors of the Supernova project have recognized the opportunities offered by our country. Today's event is, among other things, a sign that, despite the situation caused by an epidemic, new investments can and must continue. At the same time, this is a period of looking for new opportunities and mechanisms to restart the economy.

The fact that you are planning to employ 800 people with opening the new part of the centre is very encouraging, both in terms of growth and development of your shopping centre, as well as in terms of employment and creating job opportunities. Especially in this post-epidemiological period. I would like to thank the investors for their important contribution to the development of Ljubljana, raising the quality of life of the local population and their visible contribution to the development of the Slovenian economy.

Mayor of Ljubljana, Zoran Janković (left) and Minister of Economic Development and Technology Zdravko Počivalšek (right)

 The Mayor of Ljubljana, Zoran Janković, who is very optimistic about such large investment in his municipality, added:

I am glad that so many people gathered at the event, which represents such a high investment. Because of this investment, many people will be employed. I am looking forward to the opening and I am convinced that with this project, Rudnik will finally become one of Ljubljana’s socialising centres.

He further added that the parking garage will be also welcomed by everyone who drives to Ljubljana from other parts of Slovenia:

With the new parking garage, we will also get a new P + R parking lot. This way, everyone who comes from other parts of Slovenia will be able to leave their car here and go to the centre by bus, thus relieving the city centre of additional traffic.

The extension will create 800 new jobs in Ljubljana

The total value of the investment of the expansion of Supernova Ljubljana Rudnik for additional 20,000 square meters will amount to €70 million, and the opening of a new part of the centre will create 800 new jobs. The contractor will be the company Strabag, and the completion of all works is planned for 2022.

The newly built part will be fully integrated with the existing centre. The total sales area of this unique shopping concept will cover 50,000 square meters, while the whole building will stand on 65,000 square meters of land.

After the upgrade, Supernova Ljubljana Rudnik will become one of the largest and most modern shopping centres in Slovenia. With an additional 60 stores, spread over two floors, it will have a total of 130 outlets of well-known domestic and global brands.

The expansion project will take place in several phases of construction. Firstly, work will begin on the construction of a parking garage and then continue on the expansion of the Supernova Ljubljana Rudnik shopping centre.

The semi-open type parking garage will be built next to the part of the existing parking lot between Supernova and E. Leclerc, while there will also be a new parking lot on the roof of the existing centre and its extended part. The parking garage, which will have 1,800 parking spaces, will be spread over four floors and be built according to the latest environmental and safety standards, with indoor and outdoor lighting, as well as a “green façade”.

The construction works of the joint parking garage started in mid-July, and it will provide direct access for visitors of both shopping centres. Completion of the first phase of construction of the parking garage is planned by the end of November 2020, when the part of the garage will also be open to visitors, and the final construction of the parking garage is planned for March 2021.

Grand opening with a rich offer and the most modern cinema in 2022

Also planned for March 2021 are works for updating and refreshing the interior and exterior of the existing centre, expanding it and building a parking lot on its roof. During construction, a sufficient number of parking spaces will be provided for visitors to both centres. Upon completion, the entire complex will have more than 2,500 parking spaces. The opening of the new Supernova Ljubljana Rudnik centre is planned for the second quarter of 2022.

The unique concept of Supernova Ljubljana Rudnik, which will cover 2,000 square meters, will contain a rich shopping offer and various services and activities, such as outdoor children's playground, jump park, a movie theatre with seven screens and a food court called Gastro Oasis.

With an impressive architectural and modern interior design solution, the updated Supernova Ljubljana Rudnik will provide the visitor with an unforgettable experience of pleasant and relaxed shopping tailored to meet the needs of today’s consumers.

STA, 14 September 2020 - The Powerwall rechargeable energy storage devices by the US electric vehicle maker Tesla will be available to customers in Merkur shops around Slovenia as the hardware retailer has signed a partnership agreement with Tesla's Slovenian partner, the energy system solutions company NGEN.

The agreement was signed in Ljubljana on Tuesday by Blaž Pesjak, the director general of the shop operator Merkur Trgovina, and NGEN director Roman Bernard, with both labelling this a major step towards low-carbon society.

As part of the agreement, Merkur shops around Slovenia will sell the Powerwall systems, which uses lithium-ion batteries, and for which NGEN has developed a platform with which its users can participate in the electricity balancing market.

Related: Tesla Showroom Opens in Ljubljana, Service Centre Expected Soon

Merkur will meanwhile also use the system to optimise its electricity use, and customers will also be able to use Tesla's charging stations with the "powered by NGEN" label on parking lots serving Merkur's shops in Slovenia.

Powerwall and the NGEN's network balancing system are the opportunities for "each individual to enter the energy transformation of society", while cutting costs and even create passive revenue, Pesjak said on the occasion.

Merkur plans to cover the roofs of all of its 23 shops with solar panels, and five solar power stations have been installed so far. Five to ten Powerwall devices will be used in each shop, he added.

"A lot of solar power plants have been installed in Slovenia already," said Bernard, adding that there was great potential also in wind power and that Slovenia should think about transitioning to self-supply in the form of energy storage devices.

In the future, he sees potential of such devices in charging of electric vehicles or in providing supply in the case of disruptions on the side of power distributors. Legislative changes could also help increase demand, he added.

STA, 12 September 2020 - A Tesla Motors showroom has opened in Ljubljana in August, making Tesla automobiles directly accessible to Slovenian customers. By the end of the year, a service centre is expected to open as well.

While Tesla has been present on Slovenian roads for several years now, the cars had to be ordered and picked up abroad, with the closest service centre available in Austria.

That changed in mid-August, when Tesla made the configuration and ordering of their models 3, S and X available in Slovenia as well.

The cars can be ordered online only, but potential buyers can visit the showroom on Leskoškova Street in Ljubljana, where they can examine a vehicle up close and receive advice from sales consultants to help them decide on their preferred configuration.

Tesla Model 3 is currently the only one on display in Ljubljana, but models S and X will become available soon. Test rides will also be possible with all models.

The first vehicles are expected to be delivered in November, when the official Tesla service centre is expected to open in Ljubljana, but a more precise date is yet to be disclosed.

The Model 3 with a range of 409 kilometres is available at a little less than EUR 45,000, the Model S with 610 kilometres reaches about EUR 84,000 and the Model X with 505 kilometres comes at just under EUR 90,000, including tax.

Purchased cars can be returned within seven days, but the car must not have travelled more than 1,600 kilometres, and it has to be returned fully intact.

Charging of Tesla vehicles in Slovenia is currently possible at three fast charging stations and more than 30 standard ones.

The company plans to install additional ones soon, but they emphasized that the most convenient way of charging is at home, as the battery should last all day with average use.

Founded in 2003, Tesla Motors sold 90,891 vehicles in the second quarter of this year, posting a net profit of US$104 million, the first time it generated a profit for four consecutive quarters.

STA, 10 September 2020 - Slovenia has advanced five ranks to 62nd among 162 countries in an economic freedom report published on Thursday by the libertarian institutes Visio from Slovenia and Fraser from Canada. Slovenia remains one spot behind Croatia.

The data, presented in the 2020 annual report, looks at data from 2018, "when Slovenia made a few steps forward", Visio Institute president Tanja Porčnik said.

"The positive change have to do both with the reduction in the size of the (para)state, in particular through a decrease in state ownership in companies, and fewer rules in international trade, better protection of property rights and the strengthening of the independence of public administration," she added.

As for negative trends, Porčnik mentioned an increase in transfers and subsidies as a share of GDP and a more fragile euro.

Slovenia received 7.33 out of 10 possible points this year. It is ranked 138th when it comes to the size of the para-state, 31st in the legal system and property rights, 51st when it comes to currency stability, 47th when it comes to freedom in international trade and 75th in terms of regulations.

In the detailed analysis of the field measuring economic freedom in relation to regulations, Slovenia ranks 88th in regulations governing the credit market, 95th in labour market regulations and 55th in business regulations.

Ranked highest among all countries in the 2020 report is Hong Kong, which received 8.94 points, followed by Singapore (8.64), New Zealand (8.53) and Switzerland (8.45). Ireland is the highest ranked EU member state in 10th place (8.13 points).

The full report can be found here in PDF form