IMF Staff Country Reports

This Article IV Consultation highlights Slovenia’s need for continued structural reforms to ensure long-term prosperity, along with strengthening the economy’s resilience to shocks. Effective implementation of recently enacted reforms to vocational training, apprenticeship, and adult education would help address skill shortages, support employment of younger and older people, and boost productivity growth. Macro-financial legacy issues remain on bank and corporate balance sheets, including small and medium enterprises’ nonperforming loans. Structural challenges persist, with low productivity growth, skill shortages, a high tax wedge, a heavy regulatory system, and extensive presence of state-owned enterprises. Policies should focus on fiscal and structural reforms to rebuild fiscal buffers and increase productivity. Slovenia’s external position in 2018 is assessed as substantially stronger than suggested by fundamentals and desirable policies; however, the current account is expected to revert to its norm in the medium term. Continued structural reforms are key to ensure long-term prosperity while strengthening the economy’s resilience to shocks. Effective implementation of the recently enacted reforms to vocational training, apprenticeship, and adult education would help address skill shortages, support employment of younger and older people, and boost productivity growth.