Business

22 Jun 2020, 10:53 AM

STA, 21 June 2020 - Slovenia still lags behind the EU-27 average in actual individual consumption per capita and in GDP per capita, which reached 81% and 88% of the 2019 average, respectively, the EU's early figures, released by Slovenia's Statistics Office (SURS), show.

SURS released Eurostat's preliminary figures for 37 European countries, showing that actual individual consumption per capita - an indicator of material prosperity of households - ranged from 59% to 135% of the EU average.

Slovenia's actual individual consumption in 2019 was two percentage points above the country's 2018 figure.

Closest to Slovenia in actual individual consumption was Malta (80% of the EU average), and Poland and Romania (both 79%).

GDP per capita slovenia 2020.png

The differences among the 37 European countries were even bigger in GDP per capita, an indicator of economic activity, which ranged from 53% to 261% of the EU average.

GDP per capita in Slovenia has been rising, up one point in 2019 over 2018, in what was the fourth consecutive annual rise. Closes on the list to Slovenia last year were Cyprus with 89% and Spain 91%.

Luxembourg fared best in both indicators, which are expressed in purchasing power standards, and Albania worst.

Actual individual consumption and Gross domestic product per capita in purchasing power standards, volume indices, European countries (EU-27=100), 2019

Country Actual individual consumption
per capita
Gross domestic product
per capita
European union (EU-27) 100 100
Euro area (EA-19) 106 106
EU-27    
Luxembourg 135 261
Germany 123 121
Austria 118 127
Denmark 116 129
Belgium 115 117
Netherlands 114 128
Finland 113 111
Sweden 112 120
France 109 106
Italy 99 95
Ireland 97 191
Cyprus 95 89
Spain 91 91
Lithuania 90 82
Portugal 86 79
Czechia 85 92
Slovenia 81 88
Malta 80 99
Poland 79 73
Romania 79 69
Greece 77 68
Estonia 75 84
Slovakia 73 74
Latvia 71 69
Hungary 67 73
Croatia 66 65
Bulgaria 59 53
     
United Kingdom 115 105
     
EFTA Member states    
Norway 128 144
Switzerland 124 153
Iceland 119 130
Candidate countries for EU    
Turkey 68 61
Montenegro 60 50
Serbia 49 41
North Macedonia 43 38
Albania 40 31
Potential candidate country for EU    
Bosnia and Herzegovina 42 32
Source: Eurostat (http://ec.europa.eu/eurostat, 18. 6. 2020)
16 Jun 2020, 14:58 PM

STA, 16 June 2020 - Reflecting on the housing market in Ljubljana, the business daily Finance points in Tuesday's commentary to the simultaneous increase in newly available flats and the pending drop in purchasing power.

The building of apartments was sped up quite noticeably last year, with more than 988 multi-unit buildings being completed, almost double the 2018 number.

By far the largest number of new flats appeared in Ljubljana. And while people were complaining a few years ago that the focus was only on high-end housing, quite a few "normal" flats are being built in the capital now.

A problem may however appear on the demand side, the paper says, pointing to bleak economic forecasts for this year and the fact that few people can afford to buy an apartment as it is.

The price growth of flats in Ljubljana stopped already last year. Given the simultaneous rise in supply and decrease in purchasing power - even if the Surveying and Mapping Authority says that demand still exceeds supply, prices could also fall.

"Considering all this, we might soon no longer be wondering who will buy a flat costing EUR 5 million but will buy one for EUR 150,000," Finance says in the commentary, entitled Who Will Buy a Flat for EUR 5m?

16 Jun 2020, 10:32 AM

STA, 15 June 2020 - The Competition Protection Agency has decided to extend the temporary seizure of Mercator shares from the retailer's owner, Croatian group Agrokor. The latter has still not paid a EUR 53.9 million fine issued for its failure to notify the anti-trust watchdog of the 2016 takeover of Slovenian-based bottled water company Costella.

The Slovenian anti-trust agency, on whose behalf the Financial Administration seized 70% of Mercator shares from Agrokor last December, confirmed the decision for the STA on Monday.

It said the measure was being extended to protect the fine decision in line with an option which allows the seizure to be prolonged. It would not say what steps would follow, while explaining a confiscation of shares can be extended only once for a maximum of six months.

The seizure has been upheld by the Ljubljana District Court while an Agrokor challenge has recently been rejected by the Constitutional Court.

The move means it remains impossible to transfer a majority stake in Mercator from insolvent Agrokor to its successor Fortenova.

The transfer was already expected at the end of last year, but a failure to obtain consent from Mercator's creditor banks complicated the affair. Slovenia's biggest grocer, which was sold to Agrokor in 2014, owes over EUR 100 million to creditors and the loans will need to be rescheduled in mid-2021. Mercator's management expects no problems here.

Responding to the anti-trust agency's latest decision, Fortenova said today that it had not come as a surprise and expressed expectation that Mercator shares would be transferred onto Fortenova by the end of the year. It also said that it would continue fighting against the seizure with any mean available.

Meanwhile, Fortenova head Fabris Peruško has recently said that legal proceedings are still under way with respect to the seizure. He did not provide details, while mentioning the paying of the fine as one option as he expressed his expectation that conditions would soon be met for the transfer of Mercator to Fortenova.

Along with the lifting of the anti-trust watchdog's measure and the consent of all 56 Mercator creditors, a nod from the European Commission is also needed for the transfer. Fortenova expects the EU's greenlight in a few months.

15 Jun 2020, 12:17 PM

STA, 15 June 2020 - The average net pay in Slovenia in April stood at EUR 1,266, which was 10.5% more than in March nominally and 11.5% more in real terms, the Statistics Office reported on Monday, noting that the increase was related to measures mitigating the impact of the Covid-19 epidemic.

The Statistics Office said the increase was mostly related to the payment of crisis bonuses in line with the relevant legislation and collective bargaining agreements.

The average gross pay was up by 10.2% nominally and by 11.2% in real terms compared to March to EUR 1,937.

In the public sector, the average gross pay for April was up by 10.9% on the monthly basis, while in the private sector, the increase was smaller, at 8.6%.

Sector-wise, the average gross pay was the highest in healthcare and social security (EUR 2,714), where the monthly increase was also the highest, at 27.9%.

Also increasing by more than a fifth was the average gross pay in the hospitality sector (24.2%).

11 Jun 2020, 10:21 AM

STA, 10 June 2020 - The Organisation for Economic Co-operation and Development (OECD) says in its latest forecast for Slovenia that the country's gross domestic product (GDP) is expected to shrink this year by 7.8% this year, or as much as 9.1% in the event of a second wave of coronavirus infections.

For 2021, the OECD expects that Slovenia's economy will grow by 4.5%, or by 1.5% in the event of another Covid-19 outbreak, the organisation says in the forecast published on Wednesday.

It says that the Covid-19 epidemic in Slovenia has manifested itself in a "historically large drop in consumer confidence and business sentiment, which only recently have begun to recover."

The OECD notes that the tourism sector is the worst affected, and also hard hit is road transport, although activity of the latter has started to recover.

For this and other related reasons, the OECD estimates that the output loss in the first half of 2020 will be at 13% year-on-year.

The unemployment rate is expected to reach 6.4% this year, or 6.9% in the adverse scenario, and next year to stand at 5.4% or 8.1%, respectively.

"To avoid higher long-term unemployment, it is important that active labour market policies focus on the hard-to-employ job-seekers by providing adequate job search support and skills upgrading," the report for Slovenia says.

Measured with the harmonised index of consumer prices, the inflation rate for this year is expected to stand at 1% under both scenarios, and at 2% or 1.7%, respectively, next year.

The OECD says that the Slovenian government has adopted a number of fiscal measures amounting to almost 4.5% of the country's GDP, but notes that additional measures should be taken to secure long-term sustainability of the economy.

In addition to the prevention of long-term unemployment, the measures include avoiding a "further increase in the already relatively high share of state-owned enterprises, which are present across all sectors."

As for a potential second wave, the OECD says that, a more selective approach to economic relief and support should be applied to allow more businesses to remain open and this should be combined with protection of vulnerable groups.

The report also touches on the Slovenian healthcare system, saying that while its efficiency compares favourably with peers, structural problems in the sector raise concerns about inefficiencies in cost, quality and safety.

The OECD notes "the low and uneven density of GPs" and "the relatively low ratio of intensive care beds to population", which may raise capacity concerns if the pandemic comes back in a more virulent form.

You can explore the OECD data here

10 Jun 2020, 11:13 AM

STA, 9 June 2020 - Slovenia's exports dropped by 28.8% to EUR 2.01 billion in April compared to April 2019, the sharpest contraction since 2008, while imports plummeted by 41.2% to EUR 1.86 billion, the Statistics Office said on Tuesday. The trend was driven by a decline in car trade, which shrank by about three-quarters compared to last April.

Road vehicles are the third most traded group of products, preceded only by medical and pharmaceutical products, and electric machines and devices.

The surplus in external trade in goods reached EUR 149.3 million, which is the highest surplus in the last ten years, and the export/import ratio was at 108%.

Exports to EU countries amounted to EUR 1.24 billion, which is down 41.4% over April 2019, and imports to the EU topped EUR 1.18 billion, which is a 45.4% drop compared to last April.

Trade with all main foreign trade partners from the EU decreased, most notably with Italy and Germany. But the latter remains Slovenia's most important trade partner.

Exports to non-EU countries were up 9.3% to EUR 766.5 million, while imports from them were down 32.1% to EUR 680.4 million.

The year-on-year growth of exports to this group of countries was the result of higher exports to Switzerland, which thus became Slovenia's second most important trade partner.

In the first four months of 2020, exports decreased by 2.6% year on year to EUR 10.79 billion and imports by 9.4% to EUR 10.21 billion. External trade surplus in the January-April period topped EUR 585.8 million and the export/import ratio was 105.7%.

Employment outlook for Q3 worst since 2013

STA, 9 June 2020 - Employment company Manpower Group has presented a grim employment outlook for the third quarter of the year. In the wake of the coronavirus epidemic in Slovenia, the outlook presented on Tuesday is the worst since 2013. The share of employers planning layoffs surpasses those planning to hire by seven percentage points.

The survey showed that 18% of employers plan to lay off people between July and the end September, while 11% intend to expand their teams.

Seasonably adjusted, the gap between those planning to fire and those intending to hire amounts one percentage point.

Meanwhile, 64% do not plan to make changes to their workforce, Manpower data suggest.

The net hiring outlook for the next quarter is 5 percentage points lower than for this quarter, and 23 percentage points lower than for the same period last year.

A drop in hiring is expected by employers in five out of the seven sectors included in the survey, with the prospects being the worst in hospitality. Here, the hiring gap is as high as 13 percentage points.

The only two segments with positive hiring prospects are the sector of financial and business services and what is classified by Manpower as other production sectors.

In terms of company size, prospects are poorest among medium-sized companies, where net employment outlook is at -14%.

Employment outlook has deteriorated for all regions, with central Slovenia and the southeast faring worst. In central Slovenia the hiring gap reached 5 percentage points, while in the southeast it dropped to 1 percentage point.

The global survey included 388 Slovenian companies among a total of 34,600 companies in 44 countries.

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

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