Press release after the Meeting of the Governing Board of the Bank of Slovenia on 29 April 2013
1) The Governing Board of the Bank of Slovenia discussed current supervisory matters.
2) The Governing Board of the Bank of Slovenia discussed current economic and financial developments, and approved the release of the Economic and Financial Developments document for April 2013 and the Report on Slovenia’s International economic relations (External Statistics) for February 2013.
At the beginning of the year, the economic developments in Slovenia are more favourable than in the last quarter of the previous year. Particularly, the activity in export activities has risen owing to the quite successful reorientation towards strengthened demand from countries outside the euro area. Therefore, export remains the main factor in economic activity keeping in line with Bank of Slovenia’s April projections of macroeconomic developments. The current account surplus is increasing, facilitating the reduction in external debt. The trend reduction in unit labour costs is improving Slovenia’s costs competitiveness.
Despite the improvement in economic developments at the beginning of the year, the short-term outlook still remains adverse and uncertain. Registered unemployment has exceeded 13%, and the year-on-year reduction in the number of employees achieved almost 3%. The continuation of the adverse situation in the international environment and weak domestic demand does not indicate any possibility of a significant improvement in the economic situation this year. The high level of economic uncertainty is also reflected in the economic sentiment indicator which at the beginning of the second quarter fell once again mostly due to lower estimated domestic and foreign demand. The share of companies facing funding restrictions is at an all-time high according to survey indicators.
Macroeconomic indicators indicate a gradual levelling of imbalances incurred prior to the crisis. In the past year, Slovenia has adopted quite a few measures for fiscal consolidation, also adopting the pension reform and labour market reform in the past few months. Legislation related to the financial operations of companies and bankruptcy proceedings is currently under advisement. Activities have also been started to implement the Measures of the Republic of Slovenia to Strengthen the Stability of Banks Act, with accelerated efforts to establish the Bank Assets Management Company and classification of certain categories of claims for transfer to this company. Nevertheless, the rapid adoption of a credible programme of further measures for sustainable fiscal consolidation and reinstitution of undisturbed access to financing on global markets that will contribute to the gradual improvement of the economic situation, is vital. It is most important that these measures are clear, targeted and placed in an appropriate time frame. Fiscal policy potentials for encouraging growth are limited in the current situation, however the application of measures with minimum adverse effects to economic growth and available household income would make sense. According to forecasts, the Government of the Republic of Slovenia will present additional measures within the Stability Programme on 9 May 2013.
3) The Governing Board of the Bank of Slovenia adopted two implementing regulations associated with the corporate restructuring project, which will be published in the Official Gazette of the Republic of Slovenia:
- Regulation amending the Regulation on Risk Management and Implementation of the Internal Capital Adequacy Assessment Process for Banks and Savings Banks, and
- Regulation amending the regulation on the reporting of individual facts and circumstances of banks and savings banks