{
  "title": "IMF Executive Board Concludes 2024 Article IV Consultation with Slovenia",
  "publication": "IMF News, May 14, 2024",
  "sourceUrl": "https://www.imf.org/en/news/articles/2024/05/13/pr-24158-slovenia-imf-board-concludes-2024-art-iv-consult",
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  "summary": "The Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation with the Republic of Slovenia on Friday, May 3, 2024",
  "publishDate": "2024-05-14",
  "sections": [
    {
      "heading": "Overview",
      "content": "- The Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation with the Republic of Slovenia on Friday, May 3, 2024.\n- Slovenia’s economy recovered well from the pandemic, then faced spillovers from the war in Ukraine and severe flooding in August 2023.\n- Authorities estimated direct flood damages at almost 5 percent of GDP; the cost of upgrading infrastructure to be more climate resilient is estimated to be much higher.\n- Inflation has fallen from earlier highs as commodity price pressures eased and tighter monetary policy fed through to prices.\n- It is expected that the next Article IV consultation with the Republic of Slovenia will be held on the standard 12‑month cycle."
    },
    {
      "heading": "Executive Board Assessment",
      "content": "- Directors commended the authorities for Slovenia’s economic resilience and timely and effective policy response to shocks, including the recent devastating floods.\n- Directors underscored the need to:\n  - Maintain prudent fiscal and macroprudential policies.\n  - Advance structural reforms to boost growth, accelerate income convergence with the EU, and strengthen climate resilience.\n- Fiscal policy views:\n  - Stronger medium‑term fiscal consolidation and fiscal reforms are important to rebuild fiscal space and underpin debt sustainability, especially given the expected increase in age‑related spending.\n  - Directors called for expenditure‑driven consolidation, accompanied by pension, health, tax, and public sector wage reforms.\n  - Eliminating remaining pandemic and energy‑related measures would support consolidation.\n  - Directors welcomed transparent handling of flood‑related spending and underscored the need for careful prioritization and phasing.\n  - Directors recognized potential negative effects of the new bank asset tax and agreed that it should be allowed to lapse after the allotted 5‑year period.\n  - With expected increases in public investment, Directors recommended enhancing the efficiency of capital spending by implementing recommendations from the recent Public Investment Management Assessment.\n- Financial sector views:\n  - The banking system appears sound, with strong profitability, capital, and liquidity, and with low non‑performing loans.\n  - High interest rates have increased repayment and rollover risks, warranting continued close monitoring of bank assets.\n  - The Bank of Slovenia’s macroprudential stance is appropriate; the planned increase in the neutral countercyclical capital buffer will help strengthen the banking system’s capacity to respond to adverse shocks.\n  - Directors welcomed progress on strengthening the AML/CFT framework.\n- Structural and climate policy views:\n  - Directors called for structural reforms to boost productivity growth, supported by the EU‑backed National Recovery and Resilience Plan.\n  - Key reforms highlighted: address skill mismatches, improve regulatory quality, deepen capital markets, reduce the tax wedge on labor, invest in the digital and green transitions, and prepare a national climate adaptation strategy."
    },
    {
      "heading": "Economic Outlook and Risks",
      "content": "- Growth and inflation projections:\n  - Growth is expected to increase to about 2 percent in 2024, led by domestic demand, including higher flood‑related investment, and higher consumption as real wages recover.\n  - Inflation is projected to decline to below 3 percent by end‑year and to 2 percent in 2025.\n- Risk environment:\n  - External risks: intensification of regional conflicts, renewed commodity price volatility, and lower external demand.\n  - Supply chain disruptions: pose risks but may create nearshoring opportunities for Slovenia.\n  - Labor shortages and broader capacity constraints: could affect post‑flood reconstruction or undermine disinflation.\n  - Severe weather events remain a risk."
    },
    {
      "heading": "Selected Economic Indicators, 2020–25 (annual percentage change unless noted)",
      "content": "- Real GDP: 2020: -4.2; 2021: 8.2; 2022: 2.5; 2023: 1.6; 2024: 2.0; 2025: (not shown)\n- Domestic demand (contribution to growth): 2020: -3.9; 2021: 9.2; 2022: 3.5; 2023: -1.2; 2024: 3.7; 2025: 3.0\n- Private consumption: 2020: -6.5; 2021: 10.3; 2022: 3.6; 2023: 1.3; 2024: 2.6\n- Public consumption: 2020: 4.2; 2021: 6.1; 2022: -0.5; 2023: 2.4; 2024: 5.4\n- Gross capital formation: 2020: -6.3; 2021: 13.9; 2022: 7.9; 2023: -9.8; 2024: 12.2; 2025: 5.0\n- Gross fixed capital formation: 2020: -7.2; 2021: 12.6; 2022: 9.5; 2023: 5.9; 2024: 3.1\n- Net exports (contribution to growth): 2020: -0.3; 2021: -1.0; 2022: 2.8; 2023: -1.7; 2024: (not shown)\n- Exports of goods and services: 2020: -8.5; 2021: 14.5; 2022: 7.2; 2023: -2.0; 2024: 2.9; 2025: 4.3\n- Imports of goods and services: 2020: -9.1; 2021: 17.8; 2022: 9.0; 2023: -5.1; 2024: 5.2; 2025: 5.1\n- Output gap (in percent of potential GDP): 2020: -2.2; 2021: 2.3; 2022: 1.9; 2023: 0.7; 2024: 0.2; 2025: 0.0\n- Unemployment rate (in percent, ILO definition): 2020: 4.7; 2021: 4.0; 2022: 3.8; 2023: (not shown)\n- Consumer prices (national def., period average): 2020: -0.1; 2021: 8.8; 2022: 7.4; 2023: 2.7; 2024: (not shown)\n- Core inflation (period average) 1/: 2020: 1.0; 2021: 6.8; 2022: 7.8; 2023: (not shown)\n- General government balance (percent of GDP): 2020: -7.6; 2021: -4.6; 2022: -3.0; 2023: -2.5; 2024: -2.7\n- Cyclically‑adjusted general government balance: 2020: -6.6; 2021: -5.6; 2022: -3.8; 2023: -2.8; 2024: -3.1\n- Structural primary balance 2/: 2021: -5.2; 2022: -4.4; 2023: -2.9; 2024: -1.4\n- General government gross debt (percent of GDP): 2020: 79.6; 2021: 74.4; 2022: 72.5; 2023: 69.2; 2024: 68.1; 2025: 67.4\n- Credit to the private sector: 2020: -0.6\n- Lending rates 3/: 2020: 1.8; 2021: 4.9; 2022: 5.5; 2024: …\n- Deposit rates 4/: 2020: 0.1; 2021: 0.8; 2022: 1.4; 2024: …\n- Government bond yield (10-year): 2020: 3.4\n- Current account balance (percent of GDP): 2020: 3.3; 2021: 4.5; 2022: 2.1\n- Trade balance (goods and services): 2020: -2.1; 2021: 0.3\n- Gross external debt (percent of GDP, end-period): 2020: 102.1; 2021: 97.4; 2022: 90.9; 2023: 91.8; 2024: 87.0; 2025: 83.7\n- Nominal effective exchange rate (2010=100): 2020: 106.8; 2021: 107.7; 2022: 106.7; 2023: 109.6\n- Real effective exch. rate (2010=100, CPI-based): 2020: 98.0; 2021: 97.6; 2022: 96.5; 2023: 99.4"
    },
    {
      "heading": "Memorandum items (levels)",
      "content": "- Population (millions): (not shown)\n- Nominal GDP (EUR millions): 2020: 47,045; 2021: 52,279; 2022: 57,038; 2023: 63,090; 2024: 66,900; 2025: 69,995\n- GDP per capita (EUR): 2020: 22,447; 2021: 24,789; 2022: 27,068; 2023: 29,802; 2024: 31,572; 2025: 33,023\n\n1/ Harmonized Index of Consumer Prices excluding energy and unprocessed food.\n2/ Excludes one‑offs and adjusted for calendar year shifts between receipts and expenditures of earmarked EU funds.\n3/ Floating or up‑to‑one‑year fixed rate for new loans to NFCs over €1 million. 2024 value shows an average for the first two months.\n4/ For household time deposits with maturity up to one year. 2024 value shows an average for the first two months.\n\nSource: IMF Communications Department — Press Release No. 24/158 (May 14, 2024).\n\n---\n\n\n References\n\n- Republic of Slovenia and the IMF\n- IMF Policy Advice -- A Factsheet\n- Press Releases\n- PRESS CENTER\n- http://www.IMF.org/external/np/sec/misc/qualifiers.htm\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2024/05/13/pr-24158-slovenia-imf-board-concludes-2024-art-iv-consult"
    }
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    "Published: May 14, 2024",
    "The Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation with the Republic of Slovenia on Friday, May 3, 2024.",
    "Slovenia’s economy recovered well from the pandemic, then faced spillovers from the war in Ukraine and severe flooding in August 2023.",
    "Authorities estimated direct flood damages at almost 5 percent of GDP; the cost of upgrading infrastructure to be more climate resilient is estimated to be much higher.",
    "Inflation has fallen from earlier highs as commodity price pressures eased and tighter monetary policy fed through to prices.",
    "It is expected that the next Article IV consultation with the Republic of Slovenia will be held on the standard 12‑month cycle.",
    "Directors commended the authorities for Slovenia’s economic resilience and timely and effective policy response to shocks, including the recent devastating floods.",
    "Directors underscored the need to:",
    "Fiscal policy views:",
    "Financial sector views:",
    "Structural and climate policy views:",
    "Growth and inflation projections:",
    "Risk environment:",
    "Real GDP: 2020: -4.2; 2021: 8.2; 2022: 2.5; 2023: 1.6; 2024: 2.0; 2025: (not shown)",
    "Domestic demand (contribution to growth): 2020: -3.9; 2021: 9.2; 2022: 3.5; 2023: -1.2; 2024: 3.7; 2025: 3.0",
    "Private consumption: 2020: -6.5; 2021: 10.3; 2022: 3.6; 2023: 1.3; 2024: 2.6",
    "Public consumption: 2020: 4.2; 2021: 6.1; 2022: -0.5; 2023: 2.4; 2024: 5.4",
    "Gross capital formation: 2020: -6.3; 2021: 13.9; 2022: 7.9; 2023: -9.8; 2024: 12.2; 2025: 5.0",
    "Gross fixed capital formation: 2020: -7.2; 2021: 12.6; 2022: 9.5; 2023: 5.9; 2024: 3.1",
    "Net exports (contribution to growth): 2020: -0.3; 2021: -1.0; 2022: 2.8; 2023: -1.7; 2024: (not shown)",
    "Exports of goods and services: 2020: -8.5; 2021: 14.5; 2022: 7.2; 2023: -2.0; 2024: 2.9; 2025: 4.3",
    "Imports of goods and services: 2020: -9.1; 2021: 17.8; 2022: 9.0; 2023: -5.1; 2024: 5.2; 2025: 5.1",
    "Output gap (in percent of potential GDP): 2020: -2.2; 2021: 2.3; 2022: 1.9; 2023: 0.7; 2024: 0.2; 2025: 0.0",
    "Unemployment rate (in percent, ILO definition): 2020: 4.7; 2021: 4.0; 2022: 3.8; 2023: (not shown)",
    "Consumer prices (national def., period average): 2020: -0.1; 2021: 8.8; 2022: 7.4; 2023: 2.7; 2024: (not shown)",
    "Core inflation (period average) 1/: 2020: 1.0; 2021: 6.8; 2022: 7.8; 2023: (not shown)",
    "General government balance (percent of GDP): 2020: -7.6; 2021: -4.6; 2022: -3.0; 2023: -2.5; 2024: -2.7",
    "Cyclically‑adjusted general government balance: 2020: -6.6; 2021: -5.6; 2022: -3.8; 2023: -2.8; 2024: -3.1",
    "Structural primary balance 2/: 2021: -5.2; 2022: -4.4; 2023: -2.9; 2024: -1.4",
    "General government gross debt (percent of GDP): 2020: 79.6; 2021: 74.4; 2022: 72.5; 2023: 69.2; 2024: 68.1; 2025: 67.4",
    "Credit to the private sector: 2020: -0.6",
    "Lending rates 3/: 2020: 1.8; 2021: 4.9; 2022: 5.5; 2024: …",
    "Deposit rates 4/: 2020: 0.1; 2021: 0.8; 2022: 1.4; 2024: …",
    "Government bond yield (10-year): 2020: 3.4",
    "Current account balance (percent of GDP): 2020: 3.3; 2021: 4.5; 2022: 2.1",
    "Trade balance (goods and services): 2020: -2.1; 2021: 0.3",
    "Gross external debt (percent of GDP, end-period): 2020: 102.1; 2021: 97.4; 2022: 90.9; 2023: 91.8; 2024: 87.0; 2025: 83.7",
    "Nominal effective exchange rate (2010=100): 2020: 106.8; 2021: 107.7; 2022: 106.7; 2023: 109.6",
    "Real effective exch. rate (2010=100, CPI-based): 2020: 98.0; 2021: 97.6; 2022: 96.5; 2023: 99.4",
    "Population (millions): (not shown)",
    "Nominal GDP (EUR millions): 2020: 47,045; 2021: 52,279; 2022: 57,038; 2023: 63,090; 2024: 66,900; 2025: 69,995",
    "GDP per capita (EUR): 2020: 22,447; 2021: 24,789; 2022: 27,068; 2023: 29,802; 2024: 31,572; 2025: 33,023",
    "[Republic of Slovenia and the IMF](http://www.imf.org/external/country/SVN/index.htm)",
    "[IMF Policy Advice -- A Factsheet](https://www.imf.org/en/about/factsheets/imf-surveillance)",
    "[Press Releases](https://www.imf.org/en/news/searchnews)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[http://www.IMF.org/external/np/sec/misc/qualifiers.htm](http://www.imf.org/external/np/sec/misc/qualifiers.htm)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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